What Is Data Privacy and Why Is It Important for Businesses?
Data is the lifeblood of any organization. From invoices to email correspondence, all this data contains pertinent details that need to be protected to keep your organization afloat in the current era. Having this information fall into the wrong hands will result in serious repercussions for your business, employees, customers, and possibly even your government.
That said, it’s vital for organizations to have policies in place to ensure the maximum security of this data. This means being able to fortify your enterprise network infrastructure to comply with standards that secure personally identifiable information (PII) such as credit card numbers, social security numbers, home addresses, and health records. Your organization would need to take steps such as adopting robust security frameworks and investing in a data privacy compliance solution to safely modernize your operations in a digital world.
And with cybersecurity being an ongoing global concern, it’s important for business owners to know the fundamentals of data privacy to stay one step ahead of malicious actors.
Data Privacy and Data Security: What’s the Difference?
Before you get into the nitty-gritty of data privacy, you have to understand how it differs from data security. Most of us tend to use them interchangeably, but both terms have different focus areas. Data privacy is a branch of data security that revolves around the way entities handle data. This includes aspects like data collection, regulatory compliance, and user consent. In essence, data privacy focuses on how an entity collects, stores, and handles data that may or may not be shared with third parties.
Data security, on the other hand, involves keeping an entity’s data secure against attacks. This concept focuses on the specific actions and processes that an organization must take to prevent data corruption and unauthorized access. To ensure data security, IT teams often deploy strategies such as tokenization and encryption.
Why Should Your Business Care About Data Privacy?
Here are some of the reasons why investing in a data privacy solution provides alot of benefits beyond merely protecting your company’s valuable data.
Meets Consumer Demands on Privacy
We live in an era when data is basically the new currency. We use a lot of apps and software that ask for our consent to collect data. As cyberattacks get more sophisticated and users become more tech-savvy, it’s important for your business to address consumers’ demands when it comes to their personal data.
Improves Brand Image
Consumers are likely to stay loyal to a business that constantly shows trustworthiness. To fortify your brand reputation, you need to be efficient in preventing data breaches and information leaks, especially if you use an online platform for financial transactions.
If you operate in the ecommerce industry, your business may also require peer-to-peer transactions through an online platform. Dodgy data privacy policies could lose the trust of third-party providers and paralyze your business.
Shows Your Compliance with Privacy Regulations
Most countries have regulations in place to ensure that companies respect their customers’ need for data privacy. These laws strictly mandate strong access controls for the protection of sensitive data. The General Data Protection Regulation (GDPR) is one such data protection and privacy law passed by the European Union (EU) that aims to impose rules on how companies should process personal data. The GDPR website refers to this regulation as the “toughest privacy and security law in the world.”
Other compliance laws that you should keep in mind are the California Consumer Privacy Act (CCPA), Gramm-Leach-Bliley Act (GLBA), and the Health Insurance Portability and Accountability Act (HIPAA).
Saves Your Business from Recovery and Non-Compliance Costs
Data privacy is no longer just about protecting your intellectual property or financial information. It’s also a way of safeguarding your funds against costly incidents. Data breaches can result in recovery costs worth up to USD 3.92 million, while GDPR non-compliance fines can go over USD 126 million.
Helps Your Business Stay Competitive
With the deluge of services and information that are easily accessible via the internet, it’s no wonder that we refer to the cyber world as a digital arena. With this highly competitive landscape, your business can keep up by being a trusted, modern company in the digital age.
Even if you’re a small business, you can easily gain a competitive advantage by investing in data privacy precautions. As devices become more interconnected, it’s already a bare minimum for any budding enterprise to build a brand strategy that strongly considers data privacy.
Protect Your Data, Protect Your Business
Having a strong focus on data privacy allows people to take your business seriously. But aside from enforcing strict privacy policies and having the right security capabilities, you can go beyond data privacy goals allowing customers to tweak privacy settings.
Ultimately, data privacy should be a collaborative effort. By combining corporate initiative with individual responsibility, we can prevent disastrous consequences before they even occur.