Data science and privacy concerns in digital transformation

The explosive growth of customer data, generated from various sources, combined with increasingly powerful capabilities to analyze it, offers unprecedented opportunities for firms to better serve their customers in today’s digital world. However, the growing availability of detailed personal data and the alluring opportunities that this provides have also led to increased privacy concerns. This chapter discusses how customers’ willingness to share their personal data with firms is driven by a balance between the benefits that this may gain for them versus the privacy risks that they perceive when disclosing their data. Subsequently, it discusses another privacy balance which can be observed within organizations aiming to leverage detailed customer data effectively, while maintaining a high level of privacy protection. The chapter reviews the literature on both privacy balances and develops a framework that establishes how the two trade-offs are connected.