What is Consent Management Platform

What is Consent Management Platform? Why Do We Need It?

(Last Updated On: June 3, 2022)

What is the consent management platform and why do we need it? We have all been using the Internet to do business for many years now. However, the Internet is certainly evolving and changing all of the time. This is something that all companies need to keep on top of.

With people increasingly sharing their personal data on the Internet, whether through social media, buying products, banking, or simply browsing, consent management is something that cannot be ignored anymore.

This is especially the case when you consider that more than 90 percent of online users around the world have had at least one significant concern about their data privacy. 

With that being said, below, we are going to tell you everything you need to know about consent management. This will help you to understand what consent management is, why it is important, and how to implement it effectively in your business.

Understanding consent management

Consent management is the process or act of managing content from your customers and users for processing their personal data. 

In other words, consent management means that you give your users the option of opting in or out of specific cookie categories, such as marketing, statistics, and preferences, as well as being able to consent and withdraw their consent if they choose to do so. 

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Consent management is all about giving your users the power to exercise their right to privacy.

What does a consent management system encompass?

There are a number of different elements of a consent management system, such as the following:

  • You need to ask for consent by clearly disclosing what the consent is being given to and how the data is going to be utilized. 
  • Ensuring that all tracking is held back until the proper consent is provided. 
  • You must securely store all consents as documentation that the consent has been acquired. 
  • Give your users access so that they can withdraw their consent at any moment. 
  • Consent should also be renewed on a yearly basis. Nevertheless, there are some national data protection guidelines that advise renewals on a more frequent basis, for example, six months. Because of this, you should check local data protection guidelines for compliance.

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Understanding the different types of consent management

There are three different approaches you can take when it comes to consent management; opt-in, opt-out, and hybrid. All three approaches are used for consenting to disclosing, using, and collecting personal data. 

So, let’s take a look at them in more detail…

Opt-out consent

The opt-out method is one that is most recognized by customers in the United States. With this approach, businesses are allowed to divulge that they collect and utilize data. However, customers have the option of opting out of this if they wish to do so.

With this approach, it is the customer that needs to take action, such as filling out a form to withdraw their consent for data collection or unchecking a pre-checked box. 

You are required, as per the CCPA, to disclose the data you collect and your reason for doing so. However, it does not state what approach you need to use for this.

It is imperative that you’re aware that the opt-out method is longer accepted in the EU. Because of this, you have to go for the opt-in method if you operate on an international basis, and we will explain this in more detail in the next section.

With the GDPR, you are required to allow users to opt-in and opt-out of the use of their data, and if you are going to be processing personal data of a sensitive nature, explicit consent via the opt-in method is needed.

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Opt-in consent

With opt-in consent, users need to take action to confirm their consent for data to be collected and used. Businesses use this method for opting into subscriptions, cookies, and more. 

This approach is not as common in the United States because it means that businesses have to get consent before processing, as opposed to user consent being granted by default.

As more and more locations implement policies covering data privacy and management, it will become more challenging to rely solely on an opt-out policy. If you do so, it could mean your business is at risk of non-compliance. 

Instead, if you require users to manually consent to all or some of your data collection and use policies, it means that consumers will have more control over their data and the way it is used. This can help to build loyalty and trust. 

As per GDPR, opt-in consent is a necessity. At the moment, though, CCPA only states that customers have the right to opt out. However, it is not improbable that we will see this in the future when amendments are made to the legislation to ensure better customer data protection. 

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A hybrid approach

Last but not least, a lot of businesses decide to go down the hybrid route when it comes to consent management. After all, the privacy landscape is evolving, and rapidly so. This means that it is not always obvious which option is going to be right for your business. With a hybrid approach, you can incorporate elements of an opt-in and opt-out model.

The exact approach you use will depend on the sort of data you are collecting, and also how you are using that data. 

A good example of a hybrid model is when a business uses an opt-out method for most situations unless the sensitive personal information is being collected. In that instance, the business would make the switch to an opt-in policy, ensuring that they receive explicit consent from a user before they collect and process personal information.

A hybrid model can give businesses a solution that is not only compliant with CCPA but GDPR as well, and also any other standards that are in place. At the same time, users will enjoy a level of control over their data, which is critical in the modern-day and age.

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The importance of consent management 

There are a number of different reasons why consent management is so important for businesses today. This includes the following:

You can build trust amongst the public 

One of the main reasons why consent management is critical for businesses is because it builds trust amongst the public. Data breaches have eroded the trust that people have in businesses all around the world, especially in terms of their capability to protect sensitive data. 

A report published by McKinsey regarding consumer privacy and data has highlighted this. It has shown that individuals who were not impacted by cyber-attacks have watched how businesses responded to them. 

It was revealed that 87 percent of individuals said they would not do business with a company anymore if they gave away sensitive information without their permission. 

Therefore, by investing in consent management and showing your customers that you care about their data, you can make sure that consumers trust your business and feel confident in your professional reputation. 

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Avoid hefty fines and legal trouble

No business is exempt from privacy rules and regulations, yet large corporations have been repeating offenders when it comes to privacy violations. 

The GDPR has been implemented, and this is one of the most stringent data protection laws in place. Under this regulation, there have been hundreds of fines levied on businesses around the world that operate in the EU in any capacity. 

At present, the biggest fine on record was issued in 2021 to Amazon, at a record $877 million, for a problem relating to cookie consent. 

Consumers demand transparency in privacy and data today

The sheer fact that consumers demand privacy and data transparency is reason enough to put consent management at the top of your list of priorities. 

Privacy is deemed a basic human right today, and rightly so. While a lot of privacy rights were established well before laws about online privacy and data, customers are increasingly demanding transparency in their online activities. 

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Manage consent with a specialist platform

A consent management platform can help you efficiently manage this area of your business. You can handle data subject access requests (DSARs) quickly and effectively. You will also be able to streamline operations and build trust with existing customers and potential customers. 

Other benefits include meeting the needs of your company with bespoke solutions, as well as ensuring your employees have the time they need to spend on other elements of your business, putting their skill sets to best use. 

Don’t allow consent management to be an afterthought 

So there you have it: everything you need to know about consent management and its importance of it in the organization. We hope that this has helped you to understand why consent management is something that all businesses need to take seriously. 

From avoiding legal troubles and fines to making sure you are transparent in terms of data privacy, in today’s modern world, data privacy always needs to come first. I hope this article on what is the consent management platform and

Guest Article By Kate Brown

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