By Stephanie Braun, Director of Auto Product Management at Esurance
Companies have collected data on their customers for decades. It allows them to offer more tailored services and products, and provide more relevant messaging. The reason data collection has gotten so much press lately is because it’s reached unprecedented levels. Already, we create 2.5 quintillion bytes of data each day. In fact, 90 percent of the world’s entire data reservoir was only created in the last two years. Automated technology like the self-driving car is expected to accelerate the quantity and quality of data that’s collected — perhaps exponentially.
Autonomous vehicles rely on real-time data collection to avoid accidents on the road and ensure engine performance. The suite of sensors and software in new cars, along with artificial intelligence, can collect and mine real-time data at prodigious speeds, creating new services and channels of revenue. Your driving behaviors — where you go and when, what you see on your daily route, the music you listen to, the coffee you stop to get — all have monetary value.
Data is a hot commodity, and companies are willing to pay top dollar for it. By some estimates, the data collected by self-driving cars could become more valuable than the cars themselves.
Though concerns over data usage are warranted, the value of raw data could also have an unexpected benefit for users. If they choose to, they could sell their personal information to manufacturers and advertisers to subsidize the cost of the car itself. In fact, it’s already happening.
Earning Discounts by Sharing Data
An Israeli startup called Otonomo, which has offices in Redwood City, CA, organizes and packages data for carmakers and navigates regulatory mazes in different countries. Basically, they’re data brokers. They’ve developed technology that cleans and standardizes data and makes it anonymous. The startup also has a consent management app which lets drivers choose the information they want to share and the companies with which they share it. Drivers can withhold their data, but those who agree to share it earn discounts and rewards.
Safe drivers in particular can benefit from this technology. After all, if you’re a safe driver, you might want your insurance company to know that. Luckily, many insurance carriers already offer their customers the opportunity to earn discounts in exchange for driving data. These programs are typically aimed at promoting safer driving and are optional for customers to participate in. If you opt in, you can track your driving and will usually earn a discount just for signing up. Savvy consumers already have the option to share their data for money-saving benefits.
Data-Reading Sensors Help You Save Money
We already rely on car data to monitor mileage, fuel levels and tire pressure. With increased connectivity, car data could help you save money, too. For instance, data-reading hardware and apps can detect mechanical issues ahead of time. So, instead of having to take your car into the shop for every mechanical hiccup, one over-the-air update from the manufacturer could nip the problem in the bud. By addressing small problems before they become big ones, you could potentially save even more.
Are Consumers Willing to Share Their Data for Rewards?
In the early era of the internet, there seemed to be a seemingly harmless value exchange when sharing data — give companies your information and receive a more tailored experience in return. Today, consumers have come to expect a personalized experience across a wide spectrum of channels. The very engine that collects data to make these personalized experiences possible is what consumers are most apprehensive about now.
While hesitation is understandable, most adults in the U.S. are actually willing to fork over their personal data. According to a survey from YouGov, a marketing research firm, only 31 percent of the 1,145 respondents wouldn’t share their personal data for any benefits. The survey found that 43 percent would be willing to share their personal data for “promotions, discounts and/or deals based on [their] preferences or account history.”In short, many consumers are willing to share their data, but they want control over the data they share.
Lawmakers have been working to give consumers more control for a while, and the European Union’s General Data Protection Regulation (GDPR) is the vanguard. Some companies who do business both stateside and in Europe are already extending these protections to their U.S. customers to ensure that they’re safeguarding their sensitive data. It would seem that businesses and consumers alike understand the absolute importance of protecting data to ensure that the exchange is always mutually beneficial.
If companies can prioritize safety and ensure security, consumers will likely become increasingly willing to share their valuable data in exchange for value in return.
Learn more about car insurance policies by visiting Esurance.com.
This article was provided by our partners at moneytips.com.
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