5 Reasons Why Data Privacy is Essential for Businesses

5 Reasons Why Data Privacy is Essential for Businesses

Modern businesses require various forms of data from different sources to operate successfully. The data can be from customers and employees. It can also be information about the company’s products and services. The practices that ensure these data are used for the intended purposes are called Data Privacy. 

Data breaches are disastrous for a business’s growth and reputation. Therefore, businesses have to operate with strong security safeguards for the data they use. These data protection practices must be integral to business practices for many reasons. Some of the reasons are discussed below. 

  1. To Prevent Data Breaches 

Business data are prime targets of malicious agents. They often attack companies’ databases to steal these data, sell them, or demand ransom in exchange for stolen data. Poor data privacy practices make a company susceptible to these attacks. 

To prevent data breaches from happening, businesses have to institute strong data privacy practices, but there are no certainties. However, the impact will be minimal because your business already has protocols to keep its effects at bay.

  1. To Avoid Unwanted Expenses 

Data breaches cost a business a lot of money. IBM and the Ponemon Institute reported data breaches to cost nearly $4 million globally.  These high costs of data breaches are typically the result of various actions that a company may be required to take following a data breach. Some of these actions include: 

  • Investing in new security mechanisms 
  • Paying for an investigation to determine how the breach occurred
  • Settling legal issues
  • Compensation for customers who took legal action

Also, violation of data regulations in various countries attracts heavy fines. For example, when businesses violate the European Union’s GDPR (General Data Protection Regulation), they could pay up to four percent of their global turnover in fines. 

  1. To Satisfy Customers’ Needs 

Consumers will do everything they can to keep their data safe. According to the 2019 Cisco Consumer Privacy Survey, 3 in every 10 persons have taken actions to ensure their privacy. 

Internet users are increasingly using anti-detect browsers instead of common browsers. This is because of increasing awareness of how user data is mined on the internet.  An online business must be aware of this and be proactive with the way it deals with these different forms of user data like browsing metadata, browser fingerprints, location data, and others that it gets from its users. 

Successful businesses today have proved themselves worthy of their customers’ trust. They have consistently demonstrated that their customers’ needs are important to them. 

  1. To Maintain Business Reputation

Maintaining a business’s reputation is the ethics by which its operations are run. Your business’s ethics should make it clear that customers’ data can only be used for the purposes it was intended. 

The data should not be used in any way that harms the customer. Also, these kinds of company cultures demonstrate trustworthiness and motivate employees to increase productivity levels.

Data privacy is more than a protective measure. It is strategic leverage your business can utilize to woo more customers to use your products. Small and large businesses can use this tactic to remain competitive and win the appeal of potential customers. A brand that has a bad reputation for data breaches and security leaks will lack a competitive advantage. 

  1. To Prevent Operational Downtime

A data breach will cause some or all parts of a business operation to stall, depending on the extent of the breach. This downtime will be used to investigate the cause, effects, and extent of the breach. 

In the end, these downtimes will cost the business revenue that was not realized during that period.

In order to prevent this from happening, your business will need to implement strong security protocols and data protection practices.

In Conclusion

The importance of data privacy practices to a business’s growth and success in the 21st century cannot be overstated. If you want your business to thrive, you have to make it a core business practice. 

Author Bio: Paul Cawthon

Paul has been passionate about content writing since 2010. During his career he has managed to accumulate a lot of experience in covering various fields, while focusing on cyber security and technical writing. Paul has always been fond of technology and the digital world, thus, conducting in-depth research and learning what’s happening around is a major part of his everyday life. Currently, he is a content director at Incogniton, where he enjoys helping the staff to better their skills and come up with catchy and useful content for the audience.