Why is Data Privacy important?

In today’s digital economy, data has become an incredibly important asset, and collecting and sharing data has become a herculean task for businesses to manage. As businesses collect growing amounts of information on their customers, those customers have begun to see the potential downsides to this data collection. For a business to safely and successfully take advantage of the data they’re collecting, they need to have safeguards in place to ensure data is under tight controls and its consumers aren’t subject to uninvited surveillance.?

The concept of data privacy is typically applied to critical personal information, also known as personally identifiable information (PII) and personal health information (PHI). This can include Social Security numbers, health, and medical records, financial data, including bank account and credit card numbers, and even basic, but still sensitive, information, such as full names, addresses, and birthdates.

For a business, data privacy goes beyond the PII of its employees and customers. It also includes the information that helps the company operate, whether it’s proprietary research and development data or financial information that shows how it’s spending and investing its money.

Data privacy is more important today than ever before, and businesses should be highly concerned with their data privacy policies and procedures as they are often at risk of unintentionally violating data privacy regulations because their security measures aren’t keeping up with the ever-evolving cyber risk landscape. ?

In this article, you will read about

What is data privacy?

Why is data privacy important?

What are the challenges of data privacy?

Tips to protect data privacy

Critical Best Practices for Ensuring Data Privacy

What is Data privacy?

Data privacy, also called information privacy, is an aspect of data protection that addresses the proper storage, access, retention, immutability, and security of sensitive data. There are two main aspects to data privacy. The first is access control. A big part of ensuring data privacy is determining who should have authorized access to the data and who shouldn't.

The second aspect of data privacy involves putting mechanisms into place that will prevent unauthorized access to the data. Data encryption prevents data from being read by anyone who does not have authorized access. Various data loss prevention features are designed to prevent unauthorized access, thereby ensuring data privacy.

For companies to keep the data and maintain the trust of their customers, they will have to demonstrate data privacy transparency by openly communicating how they process and manage data. This includes having:

Consent, where users must opt-in before their data is collected and shared.

A privacy policy, outlining what data is collected, the reasons for data collection and use, the length of time the data is kept, other parties involved, and where the data will go. This policy should be prominently displayed and easily accessible by users.?

Disclosure, where users will be informed about the privacy policy, as well as cookies and other functions that store and share data.?

Why is data privacy important?

The importance of data privacy is directly related to the business value of data. The evolving data economy is driving businesses of all sizes to collect and store more data from varied sources than ever before. Data is used for a range of business reasons, including the following:

• to identify customers, understand their needs, and provide goods and services to them
• to understand the business infrastructure, facilities, and human behaviors based on data from networks and devices
• to train machine learning and Artificial Intelligence (AI) systems
• to garner valuable information from databases and data sources; and
• to apply business analytics and provide customized products and services to customers

Data privacy is a discipline intended to keep data safe against improper access, theft, or loss. For businesses, unauthorized access to sensitive data can expose intellectual property, trade secrets, and confidential communications; it can also adversely affect the outcome of data analytics. The following are some of the reasons?why is data privacy so important for conducting business today.

• A breach of data may create a bad reputation for your business.

A data breach at a government agency can, for example, put top-secret information in the hands of an enemy state. A breach at a corporation can put proprietary data in the hands of a competitor. A breach at a school could put students’ PII in the hands of criminals who could commit identity theft. A breach at a hospital or doctor’s office can put PHI in the hands of those who might misuse it. When you comply with data privacy?measures then this decreases any business threats and also ensures that your business does not suffer from a revenue loss.

• Protects the privacy of your customers

A data breach can lead to important customer data getting stolen which in turn can be used by hackers to commit crimes such as credit card fraud or disruption of critical services.

• Improves your brand value with data privacy policies in place

If you wish to maintain the value of your brand, then following the right?data privacy standards?is non-negotiable. Consumers share their data such as personally identifiable information, taxation, bank details, credit card information, and insurance to businesses with the trust that the data will not get stolen. They want it to be well protected. If the information gets sold or stolen by a third party then the customers lose trust which in turn can lead to a decrease in the value of any brand. Brand reputation is one of the?benefits of data protection.

Data privacy lapses, also called data breaches, can seriously affect all parties involved. As far as individuals are concerned, those affected by a data breach may find improper financial and credit activity in their name, compromised social media accounts, and other issues. On the other hand, a business may face significant regulatory consequences, such as fines, lawsuits, and irreparable damage to its brand and reputation.

What are the challenges of data privacy?

Many businesses struggle to meet requirements posed by maintaining data privacy and deal with counter threats in an ever-changing regulatory and security landscape. Some of the biggest data privacy challenges include the following:

• Privacy is an afterthought. Data privacy should be treated as a fundamental business goal, with policies, training, tools, and IT infrastructure designed to meet privacy needs from the ground up.
• Lack of data visibility. Organizations should have a clear understanding of what is the context of data, its level of sensitivity, and where it's located.
• Humongous data. A business can be responsible for managing petabytes of data comprising various files, databases, and stores located across storage devices and cloud repositories. It's easy to lose track of data, allowing sensitive content to elude security, privacy, and retention guidance. A business must have the right tools and policies to manage enormous and growing data volumes.
• Less is better. Businesses are starting to understand retaining all data forever is expensive and presents storage, protection, attack, and legal discovery risks.
• Too many devices. Modern businesses must embrace remote access, wireless, bring-your-own-device, IoT, smart device, and other technologies. Data privacy in this complex environment demands strong access controls, comprehensive monitoring, and well-considered data governance policies.
• Too many regulations. Any given business may be subject to data privacy regulations at various levels, including federal, state, province, and industry.

Tips to protect data privacy

For businesses, privacy principles and guidelines are more extensive and complex, but they can include the following tactics:

• collect the minimum data required to accomplish a business task
• require strong authentication and MFA, such as user passwords or app credentials for APIs
• understand data sources, uses, and storage locations
• employ access monitoring and logging to track data access
• use encryption and other security technologies to protect data at rest and in motion
• back up data and test restoration
• ensure any third-party storage providers, such as cloud storage providers, share data privacy requirements and techniques
• train your employees, partners, and customers about data privacy guidelines.

A business must also contend with privacy legislation and regulatory issues related to data storage and retention. All data privacy guidance should include a thorough understanding of regulatory requirements.

Critical Best Practices for Ensuring Data Privacy

Creating policies for data privacy can be challenging but it’s not impossible. The following best practices can help you ensure that the policies you create are as effective as possible.

Inventory Your Data

Part of ensuring data privacy is understanding what data you have, how it is handled, and where it is stored. Your policies should define how this information is collected and acted upon. For example, you need to define how frequently data is scanned and how it is classified once located.

Your privacy policies should clearly outline what protections are needed for your various data privacy levels. Policies should also include processes for auditing protections to ensure that solutions are applied correctly.

Minimize Data Collection

Ensure that your policies dictate that only necessary data is collected. If you collect more than what you need, you increase your liability and can create an undue burden on your security teams. Minimizing your data collection can also help you save on bandwidth and storage.

Be Open with Your Users

Many users are aware of privacy concerns and are likely to appreciate transparency when it comes to how you’re using and storing data. Reflecting this, GDPR has made user consent a key aspect of data use and collection.

You can be sure to include users and their consent in your processes by designing privacy concerns into your interfaces. For example, having clear user notifications outlining when data is collected and why. You should also include options for users to modify or opt out of data collection.

Data privacy is one of the most challenging areas of IT security many businesses have to contend with. Find out more about how Rainbow Secure protects and secures your data with its world-class, patented, and innovative products such as a unique multi-factor Authentication solution, Single Sign-On, Encryption, Identity Access Management(IAM) with Threat detection and AI Monitoring, Secure Business Email, Multi-Factor Authentication(MFA) etc. To know more, contact us at [email protected] and schedule a call.