In this digital economy, data is a vital asset, and businesses can’t survive without analyzing it. Businesses collect, process, and analyze data to understand their customers better, deliver better products, and fine-tune their operational strategies. Today, organizations collect and generate a remarkable amount of data every day, as access to data is particularly crucial to businesses.
As crucial as it is, collecting and using data also entails several concerns about privacy and security. With regulations governing the use of data by businesses and compliance requirements on the rise, this is a good time for companies to start measuring data privacy risks. Having good visibility and openness in relation to privacy risks can help avoid expensive privacy breaches, maintain a good reputation, and ensure compliance.
Factors affecting data privacy risks and consequences
To mitigate data privacy risks, companies must first look at the factors that can affect data privacy. With a better understanding of the factors governing the use of data and the inherent privacy risks, businesses can move towards better data privacy with smartness and insight.
Exponential data growth – Over the last decade, there has been an exponential growth of data. As more people around the world have adopted smartphones, the Internet, and social networks, the amount of data generated per day has become truly massive. Additionally, the advent of IoT devices has also enhanced the growth. With this overwhelming volume of data, maintaining data privacy and dealing with personally identifiable information has consequently become a lot more complicated.
Increasing data complexity – Along with the exponential growth in the volume of data, there has also been a parallel increase in data variety and complexity. The data variety has stemmed from different devices, technologies, and formats such as video, audio, and even photos that people use to communicate. Data complexity levels will continue to climb and make dealing with privacy issues more difficult over time.
Compliance and regulation – Keeping in mind the sheer volume of data that businesses handle and the numerous vulnerabilities and privacy risks that can arise, the regulatory landscape has also changed significantly. Many privacy regulations, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), have come to the fore on national and international levels. These laws regulate the collection, storage, and handling of personal information by businesses.
Growing data breaches – As a result of the increasing number of very public data breaches in recent times, companies and the general public are more aware of data security and privacy. Companies are investing in data security and it has become a topic at boardroom level. However, companies are struggling to contain breaches as the data security threat continues to grow in frequency and sophistication.
Cost of privacy violations and breaches – With the regulations in place, privacy violations can result in severe regulatory penalties. Companies can lose millions of dollars due to data breaches and other privacy violations. Businesses that have had to bear the brunt of these breaches have already suffered tremendous loss of finances, reputation, and brand perception.
Overall, these factors indicate that businesses need to sit up and take notice, have a concrete plan of action and a budget to handle data privacy, and invest in data privacy best practices in the future.
Focusing on data use
The GDPR can be an excellent place to find a data privacy baseline that businesses can use as a starting point. However, it is essential to look beyond GDPR compliance if you are looking to create streamlined customer experiences, more efficient business practices, enhanced brand perception, and resilient customer loyalty. Getting out of the “bare minimum” mentality can quickly reinforce your data privacy strategies.
A great example is the case of data mapping. The process of data mapping can give businesses a clear picture of the data they have in store. Data mapping is an integral part of GDPR compliance, and a lot of companies go forward with the idea that mapping their data is sufficient to identify data privacy concerns. While data mapping can give you an overall view of your data and help in creating sound data management practices, it can be an inefficient and ineffective way to look for privacy issues.
The crux of the matter is to focus on monitoring data use. Most compliance violations result from incorrectly using data. It is only through focusing on data use that businesses can find the right balance between an efficient workflow and correct identification of high-risk data privacy breaches.
To accurately assess and address data privacy risks, you need to formulate a plan that focuses on data use, monitors data use in different ways, identifies and quantifies the risk factors, and then mitigates them. The importance of such a system cannot be overstated, as data privacy concerns are becoming increasingly complex and expensive.
Creating a plan of action
Here is a general step-by-step approach to monitoring data privacy issues comprehensively:
Setting baselines and monitoring – To create a system that monitors data use to identify potential privacy pain points, you need to establish a baseline that identifies specific data assets that hold personal data and can directly cause privacy breaches. By defining the particular portions of data that can be vulnerable, you can start with a concrete idea of what to monitor. Baselining helps teams to identify use cases that have inherent privacy risks that you can then deal with appropriately.
Measuring – Keeping in mind the variance, complexity, and volume of data that your business would have to deal with, you must quantify risks and vulnerabilities. Putting a concrete number on these risks can then make it easier to put plans in place to deal with these risks and prioritize your efforts to address the highest risks first. Several models of analysis can be used to create a measurement standard that gives you a clear picture.
Prioritizing – The most sensible approach to handling data privacy risks is to take a top-down approach where you fix the most serious risks first. Prioritization of your risks can be accomplished easier if you assign a risk score to every risk or vulnerability in the measurement phase. Proper measurement can lead to a clear and optimized strategy that allows you to focus on the most severe issues. By addressing critical risks, you can change your risk profile quickly.
Expanding – Once you have a system in place to prioritize higher risk factors, you can also use your risk scores, obtained during the measurement phase, to further expand and streamline the process of dealing with data privacy issues. For example, you can use the risk scores to monitor the privacy performance of specific departments and people inside the business. Having a scorecard allows you to further fine-tune your plans by identifying the areas of your business that represent the most risk. Such a measurement can improve accountability and establish a work culture that is aware of data privacy requirements in the modern world.
We can confidently expect that swift and smart handling of data privacy risks will become much more critical to businesses over time. With more and more public data breaches and privacy violations coming to light and regulatory bodies poised to enlarge the scope of regulation, risk scoring can be an excellent strategy to focus on measuring data privacy risks and implementing the right mitigation strategies. Protecting privacy can help businesses avoid expensive fines and ensure continued building of trust and loyalty. By building a brand around the customer, showing trust can gain you a distinct advantage in competitive markets.