All Your Business Needs to Know about Data Privacy

Data privacy has never been more relevant than it is today. Consumers are becoming more privacy-conscious and asking the right questions about their data. Businesses, in turn, are beginning to understand and implement robust data privacy practices, especially in light of increasing government regulations and consumer awareness. To remain relevant and keep the much-needed trust of the consumer, businesses of any size need to think seriously about data privacy and security. Let’s take a look at the key aspects of data privacy that businesses need to be aware of.

But first of all, what is data privacy?

Data Privacy

The term "data privacy" describes consumer's ability to choose and control how their personal information is used, as well as the security, processing methods, and procedures that companies employ to protect that information. It is all about putting control in the hands of the consumer, or at the very least, making sure they have a say in how their data is being used. 

By prioritizing data privacy as a business, you are telling your customers that you value their privacy and will not do anything to compromise it. This can help build trust with your customers and attract even non-customers.

Why is Data Privacy Important?

Compliance

Many governments have sat up when it comes to what companies can do with people’s data. They have crafted data privacy laws meant to address companies’ handling of customers’ personal information. We have seen the US enact several federal and state laws updating its privacy laws. Since the Privacy Act of 1974, there have been the Health Insurance Portability and Accountability Act (HIPAA) of 1996 and the Gramm-Leach-Bliley Act of 1998, to name a few. In Europe, it is the same story as the EU enacted the General Data Protection Regulation (GDPR).

Companies can no longer afford to do what they please with customers' data unless they run the risk of getting into serious legal trouble and paying hefty fines.

Customer Trust

With the sheer amount of information customers leave in the hands of the businesses they patronize, it is becoming increasingly impossible to operate a company without first earning your customers’ trust. Whichever way you turn it, data privacy is a big part of earning customer trust. With roughly a quarter of Americans being targets of data breaches in the past year, it is not surprising that at least 71 percent are concerned about how their data is being used. 

Competitive Advantage

Your business’s ability to keep its customers’ data private gives it an edge over its competitors. Companies like Apple, known for their strong privacy stance, have seen tremendous year-over-year growth. Such companies report better regulatory compliance, risk management, and consumer satisfaction.  

Brand Reputation

In today’s world, your brand reputation is tied to your data privacy policies and how well you can keep your customers’ personal information secured. Huge companies like Facebook, British Airways, and Uber suffered huge losses to their brand because of data breaches that highlighted their poor stance on data privacy. Ashley Madison, the dating site, is still reeling from the damages of a data breach it suffered nine years ago.

Key Principles in Data Privacy

Transparency: Businesses that take privacy seriously are very open about what their policies are regarding data collection and usage practices. They do not leave it to the customer’s imagination.

Data Minimization: Businesses should only collect data when they need to and use it only for its intended purpose.

Fairness: Businesses have to place a premium on processing personal data fairly and legally.

Accuracy: The data collected should be accurate, up-to-date, and complete 

Purpose Specification: It is important to define what exactly your business is collecting data for and stick to using the data for that purpose only. 

Integrity and Confidentiality: A lot of effort needs to be put into making sure that data entrusted to your business does not get into the hands of unauthorized parties and bad actor.

Accountability: Businesses must set up measures to make sure that they are compliant with all data principles.

Storage Limitation: It’s important to only keep data for as long as necessary or according to legal requirements.

Data Privacy Best Practices

Carry Out Data Privacy Assessments: Identify and assess your business's data collection and processing activities. Know what your strengths and weaknesses are and make changes accordingly.

Develop a Good Data Privacy Policy: Create a comprehensive policy that outlines your business's data privacy practices and procedures. Your policies should touch on data collection, data sharing, user rights, and regulatory compliance, to mention a few.

Implement Data Security Measures: Protect data from unauthorized access, breaches, and loss by ensuring you are ahead of the curve with your security measures.

Provide Clear Consent: Obtain explicit consent from users before collecting and using their data. Also, make sure they are opt-out options.

Train Employees: Educate employees about data privacy regulations and best practices. Every employee who handles data has to understand the importance of its security and value users' privacy

Respond to Data Breach Incidents: Plan for the worst. Have a plan in place to respond to and mitigate data breaches effectively. If it means getting ethical hackers to find weak spots in your security, do so. A data breach could ruin your business.

Final Thoughts

As a business, it is important to be mindful of your users' privacy. By understanding and implementing data privacy best practices, businesses can protect their customers, maintain their reputation, and comply with relevant regulations.