Data Privacy Importance and Investments Increase

Technology has become the foundation for energy company operations. As they collect more customer information, these firms need to take steps to protect it. Consequently, their spending on data privacy solutions is on the rise.

There is no doubt that nowadays businesses rely on information to function.  The collective sum of the world’s data will grow from 59 zettabytes (1 Zbyte = 1 trillion gigabtyes) in 2020 to 188ZB in 2024, a Compounded Annual Growth Rate (CAGR) of 26%, according to International Data Corp. (IDC).

Much of this information centers on customer and energy company interactions. How the data is used has become an increasingly controversial issue. Typically, corporations monetized data, used it to improve their own marketing programs or sell the information to third parties.

Digital Ethics Grows in Importance

As a result, questions revolving around who owns the information and appropriate uses of it have arisen. A new term, digital ethics, has emerged to describe the conundrum. Gartner defines it as the systems of values and moral principles for the conduct of electronic interactions among people, organizations, and things.

Because of the controversy, the area also garnered attention from governments, who have passed legislation outlining proper and improper use of such data. The European Union’s General Data Protection Regulation (GDRP) aimed to enhance individuals' control and rights over their personal data and to simplify the regulatory environment for international businesses. California’s Consumer Privacy Act has a similar intention.

More regulations are expected.  By the end of 2023, more than 80% of companies worldwide will need to adhere to at least one privacy data protection mandate, according to Gartner.

Companies Ante Up to Comply with Regulations

Therefore, utilities need to be proactive in addressing this complex issue. Many enterprises are investing in new solutions to protect individual information. In 2024, worldwide privacy-driven spending on new data protection and compliance technology will exceed $15 billion, according to Gartner.

What are these tools? Differential privacy systems share datasets while withholding or distorting certain information to protect individuals’ identity. Federated machine learning uses knowledge contained in local nodes, such as smartphones softbots, (semi)autonomous vehicles and IoT edge devices, without exchanging actual data samples, enabling personalized experiences without compromising privacy.

Energy companies rely on technology to gain a better picture of their customers. As they collect more personal data, they need to put checks in place to ensure that the information is used appropriately. Consequently, data privacy has become an important consideration for busy management teams.