How To Prepare For Key Trends In Data Collaboration

Sadegh Riazi is the cofounder and CEO of Pyte.

“Data is the new oil” is now a common refrain among business and tech leaders. While it is in danger of being overused, there is still truth behind it. Data, not products or software, is the most valuable asset that many companies have to offer.

As data grows in value, we must learn to navigate the challenges and opportunities of a new landscape defined by both stricter privacy regulations and a greater need for data collaboration. Leaders often think there is an inherent tradeoff between using data and protecting it, but this is no longer true. New privacy-enhancing technologies (also known as PETs) exist that make it possible to protect your company’s data, collaborate with untrusted parties and accomplish common goals, all without disclosing or compromising sensitive information.

What Is The Future Of Data Collaboration?

There are many scenarios in which two or more companies choose to work together toward a shared objective, such as banks joining forces to fight fraud and money laundering, clinical healthcare institutions collaborating on clinical trials or advertisers partnering to launch targeted ad campaigns. All of these situations require using data from two or more sites, raising the question: How can all parties successfully collaborate without disclosing unnecessary data to each other?

Some solutions use data clean rooms, where all partners share their data in a centralized space and then collaborate using the functions that are provided by that environment. This approach has drawbacks because it requires significant data migration and trust in a third-party provider. New technologies are emerging that simultaneously maximize data security and collaborative capabilities.

I believe these two major trends will shape data collaboration in the near future, and it’s critical to start preparing for them now.

1. Privacy is increasingly important to consumers and companies.

Data privacy is a hot-button issue around the world. According to data from the UN, 71% of countries already have legislation in place to protect consumer data, and an additional 9% have drafted legislation. Consumers are becoming more protective of their personal information (PII), while companies are more sensitive about the value of their intellectual property (IP).

In a 2021 KPMG survey, 86% of the general population surveyed said data privacy is a growing concern for them, and 76% said they want companies to be more transparent about how their personal data is used. In the same survey, 70% of business leaders reported that their company had increased collection of consumer personal data in the previous year, and 62% said they should do more to strengthen data protection measures.

2. Data collaboration is growing in importance.

While data privacy concerns and regulations are ramping up, so is the need for data collaboration. Business operations are becoming far more data-driven, and a company’s competitive advantage and quality of service can directly depend on how much data it has. Collaborating with external partners can be mutually beneficial, but it requires a delicate balance to meet both privacy and business needs.

For example, a company in the ad tech ecosystem that is connected to more companies is likely to have a higher chance of success in its campaigns and services—but it is also cautious about sharing data that violates privacy regulations, user preferences or company IP.

Preparing For Data Collaboration Trends

I recommend taking the following steps to get ready for the next chapter in data collaboration.

1. Educate yourself and your team.

Get familiar with the various privacy-enhancing technologies available in the market, including differential privacy frameworks, data masking, secure multiparty computation (SMPC) and secure enclaves. Research different offerings to understand their strengths, weaknesses and tradeoffs. Recognize that these technologies are complex and relatively new, so you need to stay updated on ongoing developments.

2. Align your business problems with tech solutions.

Evaluate and map your unique business challenges to different tools to determine which is the right fit for your business. Which specific data sharing problems do you want to solve? What exactly do you want to mask? What is acceptable to reveal to a partner? What are your constraints?

3. Conduct a vendor search and onboarding.

After you identify and map your business problems, start a standard vendor search. Which vendor offers a solution that matches your company’s needs? Once you’ve selected the right technology, focus on the onboarding and implementation process. Ensure that the system is robust and can seamlessly integrate into your existing infrastructure. And acknowledge that you may encounter some initial friction, but this is part of embarking on any major change.

I believe we are reaching an inflection point with privacy-enhancing technologies (PETs), and in the next few years, they will become seamlessly integrated into business operations, much like end-to-end encryption in today’s communications. Leaders who prioritize data collaboration and secure privacy tools now will position their companies to achieve a competitive edge in the future.

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