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Cloud-based consent and preference management (CPM) systems are increasingly popular among carriers as a way to leverage collected data to target customer communications and marketing, according to Richard Huff, senior analyst at Madison Advisors, who has authored a report about CPM systems, and their value for balancing marketing with privacy concerns.
"CPM solutions provide insights into customer preferences and behavior by building a unified customer profile using data from across systems and lines of business within the organization," Huff wrote in a response to questions. "The profiles are detailed enough to differentiate between members of the same household who share the same address or phone number. With this profile, an organization's marketing department can produce highly personalized, targeted communications and digital ads for each customer.
"Using the personal data, digital advertising engines present eerily precise ads," Huff added. "The high level of personalization improves the overall customer experience and the targeted advertising increases the likelihood of a purchase or renewal."
CPM systems use data points such as phone numbers and email addresses to match customer data from different sources, Huff explained. The systems also mine web browser cookies to verify customer identities and preferences.
"The solutions blend the data with specific consents and preferences collected directly from each customer, typically through corporate websites and portals," he wrote. "Website consent templates and customizable preference pages are implemented to allow customers to choose which marketing, technical and general communications to receive."
CPM systems are distributed using APIs that fit popular applications such as Salesforce, Microsoft 365 and Snowflake. Developers can also connect CPM systems to an insurer's legacy applications.
As CPM systems fulfill their purpose for customer marketing, they also support compliance with privacy regulations, which are often a complex patchwork of state and federal rules, according to Huff. "These solutions offer significant cost savings by reducing the IT workload necessary to comply with data privacy, ethics due diligence and internal auditing," he said.
CPM systems collect data to create an audit trail of where and when customers consented to disclosing information to a firm and opted to receive communications from a firm, Huff wrote. In the EU, General Data Protection Regulation (GDPR) allows customers to request all data that a company is storing in its systems, and how the company uses the data and discloses it to any third parties. Under GDPR, customers can choose to compel a company to scrub all the personal data collected in its systems. California and 10 other U.S. states have their own versions of GDPR in place.
CPM systems reduce the cost for compliance with these GDPR provisions, including scrubbing data if requested. Regarding security of personal data, CPM systems are not a substitute for IT security platforms, Huff wrote, but can guide notifications to customers when a security breach happens.
"The workflow process will vary depending on the type of breach, such as data theft or a lost laptop, and requires varying levels of notification to regulatory bodies and customers," he wrote.
