In the digital ecosystem, the freedom to browse, buy and engage online comes at a cost: a lack of control over one’s data privacy. That realization is causing widespread anxiety and distrust among U.S. consumers, according to a global report and survey by The Conference Board.

How deep is the skepticism? Consider that a staggering 63 percent of U.S. consumers feel uncomfortable having their personal data collected. Less than 30 percent believe companies’ use of their data has improved their life. And a majority is willing to give up data-based benefits of personalized messages, offers and experiences in exchange for privacy.

How companies use and keep digital consumer data has become a hot-button topic in both the corporate and political spheres. Further, the pandemic-led surge in digital marketing and communication has placed renewed emphasis on data collection and information sharing practices.

Given these factors, U.S. consumer cynicism is not surprising.

Conducted in collaboration with Nielsen in 64 countries, The Conference Board research showed that U.S. consumers are even more anxious and cynical about corporate data practices than peer consumers in other nations. Secondly, U.S. consumers have begun to alter their digital behaviors. For example, almost one-third of U.S. consumers have adjusted their privacy settings in response to disliked practices, and one-fifth have used a company less or abandoned it altogether.

Mitigating Risk and Creating New Opportunities by Building Trust

Based on these findings, companies that proactively evolve their data policies to meet the needs of consumers could mitigate risk and create new business opportunities. While changing data practices is difficult and may require new investment for businesses, it may also be prescient: Recently enacted laws such as the California Consumer Privacy Act could indicate that future federal and additional state regulation is coming.

The objective is not to throw out the baby with the bath water. Rather, the goal is to find a way to make data work for both consumers and companies. After all, data collection, analytics, and usage benefit consumers and companies alike. A better consumer experience can generate better financial value for companies and thus ultimately contribute to the economy’s GDP. Inevitably, companies that innovate prior to government regulation will generate consumer goodwill. Enhancing customer experience by changing some data practices and giving consumers more control over how their personal information is shared could ultimately build long-term trust—a new type of competitive advantage in the digital economy.

Finding a Balance Between Customer Needs and Your Own

• Perfect your data infrastructure to enhance consumer trust.

Providing the right infrastructure to store customers’ data is absolutely essential in order to establish trust. Making this critical step a top priority, including communicating about it to customers, not only addresses U.S. consumers’ primary concern – data breaches – but also hedges against large, costly cyber risks.

• Incorporate data practices that focus on transparency, user access and control.

Given the public’s sensitivity to companies’ use of their personal data, transparent data practices are crucial to gaining consumers’ trust. Therefore, companies should provide customers with a choice regarding what kinds of personal data are collected and how they are used, shared, and stored. Moreover, companies should evaluate how data collection and storage can be minimized and what additional measures can be implemented to secure data privacy, such as anonymizing, approximating consumers’ profiles, or removing data storage altogether.

• Create a clear distinction between first-party data use and third-party sharing.

Many consumers may not mind sharing their data with companies they do business with (first-party data use). On the other hand, third-party data-sharing is U.S. consumers’ second-biggest data-related concern. As a rule of thumb, in order to build customer trust, data should not be shared with third parties without users’ explicit consent.

• Develop awareness campaigns to enhance consumers’ appreciation for personalization.

More than half of U.S. consumers don’t value personalization as a benefit of data-sharing as much as no data tracking, but this could be an awareness issue. After all, people prefer offerings that cater to their needs and desires.

Companies may need to explicitly indicate what kind of marketing content is personalized for consumers to recognize the benefits they receive from sharing their data. Companies could also give consumers the ability to choose between personalized content and a more generic approach.

• Offer free and paid options for varying levels of data-sharing.

One method for establishing stronger relationships with consumers could be to allow users to select the level of data-sharing they’re comfortable with. Users interested in accessing content and apps for free could opt into sharing their personal data, thus benefitting both the consumer and the company. Those who aren’t comfortable sharing their data can pay for anonymity. In fact, over a quarter of consumers are open to giving up complimentary content and app usage to avoid being tracked and instead pay, providing companies an additional revenue stream.

• Seek out audiences that derive value from data-sharing

Despite a dominant reluctance to share personal data for certain purposes, there are segments of U.S. consumers that are open to data-tracking in return for certain benefits. Almost one-fifth would be comfortable with third-party data-sharing for financial compensation. Companies could identify these segments and leverage their data to inform future marketing strategy and practices.

Self-Regulation Can Go a Long Way

While Congress has increasingly scrutinized tech companies, our research shows that very few U.S. consumers favor lawmakers to oversee companies’ data practices. There is some support, however, for self-regulation by companies, including by adhering to standards established by trade organizations.

Therefore, it is only fitting for companies to be proactive and make their data practices more consumer-friendly. A natural start may be to complete an internal audit of what data your business collects and for what purpose. This corporate-led initiative may please consumers more than waiting for any government-based mandates to occur.