January 28 is Data Privacy Day, a global effort that generates awareness about the importance of data privacy. Data privacy protection can inspire consumer trust, meet legal and compliance requirements, and avoid costly breaches – all of which are good for business.
Today’s consumers want control over their information. They also believe that companies, not government, are best equipped to protect them when it comes to data privacy. A loss of confidence will drive customers directly into the arms of your competitors. In fact, 87% of consumers say they will take their business elsewhere if they don’t trust a company is handling their data responsibly (PWC).
To inspire trust, be open about how you collect, use and share personal information. Only process or share data in a way that is compatible with the purpose declared when it was collected. Give customers a choice by allowing them to opt out of the collection, use, or transfer of their data. If you are transferring data to a third party, let consumers know that. Give individuals access to the data you collect on them, the ability to fix it if it is wrong, and the right to remove their personal data from the system if they so choose.
Meet Legal and Compliance Requirements
Your company may be subject to legal and compliance requirements around data privacy. At the Federal level the most common ones involve healthcare information (HIPAA), children (COPPA) and financial data (GLB). Some states, such as California, have enacted their own laws to protect consumer privacy. If you’re doing business with individuals from the EU, you will need to follow Europe’s General Data Protection Regulation (GDPR).
Failure to comply with regulations can result in hefty penalties. In 2020, European enforcement agencies levied major fines against more than 18 companies for failure to comply with GDPR. One of these was a fine of 35,258,708€ against retailer H&M for an internal breach which disclosed employees’ private data such as religious beliefs and medical information. This fine demonstrates that internal breaches are being treated as seriously as consumer privacy violations.
Avoid Costly Breaches and Data Theft
If you collect it you must protect it. Take measures to protect personal information from loss, misuse, unauthorized access, disclosure, and other risks. Data breaches often result in downtime which translates to lost business. There are also the costs of getting your systems secured and running again.
The individuals whose data is compromised by the breach are at risk of stolen identities, monetary theft, public embarrassment, or ransomware. Your company will have to cover the costs of notifying the affected individuals and providing remediation such as credit monitoring to regain their trust. Depending on how the breach occurred, there could also be an HR cost associated with removing or replacing the employees responsible.
Keep Data Privacy in Mind Every Day
The need for data privacy goes beyond just January 28th. Consumers are looking to businesses to be better stewards of their private information. In response, governments have enacted regulations that mandate data privacy. Major companies are also onboard. For example, Apple is expected to roll out mandatory privacy consent requirements in early 2021 which could result in the removal of apps conducting tracking without full privacy consent.
Research shows that privacy is an important part of a company’s brand. Transparent and honest data privacy practices can increase customer loyalty. They can also help you avoid legal penalties and costly data breaches. That is why data privacy is good for business.