Data Privacy Explained: What it is and why it matters

Would you leave your passport, bank statement, or medical file in the front seat of an unlocked car? Unlikely. The reason being, you wouldn’t want anyone to steal your information, and either know personal things about you or gain access to your accounts.

Data Privacy simply means keeping your personal information safe and not letting it fall into the wrong hands.

While you are trading with businesses and organisations every day, you may be providing personal data to conduct your transactions, booking flights, and doctor’s appointments. You want assurance that the business or organisation is protecting your data, to prevent it from being misused or shared without your permission.

Your data may be compromised during a data breach, which is an incident where unauthorised parties gain access to sensitive or confidential data i.e. simply put, an organisation system’s is hacked and the data stolen.

There are numerous reasons why organisations should be concerned about data privacy:

1. Penalties – Many countries have laws and regulations to protect data e.g., GDPR (General Data Protection Regulation), the European Data Protection Regulation which is known to impose substantial penalties for data breaches.
2. Reputation and Trust – Customers want to know that their information is safe – any knowledge of mishandling customer data or data breach erodes trust and damages reputation.
3. Financial Impact – It is costly to recover from a data breach. A data breach will require investigations, notification to affected individuals, and possibly legal action. Additionally, there could be a loss of customers and the reputation damage will increase the cost of customer acquisition.
4. Operational Continuity – Cyberattacks that disrupt the day-to-day running of the business lead to downtime and lost revenue.
5. Competitive Advantage – Customers are becoming increasingly demanding in how their data is treated and protected. Customers are more likely to choose an organisation that prioritises data protection.

So how can a business or organisation mitigate these risks? Addressing data privacy risks requires both technology and non-technology practices, which are numerous, so we highlight key mitigations such as:

1. Data Privacy Policies – Establish clear, comprehensive data privacy policies and procedures for the organisation, and ensure employees understand and follow the policies.
2. Audit and Assessment – Conduct regular audits and assessments of data handling practices and security measures to identify vulnerabilities and weaknesses, which should lead to corrective actions and improvements.
3. Access Control – Implement strict access controls to limit who can access sensitive data. Use role-based access permissions to enable only authorised personnel to view or modify specific data.
4. Third-Party Vendor Management – It is likely that your organisation works with vendors or other parties. Assess the data privacy practices of third-party vendors who may have access to your data to ensure they meet the same data protection standards you have.
5. Cybersecurity Management – A whole topic in itself, however, data privacy and cybersecurity go hand-in-hand, with cybersecurity being the tools and practices that act as a strong fortress around your data.

Given the increasing number of ransomware and cybersecurity attacks, it is imperative that organisations prioritise the risk of data breaches, in order to protect the data they have. Further, if you want your customers to remain loyal and maintain trust, protect their data, and treat it with the utmost care and protection.