Data Privacy Regulations: The Impact on Business
In this digital age, data is a valuable resource. From private information on social media to financial records, the more data available on an individual, the more valuable it becomes. The increased use of smart devices and online accounts has given companies easier access to personal information, with people sharing more personal data than ever before.
As data becomes more valuable to businesses, it is also becoming more of a concern for consumers. In fact, 81% of customers reported that the risk of data collection by businesses outweighs the potential advantages in a recent survey. There are both positive and negative aspects of data collection, and with increasing government regulations, the landscape changes regularly.
The General Data Protection Regulation (GDPR) legislation is now a part of all EU and EEA privacy laws. It applies to any firms selling to or keeping personal data on Europeans, including those outside Europe. The GDPR gives EU and EEA nationals more control over their personal data and reassurance that their data is safe throughout Europe.
The GDPR defines personal data as information that identifies a person, such as a name, a picture, an email address, bank details, status updates on social media sites, location data, medical data, or a computer IP address. Thus, personal data on individuals in their private, public, or work roles are all a part of the GDPR legislation.
Though GDPR is specifically for the EU, it has created a ripple effect in other countries including Canada. According to Gartner, over half of the planet’s population will have their personal information protected by local privacy legislation aligned with the GDPR by 2023. These new regulations and the growing consumer concern with data privacy continue to impact businesses in huge ways. In this article we discuss four major trends caused by these new data privacy laws.
1. Reduction in Data Collection
Most for-profit businesses gather and store data in order to develop their company and better understand their target market. Unfortunately, the countless data breaches in 2020 have proven that storing data can be a big liability. Globally, businesses are becoming more conscious of the risks associated with excessive data collection, whether it be consumer or staff data. As a result, they are starting to revise consumer and staff data collection procedures. In some cases, companies have decided to only retain critical data to limit possible exposure and liability concerns.
2. Risk Management for Third-Parties
Looking towards the future, businesses will heavily emphasize third-party risk management, risk assessment, and compliance. New requirements under GDPR include contractual safeguards, sufficient data protection, and proof of compliance. This means that organizations will have to spend more time evaluating third-party partners to protect themselves from possible threats.
Rather than using third-party data processors, IoT firms are opting to keep everything in-house to avoid stolen data. This isn’t surprising given the dangers connected with sharing data outside of a business. Businesses have limited control over how third-party organizations deal with data and privacy. It’s very difficult to ensure that a third-party is compliant with regulations. In fact, Gartner research has found that compliance programs are more focused on third-party risk now more than ever.
3. A Shift in Roles and Reporting
Companies will inevitably depend on internal privacy managers as more privacy, and data-related rules and regulations are implemented. In terms of data collecting, Chief Data Officers (CDOs), data scientists, and privacy executives will be vital in keeping organizations compliant. According to a study, in 2022, over one million enterprises will have employed a privacy officer (or data protection officer).
4. Larger Focus on Ransomware Prevention
While most data security strategies emphasize ensuring data confidentiality, integrity, and availability— ransomware is also a significant factor. In its 2020 Cyber Front Lines report, cybersecurity firm CrowdStrike discovered that ransomware was used in almost two-thirds of the financially driven breaches it analyzed. As a result, business organizations are now putting considerable effort into implementing better security mechanisms to identify and stop breaches before critical data is lost or taken.
Building Trust through Data Privacy
According to PwC, 88% of customers reported that their eagerness to share personal information was dependent on company trust. This statistic reflects the impact that data privacy has on business operations.
While there are many new regulations and standards in data privacy, they mostly follow these guidelines:
- Organizations should alert consumers about data collection, processing, and sharing.
- Customers should be able to request access to their personal data at any time.
- Companies shouldn’t collect data without consent.
- Customers should be able to request that their personal data be removed.
- Consumers should be able to fix personal data mistakes.
- Organizations should protect personal data with data security solutions.
After implementing the above guidelines businesses are still able to understand their customer’s needs. They can also still send extremely relevant and engaging customized messages via sophisticated audience-based marketing. As a result, many businesses are embracing the changes brought on by increasing data privacy and are implementing strategies to reduce potential liabilities. This they hope will allow them to build trust, and stay ahead of the curve by implementing solutions and systems that enable the use of consumer data while being transparent.
In the changing landscape of data privacy, it has become very crucial that businesses implement strong security to protect the data they collect. When it comes to data security, business organizations can rely on Outsource IT. We have years of experience securing and shielding critical business data for our many clients across various industries. Contact an Outsource IT account manager today to learn more about Business IT Security.