Regulations to protect consumers

Research showed that companies would gather more personal information than they need unless policymakers set requirements for data protection. However, if regulators restricted data collection but ignored data protection, companies did not guard customers' data enough.

Data collection can be restricted:

  • Regulators could impose fines on companies whose data were leaked.
  • Policymakers could tax data collection and discourage firms from gathering optional personal information.

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How Companies Can Do Data Privacy Better

insight.kellogg.northwestern.edu

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Privacy data in the digital world

Consumers in the digital world give away a large part of their personal data. For example, we enter our age and credit card numbers, allow companies to track our behaviour, and often display our geographical location. 

However, customers are also becoming aware of the risks of their information being stolen, misused, or sold to third parties and are looking for privacy protections. A 2019 survey showed that 81 per cent of participants felt the risk of data collection outweighed the benefits.

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A user's decision to participate in an online platform activity depends partly on how many people are using it. This concept is known as "network effects."

Negative network effects often drive privacy risk. The more users, the bigger the company's database, the more attractive it becomes to attack.

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Firms that provide personalised services to users based on how other users behave puts users' personal information at risk, even if hackers don't directly gain access to the database. Hackers might get access to an algorithms' output for real users, then reverse-engineer the information to gain insight into a person's characteristics.

One strategy to combat this is to add some noise to an algorithm's output.

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  • Today, AI(Artificial Intelligence) can diagnose disease, translate languages, provide useful customer services, and drive a car for us.
  • Many companies use AI for automation, but to do that to displace human employees can backfire in the long run.

In extensive research involving fifteen hundred organizations, it is found that companies with the most significant improvements are those which join humans and machines to work in sync.

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How Humans and AI Are Working Together in 1,500 Companies

hbr.org

Popular cryptocurrencies like Bitcoin have caught the imagination of the world, even as they remain highly volatile.

Many think of these emerging technologies like crypto coins and Blockchain as the ultimate solution to end the corporatization of the internet, along with being the means to end government intervention on liberty, currency and privacy.

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What is decentralized finance? An expert on bitcoins and blockchains explains the risks and rewards of DeFi

theconversation.com

Companies are leveraging data and artificial intelligence to create scalable solutions — but they’re also scaling their reputational, regulatory, and legal risks. 

  • Los Angeles is suing IBM for allegedly misappropriating data it collected with its ubiquitous weather app.
  • Optum is being investigated by regulators for creating an algorithm that allegedly recommended that doctors and nurses pay more attention to white patients than to sicker black patients.
  • Goldman Sachs is being investigated by regulators for using an AI algorithm that allegedly discriminated against women by granting larger credit limits to men than women on their Apple cards.
  • Facebook infamously granted Cambridge Analytica, a political firm, access to the personal data of more than 50 million users.

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A Practical Guide to Building Ethical AI

hbr.org