August 5th, 2019 by admin
Data breaches have been dominating headlines in recent years. The recent Equifax Data Breach Settlement returned that scandal to public focus, reminding people of the necessity for data privacy.
Data privacy isn't just something that big businesses need to worry about, either. 43% of cyber attacks are targeted at small businesses. 60% of those small businesses will go out of business in the six months following a cyber attack.
But what is data privacy? We're going to delve into this emerging tech trend and help you understand why it's important.
What Is Data Privacy? (And Why Is It Important?)
Data privacy is the act of ensuring how sensitive information should be handled, depending on its importance. One example would be someone's name. You don't think much about giving out your name, as there's not much risk associated with.
Think about opening up a new bank account, however. The additional information after your name is going to be more sensitive. You need to make sure that information is secure.
Data privacy is becoming increasingly important as the internet continues to become more intertwined with our daily lives. With the rise in high profile data breaches in recent years, we're seeing increasing federal regulation around data privacy and data security.
Several legal actions and rulings have emerged in the wake of these data breaches. The Health Insurance Portability and Accountability Act (HIPAA) and Children’s Online Privacy Protection Rule (COPPA) both offer consumers the right to see the data that's been collected about them. They can also request the deletion of certain sensitive data.
Certain states have their own rules and regulations about data privacy, as well. Each company is likely to have their own policies about data privacy. As you can see, answering the question "What is data privacy?" is an involved and nuanced conversation.
It's also an important one, as we continue to increasingly evolve into a digital economy.
Why Data Privacy Is Important
We produce a staggering amount of data every day. Approximately 2.5 quintillion bytes of data are generated on the internet daily. This is only going to get more extreme as we continue to see a rise in connectivity and smart objects, such as the Internet of Things (IoT).
With that much data being generated, it makes sense that we'd need to take steps to make sure some of it is secure.
Data Privacy Limits Power
Knowledge is power, as the saying goes. The more that someone knows about you, the more they're able to impact your life. Data privacy helps restrict unauthorized parties to have that kind of influence over your life.
Unethical use of personal data isn't restricted to cyber-criminals, either. Think about a company selling your personal information to a third-party company for marketing purposes, for instance. It's even starting to have political implications, as was revealed during the Cambridge Analytica data breach.
Data privacy ensures that only the right parties are able to access a consumer's personal data.
Data Privacy Is About Respect
We've never lived in a more customer-centric time. Word-of-mouth recommendations and brand loyalty are two of the most important facets of a company's continued success.
Data privacy ensures that a consumer's data is being used in the way it's intended. This means they can trust your company, increasing brand loyalty and the likelihood of word-of-mouth recommendations.
Data Privacy Protects Consumers
Governments have been ratcheting up security and regulations around data privacy in the wake of widespread data breaches. This means business owners need to ramp up their data security to comply with government regulations. If they don't, there could be consequences.
This is good news for consumers, of course. Before the increased focus on digital security, many organizations were surprisingly lax about securing some of their data.
Consider the fact that 962,947,023 digital attacks were blocked in Q2 of 2018 alone, from 187 different countries. Each one of those data breaches could have had disastrous consequences for the consumer or end user had the security not been in place.
Data Privacy Preserves Brand Value
46% of companies experience damage to their reputation and brand loyalty in the wake of a digital breach. Companies that make it clear they're putting energy and attention into protecting their customer's data is going to leave them with a favorable feeling towards the brand.
Data Privacy Strengthens and Grows Businesses
93% of Americans feel that it's important for them to have control over who can gather information about them. 90% feel that it's important to have control over what data's being collected about them. Brands that put energy and attention towards will pull ahead of their competitors, as customers rewards them with more brand trust and loyalty.
It’s the Right Thing to Do
Most organizations have some form of ethics statement in place. Even if there's no formal statement, there is usually an unspoken agreement to abide by ethical practices. The idea that data will be used for the purpose it's intended is a cornerstone of ethical business practices whether it's explicitly stated or not.
The most extreme example would be selling personal data to a third-party company as we've mentioned above. Customers might be turned off if they discover you're using their personal data for your own marketing purposes. Think how they may feel if they discovered you actively sold out their data for a profit.
Negative press and bad reviews can have disastrous consequences for a business. They can also spread more quickly than you might imagine. Put data privacy practices into place now, preventing any potential infractions rather than trying to repair the damage to your brand's reputation after the fact.
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