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BizReport : Internet : August 30, 2019

Nanny-cams to virtual assistants: How IoT brands can protect customer privacy

From Siri and Alexa to Nest home hubs and even puppy and nanny cams, there are a plethora of electronic devices collecting customer data that can be used either by White Hats or Black Hats. According to reports most (65%) of consumers are concerned about how these devices collect data and 55% don't trust businesses to protect their privacy. Here's how companies can ensure their IoT devices are safe - and trusted - by consumers.

by Kristina Knight

Kristina: From virtual assistants like Siri and Alexa to wi-fi enabled security cameras, more Americans are adding smart devices to their homes. What kinds of data can these devices collect on behalf of their manufacturers/businesses?

Pat Pickren, VP of Product, LocatorX: Smart devices can collect all kinds of data. For example, after initiating a smart speaker (i.e., Amazon echo or Google home) with an audio command, such as "Alexa" or "OK Google", a recording of what you say is sent to the service provider's cloud servers for quality assurance to improve future interactions. Many other smart-home devices such as lighting or locks track information such as location, time of use, duration of use, status of device (on/off, locked/unlocked, etc.). Video devices such as security cameras have options to send backup of the video to the provider's cloud or another location of the user's choosing.

Kristina: Are there any dangers inherent in this type of data collection?

Pat: While the intention of reputable organizations is to make their solutions more useful and relevant through data collection, data that is captured and tracked could be unintentionally exposed to bad actors. It's important for consumers to understand upfront what data is being collected, for what purposes, and how it is protected.

Kristina: What about hacking - do brands/manufacturers need to worry about the possibility of hackers getting into customer devices?

Pat: With any type of digital technology, bad actors are looking for opportunities to take advantage of unprepared consumers or even organizations. There is a greater likelihood of customer data being exposed rather than hackers taking control of a customer device. For example, a smart-home device manufacturer fell victim to a data breach due to the lax security measures on a database that contained customer information including product usage. The breach exposed 2 billion records including email address, username, and geolocation of device among other data items.

Kristina: What kind of damage could brands face if their devices were hacked?

Pat: The cost of a data breach can be significant to a brand. For example, a recent study from IBM found that each lost record costs $148. And because data breaches affect hundreds of thousands of records, the cost alone can quickly add up to millions of dollars. In addition to financial costs, there are significant intangible costs such as loss of consumer trust and diminished brand reputation.

Kristina: What about the benefits, for business, of these kinds of devices?

Pat: Smart devices are not limited to consumers' homes as businesses can benefit from similar types of automation and data insight of their assets. Businesses were some of the first to adopt smart applications such as motion-detection lighting and the automation of security systems with badging technology. With the prevalence of smartphones and advances in connectivity such as Near Field Communication (NFC) and Bluetooth Low Energy (BLE) chips, businesses can track their products in real time from the warehouse to the store and engage with consumers in the physical and digital space.

Kristina: How can businesses ensure they're keeping customer privacy at the forefront while still using this type of data?

Pat: Privacy is no longer an afterthought. New regulations such as GDPR and CCPA are empowering consumers when it comes to the acknowledgement and access of their data. Businesses can begin with the end in mind as they design their solutions by considering privacy from the ground up. There are a number of best practices and privacy frameworks that businesses can adopt. As the regulatory landscape changes to enforce greater data protection, and with consumers demanding more responsible data practices, it's smart business to protect data from IoT devices.

Tags: advertising data, consumer data, customer data, data privacy, internet trends, IoT devices, IoT trends, LocatorX, VA trends, virtual assistants

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