July 25, 2024

Two thirds of UK SME leaders seek data privacy reform to address GDPR shortcomings

DMA calls on Parliament to urgently pass new DPDI data privacy reforms, as new research reveals SMEs want reforms which address fundamental GDPR challenges

Two thirds of SMEs (66%) are supportive of the UK Government introducing updated and modernised data privacy regulation to address inherent challenges of GDPR, according to a new study by the UK’s marketing trade body, the Data & Marketing Association (DMA UK).

The DMA’s new report: ‘Data Horizons: How UK SMEs and Consumers View the Future of Privacy Regulation’, reveals there is strong demand among SME business owners for revised regulation that is fit for purpose, putting the customer at the heart of data privacy provisions as the digital economy continues to grow and evolve.

Businesses and their marketers need data-driven insight to create the products, services, and experiences that will drive growth. Most SMEs (74%) agree that the processing of personal data is vital to the growth and success of their business.

This comes as the Data Protection & Digital Information Bill (DPDI), which is set to update the UK’s data protection framework, will soon conclude its journey through the House of Commons, before moving into the House of Lords.


“Most SMEs seek reforms to UK data privacy legislation that makes it easier to attract new customers and retain existing ones”, said Chris Combemale, CEO of the DMA. “This is key to unlocking business growth and realising the full potential of the UK digital economy; by using customer insights to simultaneously improve the productivity of businesses and save time for customers through personalised services.”


Businesses admit to facing inherent challenges presented by UK GDPR when it comes to processing personal customer data. Nearly half (48%) of SMEs expressed concern that GDPR introduced unnecessary bureaucracy to businesses, while well over a third (37%) say it doesn’t work for small businesses.

Alarmingly, nearly half of SMEs (43%) reveal that their business marketing operations have been stunted by GDPR and nearly a third (31%) claim GDPR has caused them to get rid of a lot of their customer database.

The types of reforms demanded by SMEs are those which will help them tackle the extremely challenging economic climate and deliver sustainable growth.


“Reforms within the DPDI Bill will create a better balance between innovation and privacy, maintaining GDPR’s high levels of data protection while enabling scientific and technological innovation that will power the future economy”, added Combemale. “There is strong support for these opportunities across the UK’s SME community, so we would urge UK Parliament to complete passage without hesitation.”


Addressing GDPR’s limitations

GDPR’s complex legal text caused confusion among many businesses on how best to maintain customer databases, filled with engaged customers, and how to communicate with existing customers — resulting in a significant loss of potential customers.

Three quarters of SMEs (75%) want data protection regulations that easily enable them to prospect for new business; and a similar percentage (76%) want regulations that make it easier to talk to their current customers.

DPDI will give much-needed clarity to data processing, particularly surrounding legitimate interests*, one of six lawful bases under GDPR and equal in the legislation to consent. In fact, no basis is ‘better’ or ‘more important’ than the others in UK GDPR.


“Attracting and retaining customers through clearly defined legitimate interests will help businesses to feel more confident using this option for direct marketing, helping them to better communicate and engage with their customers,” concluded Combemale. “It will not impact existing privacy protections — customers retain an overriding right to object to marketing at any time.”


Further information can be found on the DMA website: https://dma.org.uk/article/uk-smes-support-pending-reforms-to-uk-data-privacy-laws