Written by Sarah Shelley

These days, businesses collect data left and right. While data collection can be extremely informative from a business perspective, it can also be dangerous when data is collected or used in the wrong ways. 


Enter data ethics, a concept that is hardly new, but is seeing increased attention and focus as consumers are beginning to care more about how their information is being collected and used. 

So, what is data ethics and what does it mean for data to be used responsibly? These are all important things to understand in an evolving business world. 

Principles for Responsible Data Usage in Business Analytics 

Specifically, ethics in data collection, also known as what data ethics is, refer to the principles that businesses should follow when it comes to how they collect, use, and protect data from any number of sources. The idea behind data ethics is that these companies and organizations carry an inherent responsibility to keep information safe and secure. Within data ethics, there are some essential principles that all business professionals should be aware of and incorporate into their own workplaces whenever possible. 


Ensuring Transparency in Data Collection and Use 

Transparency is a crucial principle of data ethics, referring specifically to the consumer's ability to understand exactly what kind of data is being collected, how it is being collected, and how it is potentially being used. Transparency in data collection and use is critical to building customer trust and preventing misuse of information after it is collected. 

In some cases, businesses may even give consumers the ability to "opt out" of certain data collection practices. While this may seem counterintuitive for businesses looking to collect as much relevant information as possible, the reality is that allowing customers to opt out can help further build trust and brand loyalty. 

Prioritizing User Consent and Data Privacy 

Consent and data privacy are also becoming increasingly important topics when it comes to this idea of ethical data collection. Specifically, data privacy means that a person should have a reasonable expectation that their data will be protected from public exposure. Oftentimes, the idea of data privacy and consent go together because if you consent to provide your information or data to a business, you have a reasonable assumption that your data will be kept secure. 

Implementing Fair and Unbiased Data Processing 

Often, data collection and processing involve the use of algorithms to interpret large amounts of information at once. This can help decision-makers reach data-driven interpretations and insights from data without the time-consuming task of going through it all manually. 

The problem with this kind of data processing is that it comes with the inherent risk of bias. That's because all it takes is one poorly written algorithm to result in biased value chains and unfair interpretations. Unfortunately, these interpretations can then be used to make decisions that are extremely damaging to certain populations. 

With all this in mind, businesses need to be especially mindful of the algorithms and other systems they rely on to process and gain insights from their data. In doing so, they can prevent bias and keep things as objective as possible. 

Promoting Accountability in Data Practices 

Another critical thing to keep in mind when it comes to ethical data practices is accountability, which refers to a company taking responsibility for everything that happens to a consumer's data after they have collected it. This includes potentially negative things, such as information leaks and breaches. 

When a company takes accountability for the data it collects, there is always a clear trail of responsibility when things go wrong. This makes it possible for businesses to set things right when consumer information is leaked or otherwise used improperly and ensures there is no question regarding who is responsible for the problem and how it will be addressed. 

Committing to Data Security and Protection Measures 

When it comes to data ethics principles, perhaps none is more vital than that of data security and protection. These days, there are so many different types of web attacks that occur on a daily basis. Businesses of all scopes and sizes can be vulnerable to these attacks and thus need to plan accordingly to keep consumer information as secure as possible. 

This means being proactive about data security and protection, which can be done in a number of ways. For most businesses, the best course of action is to actually work with a cybersecurity professional who can conduct a comprehensive audit of the company's data collection and protection measures. From there, this professional can make recommendations regarding security improvements that should be made to optimize security and keep data safe. 

Taking data security seriously is the responsibility of every business and always begins with making sure the right protections are in place to minimize the threat of a data breach or similar attack. 

Encouraging Ethical Data Sharing and Collaboration 

Years ago, it was not very uncommon for businesses to not only collect consumer data without their consent, but to share it with or sell it to third parties. Today, a huge aspect of data ethics centers around the idea that once companies collect information about a consumer, that information is not to be shared or sold to another party without the person's consent. This is an idea that all business professionals should take seriously, as major lawsuits and other legal issues can result when a company is found to be illegally selling or sharing consumer data. 

Upholding Data Accuracy and Integrity 

Another essential aspect of ethics in data collection is the idea of upholding the integrity and accuracy of data. This should mean having a strong data governance plan in place that builds the foundation for accurate data collection, as well as running occasional data quality audits to check for potential errors or anomalies. 

From there, maintaining data integrity means taking the time to back up data on a regular basis. This will create copies of data to ensure that it is protected, even in the event of a corruption or loss on a single server. For maximum data integrity and protection, backups should be stored in a secure and remote location outside of the business itself. 

Fostering Responsible AI and Machine Learning Algorithms 

These days, artificial intelligence (AI) and machine learning technology is being used in data collection and data analysis more than ever. And while there are certainly some potential benefits that come along with utilizing AI and machine learning in data analysis, there is always the risk of utilizing flawed algorithms that could result in skewed data reports or other biased results. 

With this in mind, all business professionals handling data collection and analysis should understand how to foster responsible AI and machine learning algorithms. This should be done by first establishing a data code of ethics that focuses on protecting user privacy and promoting transparency. From there, business professionals should collaborate as much as possible with others to build the most ethical and responsible systems and algorithms possible, keeping in mind that there is always room for improvement. 

Supporting Continuous Ethical Education and Training 

Ideas around data ethics and best practices for collecting/using data are constantly evolving and changing, which is why it's so important for business professionals to stay on top of these changes and commit to a lifetime of continuous ethical education. This includes not just business professionals themselves but ensuring that all employees tasked with making decisions regarding data collection and data usage are provided with the same level of support. 

When employees and other decision-makers have access to the continuous education and training they need, they can more readily make ethical decisions with confidence. This keeps the organization moving toward ethical data collection and usage practices. 

Engaging Stakeholders in Ethical Decision-Making 

Of course, it is not just business higher-ups and employees tasked with knowing how to collect and use data ethically. These days, stakeholders who have a share in a company should also be informed and engaged in the process whenever possible. This means keeping stakeholders up to speed on changes regarding data collection and usage protocols, as well as explaining the ethical reasoning and rationale behind these changes where applicable. 

Impact of Ethical Data Practices on Business Reputation 

When businesses follow ethical practices when it comes to collecting and using consumer data, everybody wins. In fact, there are several ways in which businesses can benefit from having solid data ethics practices in place. This ranges from the ability to build customer trust and loyalty to avoiding compliance risks and standing out against industry competition. 

Building Trust With Customers and Partners 

It doesn't take much in the way of research to discover examples of major data breaches and other instances where businesses simply weren't as serious about protecting customer data as they should have been. Unfortunately, poor data ethics can result in major events, like misuse of data internally and even data breaches. 

On the other hand, when businesses do follow ethical data practices, they can build trusting relationships with their customers and their industry partners. This is because consumers know that they can count on these businesses to collect data responsibly and to use their data ethically. All of this helps businesses boost their own reputations as being trustworthy and reliable. 

Enhancing Competitive Advantage 

No matter what industry your business operates in, there's a good chance you have your fair share of competition. These days, consumers are becoming more and more concerned with how businesses are collecting and using their data. That said, following ethical and responsible data practices could be what ultimately sets you apart from your competition and helps you earn somebody's business over another company. Also consider the fact that trust is one of the most valuable brand assets that your company can have. In this sense, following ethical data practices is something that can pay off many times over. 

Mitigating Legal and Compliance Risks 

Following ethical data practices is paramount not just in the sense that it helps your business build trust and set itself apart from competitors, but because it could actually protect your business from facing costly and troublesome legal and compliance risks. These days, there is data protection regulation in place meant to set basic principles for ethical data collection that all businesses should follow. 

To note, the General Data Protection Regulation (GDPR) outlines how businesses should collect and use data from customers with transparency, fairness, accuracy, and confidentiality. Combine this with existing data privacy laws that already exist in some industries, such as HIPAA regulations in healthcare, and it's easy to see how even a small mistake or misstep can land a business in a world of legal trouble. In some cases, fines and hefty penalties may even apply. 

When ethical data practices are at the forefront of the business decisions that you make, you can mitigate the risk of these costly mistakes and keep your organization in good standing. 

Challenges in Implementing Ethical Data Strategies 

In theory, of course every business professional would like to implement ethical data practices in their everyday work. Unfortunately, the reality is that it isn't always easy to implement these practices and strategies. In fact, there are a myriad of challenges and obstacles that business professionals may face as they work to reform and improve upon their data collection and usage practices. 

Navigating Complex Regulatory Landscapes 

First, it is important to understand how complicated the regulatory landscape can be when it comes to data protection laws and regulations. In addition to following standards set forth by the GDPR in the United States, there are also individual regulating bodies that may apply to businesses operating within certain industries. 

With this in mind, business professionals need to constantly make sure they are up to date on the latest changes in regulations and data privacy laws in order to avoid falling out of compliance and facing potentially serious repercussions. This can be extremely time-consuming, and this isn't even considering the effort and time into ensuring employees are properly trained and educated on the latest regulatory practices. 

Balancing Innovation With Ethical Considerations 

Another potential challenge to take into consideration is that there is a constant drive to bring in new data collection and analysis innovations as a means of making businesses more streamlined and efficient. Unfortunately, the problem here is that these innovations, such as AI and machine learning technologies, are not always without their own ethical biases. Business owners then must find a way to strike a balance between innovating and taking proper ethical considerations into account when it comes to collecting and using data. 

Addressing Bias and Fairness in Data Analytics 

Finally, there is always the pressing issue of bias and fairness in data analytics. Often, algorithms used to process and interpret data can have their own implicit biases that skew results unfairly. When business owners make decisions about the kinds of algorithms and software, they will use to handle data collection and analysis, they need to know specifically what to look for when it comes to fairness. This can be easier said than done, especially for business professionals who may not have much in the way of an analytical background and thus may not know what to look for. 

In these instances, it often makes the most sense to consult with an experienced business analyst who will know what to watch for when it comes to bias and fairness in data analytics platforms and practices. 

Advance Your Business Education 

As you can see, understanding how to collect and use data responsibly and ethically can help your business build trust with its customer base while boosting its competitive advantage and mitigating legal risks. As a business professional, data ethics should be at the forefront of every decision you make. 

Looking to enhance your business education with an advanced degree? University of the Cumberlands is proud to offer a Master of Science in Business Analytics degree program that can be completed entirely online, preparing students with the most in-demand business analytics tools and techniques in today's dynamic world. Get in touch today to learn more about this program or get started with your online application for enrollment.