The Hidden Privacy Risks of Technology Pilots

Piloting new technology is exciting. It’s a chance to explore innovation, test ideas quickly, and see how emerging tools might transform the way we work. Whether it’s an AI solution, a new analytics platform, or a digital service prototype, pilots feel like safe spaces to experiment. But there’s a growing issue that’s easy to overlook in the rush to innovate: privacy.

Even in small, time-limited pilots, privacy obligations don’t disappear. The Privacy Act still applies. It doesn’t matter that it’s “just a pilot” or that only a handful of users are involved if personal information is collected, stored, or shared, your organisation is still responsible for how it’s handled.

Too often, pilots are treated as informal experiments, with the assumption that compliance, governance, and privacy can be sorted out later. Yet, the decisions made in those early pilots can have lasting consequences as let’s be honest many of these pilots just increase in user numbers and remain forever with no further work.

Data used in a pilot can linger long after the pilot ends. It might be retained by a vendor, used to train a model, or repurposed for “service improvement.” In many cases, organisations aren’t even aware this is happening because it’s buried deep in the vendor’s standard terms and conditions. The pilot vendor terms often give the vendor broad rights to use your pilot data for their own purposes, sometimes in ways that extend far beyond what you intended or approved. Even if the data is described as “anonymised,” that’s not always a safeguard. The definitions of anonymisation and de-identification vary widely, and in practice, re-identification is not as difficult as many assume.

This creates a serious risk. You might think you’re running a low-stakes pilot, but the moment personal information is involved, the stakes are anything but low. Once personal information leaves your control, it’s extremely difficult to retrieve or restrict its future use. Meanwhile, your organisation remains accountable for any misuse or breach, even if it occurs within a vendor’s systems.

Responsible innovation means treating pilots with the same level of care as production systems. It’s about building privacy and security in from the very beginning. That means reading the fine print before signing vendor agreements, understanding exactly how data will be used and stored, and setting clear boundaries around ownership and deletion. It also means limiting data collection to only what’s truly needed, and engaging your privacy, legal, and information security teams early rather than bringing them in once things are already in motion.

The Privacy Act doesn’t pause for experimentation, and neither should your commitment to protecting people’s information. Because in the end, the way you manage privacy during a pilot says just as much about your organisation as the innovation you’re testing.