5 Amazing Industry Applications for Data Clean Rooms

Few assets are as integral to a company’s success as its data. At the same time, few resources are as vulnerable and introduce as many regulatory and privacy complications. Balancing these sides can be complicated, but data clean rooms offer a solution.

Data clean rooms have been steadily growing since their inception a few years ago, though mostly in select industries. However, as data security concerns grow, this technology’s potential across all sectors becomes more evident.

What Is a Data Clean Room?

A data clean room (DCR) is a neutral, secure environment where multiple parties can store and analyze their data while protecting this information’s privacy. This potential for aggregating and acting on data while preserving security has led 64% of data decision-makers to embrace the technology. Another 21% are currently considering it.

DCRs consolidate information from two or more parties – often a publisher and an advertiser – according to a predetermined agreement. The agreement specifies what details the other party can access and how they can use them. The environment then automatically applies these restrictions, matches and cleans the data, and makes it available for further use.

A DCR typically protects this information through encryption, obfuscation, removing personally identifiable information (PII) and similar techniques. Many also automatically apply restrictions from applicable regulations like the GDPR. The result is all sides of the agreement use their data together for more reliable insights without overstepping security or privacy boundaries.

Which Industries Could Benefit from DCRs?

This combination of analytics and automatic privacy is advantageous for businesses in many sectors. Here are five industries that can see significant gains from employing this technology.

Marketing and Retail

Most data clean room adoption today is in marketing. With a DCR, retailers can combine customer data with information from other parties like marketing firms or social media sites to better understand their target market. The automatic policy enforcement of a DCR agreement addresses growing social media privacy concerns in the process.

A DCR lets advertisers maintain business relationships with retailers without jeopardizing users’ data privacy. Similarly, retailers can tailor their marketing strategies without taking on the risk of managing PII, as the DCR will strip those details from the data.

As privacy regulations become increasingly common and stringent, this balance will become all the more critical. Complying with these regulations is also easier with a DCR, as retailers themselves do not need to manage the technical side of data privacy protection.

Financial Services

The financial industry can achieve similar benefits from data clean rooms. The rise of FinTech gives banks and other institutions access to more user data than ever before, enabling personalized services, but this sensitive information carries significant risks. Aggregating it in a DCR helps capitalize while preventing PII leakage.

Banks can use DCRs to combine their data with information from other services their clients use. With this new data, they can offer more personalization or establish normal behavior baselines to improve fraud detection.

Financial institutions can also use DCRs to share information between banks securely. This interconnectivity would enable faster mergers and acquisitions and make it easier for clients to switch banks without putting their PII at risk.

Health Care

The health care sector is another industry with stringent data privacy requirements, making it an ideal use case for DCRs. Organizations managing protected health information must verify data transactions considering three core factors – the recipient, the data itself and the transfer method – to keep it secure. In a conventional setup, that can take time and limit accessibility, but DCRs make it easier.

A DCR can automate compliance with HIPAA and similar regulations to streamline data security as hospitals share information. They can then ensure consistent patient care across facilities without opening patients’ health data to vulnerabilities.

Sharing PII-stripped medical information will also aid faster, more secure medical research. Research hospitals can use DCRs to compile their case results to provide large sample sizes, revealing significant medical trends while protecting patients’ privacy.

Manufacturing

Manufacturing also relies heavily on data-sharing between organizations to inform strategic decisions. Data clean rooms can help these companies promote supply chain visibility while staying safe from rising cyber threats.

A DCR provides an independent, secure place where all parties in a supply chain can share their data without taking on excessive risk. Manufacturers, their suppliers and third-party logistics providers can then get a complete picture of the supply chain. With that information, they can adjust as necessary to prevent delays and minimize costs.

Manufacturing is becoming increasingly digitized as businesses try to attain this visibility, but these organizations are not used to managing cyber threats. As a result, the sector has become the target of 30% of all extortion attacks – more than any other industry. Using DCRs to manage security while improving data-sharing will help address this trend.

Education and Research

Like manufacturing, the education industry has faced increasing cyber risks as it has embraced digital transformation. Data clean rooms offer a way for educational institutions and researchers to share information while protecting student or study participant data.

Just as retailers use DCRs to understand trends in their customer bases, school systems can use them to understand their student population better. This insight allows them to adapt to changing student needs more effectively, ensuring better educational outcomes.

Higher education facilities can also use DCRs to collaborate on large research projects with other institutions. Multiple schools can share resources and data, leading to more reliable study results while complying with increasing data privacy regulations. DCR agreements could also account for legislative differences between nations, enabling easier international research collaboration.

Data Clean Rooms Are Useful for Many Industries

Despite their reputation for primarily being a marketing technology, data clean rooms are a versatile tool. As more industries ramp up their data analysis processes while facing increasingly strict regulations, DCR adoption will spread across a broader range of sectors.

Virtually any company that relies on data-sharing with other organizations can benefit from a DCR. Learning how to implement these technologies effectively can prepare businesses for a future where DCRs are an industry standard. While they are far from the only step companies should take to secure their data, they can offer crucial privacy advantages.