Data privacy best practices for consumer apps in 2023

Data privacy best practices for consumer apps in 2023
Share on
Key Takeaways
  • Apple's big data privacy moves in recent years has caused controversy and pressured for change in the consumer app space.
  • Mobile app publishers have an opportunity to follow suit and differentiate themselves and build trust based on their data privacy commitment.
  • Making efforts to clearly communicate and bolster data protection are massively important and beneficial to all in a data privacy-first world.

In recent years, data privacy has become an increasingly important issue for consumers, businesses, and regulators alike. The rapid expansion of digital advertising and consumer apps has led to a significant increase in the amount of personal data being collected, analyzed, and shared. In response, many big tech companies have implemented changes to their data privacy policies, and none more so than Apple

With Apple’s pioneering data privacy moves and the prospect of new federal data protection requirements, mobile app publishers dealing with sensitive information need to revisit their data privacy strategies. They need to ensure they’re clearly communicating policies and protecting partners and consumers at all costs.

The initial impact of Apple’s data privacy changes on mobile app publishers

Apple has been a vocal proponent of data privacy for some time, and in the past few years has implemented a series of changes to its operating system to protect users' personal information. In September 2020, Apple released iOS 14, which included new privacy features that allow users to better control their data. 

One of the most significant changes is the App Tracking Transparency (ATT) framework. This requires app developers to obtain explicit user consent before tracking their activity across other apps and websites for advertising purposes. If a user opts out, the app can’t track them, and the developer must respect this decision. 

Apple also introduced a new privacy information section in the App Store, which requires developers to provide detailed information about their app's data collection practices. This includes information about the types of data collected, the third parties with which the data is shared, and the purpose of the data collection. Information is intended to help users make more informed decisions about which apps they choose to use.

The tech giant’s moves have had major impacts on consumer apps, particularly on companies that rely on tracking user activity for targeted advertising. 

Apple’s privacy changes led to a decrease in advertising revenue – it cut the average mobile advertiser’s ROI by nearly 40%. – Forbes, 2022

Industries like fintech and home security, which rely on user data analysis to provide personalized products and services, have subsequently faced specific challenges to their businesses. But it’s not all bad news. 

How stronger data privacy practices benefit both consumers and app publishers 

Apple’s data privacy updates and the pressure they’ve put on the consumer app industry to do better with user data have benefited consumers. 

Beyond data privacy and consumer trust being intrinsically intertwined, users are becoming increasingly interested in how companies are collecting, storing, and sharing their personal data.  

The introduction of the privacy information section in the App Store, for one, has made it easier for users to understand what data is being collected and how it is being used. This has led to increased awareness about data privacy and has prompted many users to take a more active role in controlling their personal information.

As for consumer app publishers, an industry-wide push to beef up data privacy policies has created opportunities to differentiate themselves and build consumer trust based on their commitment.

Some app publishers have responded by offering more transparent data collection practices, such as allowing users to opt-in to data sharing or providing clear information about how data is being used. Others have focused on providing more secure data storage and encryption to protect user data.

Overall, the changes have forced consumer apps across fintech, home security, consumer savings, and other categories to re-evaluate their data privacy practices and make changes to ensure they are in compliance with the new regulations.

Data privacy best practices for app publishers in 2023

How consumer app businesses handle data privacy and how they communicate their data security practices has the ability to impact a brand’s identity and its place in the marketplace.

And, as digital data sharing continues to play a larger role in consumer spending habits, we can expect to see data privacy play a bigger role when customers are evaluating and comparing competing brands or products.

Clearly communicating data privacy policies to consumers

Companies dealing with personal data need to communicate their policies clearly and effectively to ensure they’re acquiring lawful consent and respecting global privacy laws, but how they communicate these policies can nurture or hinder their relationship with prospective customers.

1. Find the clearest, most direct ways of communicating exactly what data you collect, how you’re using that data, and who you’re sharing that data with.

With the privacy policy acting as a contract between a provider and a user, clearly communicating how data is managed is the first step in building trust with a new or existing prospect. Providers also need to take a proactive, ongoing approach to communicating changes/updates well before they’re implemented.

2. When building a data security communications plan, understand the nuances and value of opt-in consent practices.

These require organizations to obtain explicit consent from the user before collecting and processing any personal data. Unlike opt-out consent, which does not require an organization to obtain explicit user consent before collecting and processing personal data, opt-in offers the opportunity to accept or reject a privacy policy and avoids misleading practices for obtaining consent (pre-checked boxes on a form, cookie walls, etc.)

For example, at Zendrive, we work with consumer apps to provide data-driven insurance offerings based on a driver's driving behavior. We require app publishers to follow an opt-in approach when offering test drive experiences to their users.

Bolstering data privacy and security

With a clear and transparent communications strategy in place, app publishers can move towards creating added trust and value via their actions. Whether data security is handled in-house or via an external partner, it’s important to consider additional opportunities for modernizing data management practices and bolstering data security.

1. Consider how Personally Identifiable Information (PII) impacts your operations.

Choosing not to collect PII, which is any data that could potentially identify a specific individual, offers brands the opportunity to take a consumer-friendly, privacy-centric approach to data management.

Zendrive utilizes an internal driver ID instead of any PII. Our internal driver ID is not tied to any user-level data outside driving behavior, meaning we can perform comprehensive driver safety analyses without ever putting any identifying information at risk.

2. Understand how edge computing can help reduce your exposure to network-related security risks.

With edge computing, data management companies can keep data closer to its original source and away from the company’s centralized data-processing hub, which also helps mitigate the latency and bandwidth constraints of today’s internet. With sensitive data at the farthest “edge” of a company’s network, companies can increase the protection and privacy of their data while improving their overall efficiency. 

For Zendrive, this has meant using edge-based computing for our software development kit (SDK), and running risk assessment algorithms and AI models locally on a user’s smartphone, which decentralizes data processing and removes the need for constant network connectivity.

Moving forward in a data privacy-centric world

As we continue to move towards an increasingly digital future, companies that process consumer data have the opportunity to build trust and create added value that sets them apart from competitors in the same space.

Whether it’s rethinking how you communicate data privacy policies and pursue consent, or reassessing what additional steps you can take to improve the protection of data, every organization has the opportunity to create added value and make their brand synonymous with trust and safety.

Read more about how Zendrive handles data and the top advantages for mobile app publishers that partner with us. Contact us directly below to learn more about our Insurance Qualification Lens (IQL) program.

Data privacy best practices for consumer apps in 2023
Meara Hamidiani
Associate Director - Content Marketing
Get notified of new articles
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.