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This NASDAQ Advisor Thinks Markets Are Tumbling Over Data Privacy

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It was a volatile year for the markets. In mid-June, the S&P 500 fell 3.3% and fell 23%, its lowest point since December 2020. Experts attribute this to inflation, supply chain problems and high interest rates. But according to Dominique Shelton Leipzig, member of NASDAQ’s Risk and Cybersecurity Council, there’s another factor contributing to the market’s fall: changes in data privacy. In 2021, states have proposed or adopted 27 data privacy accountsan increase from two in 2018.

londonbusinessblog.com talked to Leipzig about the relationship between data privacy and the markets, and what companies could do in response to the changes. This interview has been slightly edited for clarity.

Let’s dive right in. What do you see as the connection between data privacy and the tumbling markets?

We first noticed this in the tech sector.

During a profit call in February, we had a particular platform with a market cap of one trillion. And as a result of changes in data privacy, from the choice to opt-out to the desire to opt-in, when users were given the choice of whether to allow apps to track them, and track them or not, 85% of them said no. This resulted in a loss of advertising revenue. And it also affected the entire industry, not just one company. At the end of the first quarter, NASDAQ lost $1.3 trillion in market capitalization.

The digital advertising ecosystem is a $400 billion business. And as advertising became less accurate, advertising dollars shifted to a lot of different industries. It’s not just technology companies that are spending money on digital advertising: financial services spent just over $20 billion last year, retailers spent more than $30 billion on digital marketing, and packaged consumer products are somewhere in between. These shifts in the market to less precision caused a sell-off in the market resulting in a loss of $1.3 trillion that we had. There are certainly other contributing forces, the supply chain, Ukraine and COVID. But what was initially the trigger, which happened in February, was data privacy.

Dominique Shelton Leipzig

How would you recommend companies balance customer privacy rights against their need for data?

I think data leadership is really key in this process. During the pandemic, I read a statistic that we generate 2.5 trillion bytes of data a day worldwide: that’s 18 zeros behind it. And that’s everything from connected cars to connected refrigerators, voice, wearables, connected healthcare, financial services, etc. You know, the other thing that matters to me is as big as those 2.5 trillion bytes seem today, it will just get bigger .

Even though data doesn’t appear on a balance sheet, it’s important for leaders, officers and directors to view their data as the assets that impact their bottom line.

Companies need to start thinking about what data they need to achieve their short- and long-term goals, then think strategically about what steps are needed to gain consumer trust and develop mechanisms for the kind of transparency and communication that comes from it. results

What concrete steps would you advise companies to take?

I think the first thing businesses need to understand and realize is that data privacy and data is no longer a matter of compliance; it is a business necessity, just like any other matter that has gone from legal to business necessity, such as antitrust, where a special board of directors is a good idea. We need to bring together those with deep data knowledge and those with knowledge of strategy. At the moment there is a disconnection, and that leads to situations such as nine-figure fines coming from Europe. Companies should not try to go it alone and learn it on the spot. This is something that moves our markets by the billions. And it does require immediate attention is the first thing.

The second is to think about their strategy right now. What data do companies need to make their strategy successful? How is that data shared and what do they do to secure that data? From there, a series of steps can be taken. Companies may realize that they are collecting a lot of data that is not essential to the strategy – and this happens with many companies. And they can then think about how to collect other data essential to the mission.

I look forward to Fortune 500 companies taking on a leadership role and trusting that their data is their greatest asset.

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