INSUBCONTINENT EXCLUSIVE:
Dan Wu is a privacy counsel and legal engineer at Immuta
He holds a JD from Harvard University, and is a PhD candidate for Social Policy and Sociology at The Harvard Kennedy School
More posts by this contributorFive billion dollars
Often combining law and technology, these systems will become a key weapon of data-centric Third Wave startups to beat incumbents in their
lawyers and technology personnel
Agile data governance systems, in contrast, simplify both these workflows and the use of cutting-edge privacy tools, allowing resource-poor
startups both to protect their customers better and to improve their services.In fact, 47% of customers are willing to switch to startups
that protect their sensitive data better
Ultimately, they gain a strategic advantage by obtaining more data, cultivating more loyalty, and being more resilient to inevitable data
their critical weakness: data scarcity
Customers sharemore data with startups that make data collection a feature, not a burdensome part of the user experience
most privacy-protecting banks
minimize data use is to use advanced data privacy tools like differential privacy
And by injecting noise into those summaries, differential privacy createsprovable guarantees of privacy and prevents scenarios where
malicious parties can reverse-engineer sensitive data
But because differential privacy uses summaries, instead of completely masking the data, companies can still draw meaning from it and
Instead, startups can use differential privacy to share and pool data safely, helping them overcome data scarcity
The most agile data governance systems allow startups to use differential privacy without code and the large engineering teams that only
loyaltyAccording to Deloitte,80% of consumers are more loyal to companies they believe protect their data
Over 80% of data incidents are actually caused by errors from insiders, like third party vendors who mishandle sensitive data by sharing it
with inappropriate parties
Yet over 68% of companies do not have good systems to prevent these types of errors
understanding, controlling, and monitoring data at all times
With such practices, startups can prevent and correct the mishandling of sensitive data quickly.Cognoa is a good example of a Third Wave
healthcare startup adopting these three practices at a rapid pace
First, it understands where all of its sensitive health data lies by connecting all of its databases
Second, Cognoa can control all connected data sources at once from one point by using a single access-and-control layer, as opposed to
Finally, data queries are always monitored, allowing Cognoa to produce audit reports frequently and catch problems before they escalate out
at all times to prevent data incidents
Because key workflows are simplified, these same startups can maintain the speed of their data analytics by sharing data safely with the
With better and safer data sharing across functions, startups can develop the insight necessary to cultivate a loyal fan base for the
long-term.Agile data governance can help startups survive inevitable data incidentsIn 2018, Panera mistakenly shared 37 million customer
records on its website and took 8 months to respond
in point: Harvard Business Review reports that the stock prices of companies without strong data governance practices drop 150% more than
companies that do adopt strong practices
Despite this difference, only 10% of Fortune 500 companies actually employ the data transparency principle identified in the report
With a readable privacy policy, customers know how data will be used, helping customers feel comfortable about sharing their data
Surprises, BCG found, can reduce consumer spending by one-third
These tools allow startups to simplify manual processes, like responding to customer requests to control their data
Senior executives at major companies have been publicly interrogatedfor not taking data governance seriously
Some, like Facebook and Apple, are even claiming to lead with privacy
Ultimately, data privacy risks significantly rise in Third Wave industries where errors can alter access to key basic needs, such as
healthcare, housing, and transportation.While many incumbents have well-resourced legal and compliance departments, agile data governance
Agile governance means that time-consuming and error-prone workflows are streamlined so that companies serve their customers more quickly
Less than 15% of consumers say they know which companies protect their data the best
Startups can take advantage of this knowledge gap by adopting agile data governance and educate their customers about how to protect
themselves in the risky world of the Third Wave.Some incumbents may always be safe
But those in highly-regulated Third Wave industries, such as automotive, healthcare, and telecom should be worried; customers trust these
