In May 2023, a Russian ransomware called Clop pulled off one of the biggest data breaches of the year. The ransomware exploited a zero-day vulnerability in MOVEit, an enterprise-level file transfer software, affecting 2,000 organizations. This included sensitive data from public agencies like the California Public Employees’ Retirement System (CalPERS), healthcare institutions, British Airways, and BBC.
The attack put 62 million people at risk by exposing personally identifiable information in the open. It was a devastating data breach that resulted from the mishandling of data. But the incident, coupled with other similar cybersecurity breaches, was an indication of the current, sorry state of data privacy.
So, what’s the importance of data privacy, legal responsibilities, and compliance requirements in the context of a vulnerable data economy? Let’s find out.
Data privacy is a big deal, here’s why
Data is the most valuable currency of the century. If your customers or voters trust you with their personal data, you owe them more than just an assurance of data protection. You must protect the data privacy of your customers.
After all, even a small mistake on your part can expose them to identity theft, financial losses, socio-cultural biases, personal attacks, and more. These are all serious offenses that can debilitatingly impact someone’s life.
You may not feel morally obligated to consider the repercussions of a data privacy breach, but you should consider it. When data privacy is jeopardized, it affects the health of your business or organization, too.
Truth be told, a predominant data economy is inherently susceptible to cybersecurity threats. Even the most ethical business with best-in-class data security measures is not entirely safe from potential privacy breaches.
But more importantly, when sensitive content is mishandled, it causes reputational damage to your business or organization. Lost customer trust is hard to regain, especially when it comes to information privacy.
You will bear revenue loss and may even have to pay thousands of dollars to mitigate the situation. There have been multiple such instances in the past decade. Uber was charged $148 million (2018) in a data breach fine, while T-Mobile paid $350 million in compensation to customers in 2021.
Clearly, compromising data privacy is an expensive mistake.
Then, there are legal complications pertaining to regulatory requirements underlined in global data privacy protection laws. From the European Union’s (EU) General Data Protection Regulation (GDPR) to the U.S. government’s Federal Information Security Management Act (FISMA), there is a lot of legal ground to cover. Failing to meet such regulatory compliance will land you in legal trouble.
You may also have to pay every penny from your pockets. Amazon had to pay $877 million in fines for GDPR breaches in 2021. Although the details of the case were not publicly revealed, investigating authorities cited a lack of GDPR compliance.
So, you should at least review your data privacy regulations as a best practice.
Data privacy can pose an ethical dilemma
Because data ethics is subjective, the ethical considerations about the rightful use of customer data and related privacy laws vary from one governing body to another. Privacy policies in many countries may not be adequate for others.
This lack of a standardized benchmark for data ethics makes matters worse. Apart from a moral desire for proper data handling, not much stands in the way of lawmakers and businesses dealing with data privacy. Data is the most valuable commodity/resource at present, after all.
Therefore, you cannot discount the possibility of powerful forces locking horns to gain supremacy by wrongful use of data.
So, the data economy is rife with ethical, moral, and legal gray areas.
But at the end of the day, if you collect, store, or handle digital data, you know its enormous value. That alone should make you reconsider data privacy or revamp your privacy principles. It’s not just your business, employees, or customers who are at risk — you are, too.
It’s a house of cards, by no exaggeration. And the best way to futureproof yourself against external attackers or malicious insiders is to examine existing roadblocks.
Understanding the challenges to data privacy practices
Ensuring uninterrupted data privacy can be extremely complex because there are so many variables to consider. Naturally, it may be a challenging feat to achieve.
You may have to spar with the following vulnerabilities as far as data privacy is concerned:
A lack of awareness
They say knowledge is power, and any lack thereof can be your biggest undetected challenge to practicing data privacy. Since data privacy focuses on the rightful and informed use of digital data, data privacy compliance is non-negotiable.
That’s why a sound and updated knowledge of various data protection laws is so important to ensuring data privacy.
Laws like the California Consumer Privacy Act (CCPA) outline data usage guidelines and consumer rights in great detail. Non-compliance implies either a disregard for the privacy needs of your customers or fundamental problems in maintaining data privacy.
Lack of awareness or incomplete knowledge can even lead to human errors. Whether you are an employee or the organization, you must be well informed to safeguard data privacy.
Improper access control
However, being aware of data protection laws will not be helpful if you don’t have a standardized data privacy strategy. In the absence of data protection laws that govern the use of consumer data, anyone can access important accounts or enterprise data.
Such unregulated and unauthorized access threatens data privacy.
The shared cloud infrastructures you use for seamless cross-team functionality and remote work can fall prey to improper access control. Any internal or external stakeholder can access all your data from any geographical location or device. It lays the ground for the misuse of data.
Unregulated data collection, storage, and/or usage
Without standardized data privacy laws, different departments are free to collect, store, and use customer information per their preference. So, you lose visibility of your organization’s data-handling activities. It makes you vulnerable to data privacy risks because data collection and/or data storage is unsupervised.
Even if you have great intentions, one or more of these challenges can stand in the way of safeguarding data privacy.
Any privacy breach can trigger data security concerns and impact your overall data protection. That’s because data privacy, security, and protection may have disparate aspects, but they share a symbiotic relationship.
How you can ensure data privacy
As long as you’re willing to learn, adapt, and reboot your existing data privacy practices, the rightful use of data is achievable. Develop a culture of ethical data handling and focus on company-wide implementation.
Start with data anonymization
Companies like Google use this data processing technique to ensure personally identifiable information (PII) from users stays safe. In this practice, PII is either encrypted or removed from data sources. So, this data cannot be linked to the person whose information it is.
Generalization, perturbation, and pseudonymization are only three of the multiple ways of data anonymization.
If you want to ensure the maintenance of the data privacy of your employees and customers, data anonymization is a great place to start. Even if you collect and store customer data, you can use it without affecting data privacy.
The only thing you need to be cautious about is that true data anonymization is not reversible.
Practice consent management and data transparency
Inform your customers of how you intend to use the information they share with you. You could be collecting their financial data or any other highly confidential data for various reasons. Make it explicit in your privacy policies so that your customers are always aware.
Sound consent management also helps you stay compliant with data privacy laws.
Similarly, implementing data transparency practices that make information accessible and usable to all stakeholders can contribute to a better customer experience.
Implement zero-trust IT security architecture
Data privacy concerns arise from unauthorized access and wrongful use of data. That’s why a zero-trust IT framework where everyone attempting to access enterprise data is authenticated can prevent access control problems.
Adopting zero-trust practices can significantly reduce threats from malicious insiders. Your cloud provider can help you out with the implementation and execution.
Make sure that the changes you’re making are adaptable so that you can continue upgrading them whenever privacy breach concerns outgrow their utility.
Why you should rethink data privacy practices
When you prioritize data privacy, you become the safety blanket for your customers/users. Using customer data with their consent and transparency builds an ethical culture of digital data handling. It creates a relationship of trust between you and your customers that can contribute to your business success.
And in an increasingly vulnerable scenario plagued by cyber debt, data privacy becomes an assurance that differentiates you from your competitors.
How new age technologies can augment data privacy
Thankfully, where traditional data protection falls short, artificial intelligence (AI), machine learning (ML), and similar new-age technologies can help. These innovations can do everything from classifying sensitive information to data anonymization, threat detection, and more.
But you should make judicious use of technology so it does not become a hindrance instead of being an enabler.
Just remember that you cannot take data privacy for granted. Cultivate a culture of ethical data handling and let new-age tech guide you on your journey.
Get a glimpse into the future of business communication with digital natives.
Get the FREE report
