It’s a frequent and seemingly harmless occurrence in the auto industry. A customer interacts with a dealership and provides personal data to secure financing, book a service appointment or take a test drive. This consumer data is fed through numerous systems and platforms in the routine course of business. As normal as these situations seem, they have sparked intense debate about whether dealerships should have easy, unfettered access to data they collect from customers.
Under the guise of data security and privacy, some red flags have been raised that dealerships should not be able to easily access their own data and share it with other vendors. Access and flow of data to third parties can leave consumers vulnerable, some argue.
This argument, however, creates a false choice for dealerships. Data security and access isn’t an either/or proposition. As lawmakers, business leaders and consumer advocacy groups continue to look for the right answers to consumer protection policy, three key principles should guide every discussion:
1. Consumer data should be secure no matter where it’s stored.
2. A business that legally collects data should have full ownership and access to that data even when it’s stored with a third-party vendor
3. All costs associated with data access and integration support should be 100 percent transparent.
Dealers’ right to access their data is self-evident. Simply enabling security and capabilities should never limit or financially encumber a dealer.
I advise dealers I speak with that a good rule of thumb is to “follow the money.” A tech provider should be able to tell you exactly what your costs will be and clearly explain the value they are adding in terms of data processing, storage, analysis or integration support. Fees should be justified by value, not by a business model.
Creating business practices and regulations with these three principles is important because a compromise on either will hold back automotive retail to the detriment of all. Security is clearly important in this market and is simply the right thing to do.
From loan applications to vehicle recalls, few businesses collect consumer data as sensitive as a dealership. Even that routine test drive can create a data file with personal information that needs the highest levels of security.
At the same time, the auto industry has been burdened by one of the slowest, least customer-friendly purchase processes — largely created because dealership staff have to navigate multiple IT systems to complete the sale. Streamlining this process by connecting systems and sharing data has been a focus of ours for many years, but the coronavirus pandemic has proved that digital technology and the free flow of data across our operations are critical to business continuity both now and in the future.
The real path of advancement, though, is not choosing one or the other — security or access. It’s creating a system in which dealerships get both. Those trying to make dealers choose one or the other are simply protecting their own interests and holding back progress. They are holding dealership data hostage in the name of security, when it’s really about keeping their hold on the business. That math just doesn’t add up.
Tracy Fred is vice president for Cox Automotive brands Dealertrack DMS, VinSolutions and Xtime.