What is data privacy?

Facebook’s $5 billion penalty is the largest ever imposed on any company for consumer-privacy violations, but it will certainly not be the last of its kind. Government watchdogs in the United States, the European Union, South America, and throughout the rest of the world are taking a firm stand against unauthorized data collection and use. Organizations that fail to update their data privacy policies run the risk of losing more than just the trust of their customers.

On the other hand, there are several benefits that may be enjoyed by companies that actively modernize their data protection playbooks, incorporating real-time, integrated, and automated technology to ensure that data is being used ethically, legally, and without violating the rights of data owners.

These advantages include the following:

As previously addressed, one of the most relevant business benefits of data privacy is avoiding penalties and fines. The punishment for failing to respect privacy laws is becoming increasingly steep, and that’s to say nothing of reparations to affected customers if their sensitive data is illegally made public.

More than that, government groups are taking their mandate to protect user data seriously, enacting new legislation and increasing their policing activities to ensure that companies are not putting customer data at risk. Organizations that create and follow adequate data privacy policies don’t need to worry about facing criminal charges.

The consumer-company relationship is one that goes well beyond purchase transactions; when a customer chooses to do business with an organization, they are trusting that organization to respect and secure any personal data that may be exchanged in the process. And when that trust is betrayed, it’s a difficult thing to earn back.

Privacy breaches cause serious reputational and brand damage. Today’s customers have so many options, and in many cases, a single error in terms of data security is enough to send them into the arms of competitors. Conversely, businesses that clearly demonstrate their commitment to data privacy, give their customers unrestricted control over how their data is collected and used, and act transparently in their data practices see increased customer loyalty. This means improved brand value and expanded customer lifetime value.

Data privacy management forces organizations to take a more-detailed look at their data and how it interacts throughout the business. Beginning with a detailed audit (and followed up on with regular ongoing audits) to determine how data is being collected and used, companies can easily identify and resolve data-management inefficiencies. This creates a more data-focused culture and helps streamline business processes, benefiting every department at every level.

Privacy initiatives may also encourage businesses to consolidate their data platforms, bringing all relevant data and data-management tools into a single, centralized location. This cuts down on the dangers associated with data siloing, and allows for better data analysis, increased data integrity, and more insightful business decisions.

It’s clear that in today’s business landscape data privacy is a major issue. But how can
organizations overcome the challenges and create a culture of data privacy? Here, we outline
several best practices to help businesses get started:

Data privacy is an issue and responsibility that affects the entire business; it shouldn’t be confined to the IT department. Take a holistic approach and involve every aspect of the organization in establishing and following data privacy policies.

Effective data privacy management depends on organizations having a clear idea of where the data is, what it includes, who has access to it, and how up to date it is. Mapping the data creates a detailed picture of a business’ current data situation.

Having viable policies, terms, and conditions in place is only half of the battle. A business that fails to follow through on these policies, leaving promises unfulfilled and obligations unmet opens the organization to legal liability and customer disillusionment.

Data collection is not a static process; the kind of data that organizations find relevant and useful may change from quarter to quarter, or even more often. That said, if those organizations decide to make updates to their data-collection-and-usage practices, they likewise must update their policies to reflect those changes.

No business is an island; third-party vendors and contractors might need to access sensitive customer data, so it’s vital that organizations fully vet these partners to ensure that they have reliable security practices in place. Otherwise, third-party entities become weaknesses through which data leaks may occur.

Every year, governments are taking a stronger stand against data privacy violations. Here is a list of several recent legislations aimed at strengthening data privacy in different areas around the globe:

European Union: Secures increased control for EU citizens over their personal data, simplifies and establishes data regulations for businesses, and addresses the collection and transfer of personal data outside the EU and EEA areas.

California: Enhances data privacy rights and consumer protection for California citizens, regulating how businesses may handle and use personal data.

California: Expands upon CCPA, strengthening data rights of California residents, establishing stricter business regulations, and expanding the requirement for consent to cover more scenarios.

Virginia: Gives Virginians more privacy control over their personal data, allowing them to access, modify, and delete personal information collected by organizations. Also establishes data collection standards and regulations for businesses of all sizes.

Brazil: Includes similar provisions and regulations to the EU’s GDPR. Also establishes that Brazilian businesses must appoint data protection officers to ensure that policies are being followed correctly.