How Poor Data Protection Practices Affect Consumers and Businesses

With the rise in data security breach incidents, there is a growing concern that consumers are not adequately protected against private information disclosure and identity theft in our expanding digital world.

There are many data security challenges facing consumers and businesses. Consumers continue to wittingly share personal information on social media and other third parties without much concern for privacy while they expect businesses that collect their information to protect their personal data and privacy rights. On the other hand, organizations must find a balance between data collection, security spending, and compliance efforts to meet their business needs, regulatory requirements, and risk management obligations. "Often, information protection is an afterthought when decisions are made regarding data creation, collection, sharing, and storage" says Henry Bagdasarian , Founder of Identity Management Institute.

Consequences of Poor Data Security

The consequences of poor data security practices for consumers include identity theft and fraud which can impact consumers’ credit worthiness, time spent on fraud resolution, stolen account balances, and locked accounts. For businesses, the consequences can include lawsuits, fines and penalties, lost productivity due to investigations, loss of revenue, reduced customer loyalty, and reputational damage.

Data Security Practices for Consumers

While consumers increasingly work remotely and interact online, they must take precautions to protect their personal information and files. They must share the minimum necessary amount of information for conducting business and while socializing online. They must take advantage of password management tools and multi-factor authentication whenever possible, properly configure device settings, and install security software to protect their mobile and internet connected devices which are also under constant attacks from outside their homes.

Data Security Practices for Organizations

To avoid data breach incidents, organizations must establish data security policies and budgets, deploy the right technologies and technical resources, manage outsourcing vendors, and collect the minimum amount of data needed to conduct their business.

The Role of Government in Data Security and Privacy

Governments are responsible for protecting consumers and guiding companies by providing a legal framework to ensure that they are doing their part. As regulators around the world have taken an interest in privacy issues due to the rising data security threats and consequences of poor data protection practices, they have introduced many redundant and overlapping data security and privacy laws that organizations must comply with to protect customer data.

Conclusion

One of the major risks arising from poor data security management is the loss of privacy for consumers who use various online services, mobile devices, and internet connected appliances. Consumers of these digital services such as social media platforms are often unaware about the risks and consequences of their actions while excessively sharing personal data and lacking the knowledge about data security practices to protect themselves from identity theft, fraud, and disclosure of private information. Adequate computer or device security and password management must be on the top of the data security list.

Businesses also accept a great deal of responsibility when they collect consumer information as part of their business processes. There are several ways companies can collect, store, and share customer information responsibly to avoid creating unnecessary privacy concerns for their customers. They must avoid excessive collection of data that does not serve the business, allocate appropriate data security budget and resources, and be aware of the regulatory requirements.

It's in the best interest of both consumers and corporations to have adequate data security awareness and controls that protect personal information from unintended disclosure. By implementing balanced and measurable data security practices, companies can ensure they meet customer expectations of privacy and regulatory compliance.

Also, enforcement of data security regulations by various government authorities is important if we want to preserve privacy. A strict regulatory oversight and enforcement will align consumer expectations of privacy with a corporate data security governance and ethical business practice that protect consumers and businesses.

Internet users must make good choices when interacting online if they expect privacy, and businesses must take data security seriously to protect their business and customers. "Collective data security practices are necessary to meet consumer expectations of privacy and business obligations for protecting customer data. Data security is shared responsibility between consumers, device manufacturers, regulators, and businesses." Bagdasarian says.