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What Is data privacy

Learn more about what is data privacy, and the importance of complying with data privacy regulations.
Read time
6 min read
Published
October 3, 2022
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These days, questions about data privacy are among the most common in the technological sphere. These questions are of critical importance: It is only through protecting consumer data privacy and enhancing data protection and privacy that businesses can exchange information and do business with customers. Protecting data privacy allows individuals to ensure that they can trust businesses with their critical information. To that end, companies must learn what data privacy is and how it can be enhanced.

Data privacy is all about the protection of critical information. It refers to systems, technology, laws, and procedures that regulate how information is protected or distributed. The information protected via data privacy laws and rules can be extremely personal and include identifying characteristics or other sensitive information. This information can include addresses, medical records, financial information, and more.

However, data privacy is not just personal information. It also applies to business. After all, all businesses will want to ensure the protection and privacy of their critical intellectual property, including marketing campaigns, research, long-term strategies, and more. 

Both personal and business data privacy take on very different procedures. Individuals often give their critical personal data to various entities throughout the day, even if they don't realize it. People may take great pains to cleanse their social networks of any inappropriate information but not realize that they are giving a multinational location their exact location at any given moment when they install an app. 

Data privacy typically involves multiple concerns. On the one hand, people should be entitled to understand, in plain English, who has access to what information. They should know who has what data and what they can do to limit the spread and transmission of that data. On the other hand, once this information becomes available to third parties (such as technological conglomerates or major businesses), governing how that information is used and regulated gets extraordinarily complicated. 

Data privacy has only risen in significance in today's digital age. As more and more transactions have become digital, a bad actor with access to sensitive personal information can enter into a series of financial transactions, post damaging information on the internet, or even commit certain cybercrimes. Unfortunately, most of us have had our most sensitive personal information potentially made available to the world, even if we haven't realized it.

These data privacy concerns are compounded by the reality of cybercrime, a growing issue consuming billions of dollars every year. Many multinational corporations - including Target, Sony, and Equifax - have seen information on their customers accessed by hackers. These issues gave hackers access to billions of personal information and caused massive damage to the impacted companies. These issues sometimes occurred because these businesses failed to secure their computer networks. In other cases, even the best protections could not stop these crimes. However, there were significant data privacy implications:

  • When did the companies have to inform the impacted customers?
  • What sort of compensation was owed to those impacted?
  • What actions did the businesses need to take to better protect their computer networks in the future?

Data Privacy Example

The best way to explain the connection between data protection and privacy laws is to use data privacy examples. These examples should be able to answer and discuss data privacy examples in business and how a data privacy policy example can better help businesses learn to protect financial information.

Looking for an example of data privacy issues and how those can impact you personally? Consider sensitive medical information. If you have ever visited a doctor, hospital, or healthcare facility, these facilities have noted you and your medical history. These issues contain personal information, records, physical examination notes, etc. These notes have legitimate medical purposes and are necessary to facilitate the provision of medical care. However, you would never want any unauthorized individual access to your most personal records, and you would want to know that these records were only ever accessed for a legitimate purpose related to your healthcare. 

In this case, data privacy concerns are addressed comprehensively. The Health Insurance Portability and Accountability Act (HIPAA) is in the United States. HIPPA is a deeply comprehensive law that addresses health care records. At its core, it limits who can access what medical information, setting the strictest standards for who can access an individual's medical files and regulating data platforms that can access these files. In a sense, HIPAA is the ultimate in privacy laws, as it regulates who can access our most sensitive information while also laying out penalties for those who violate HIPAA regulations.

There are also consumer privacy laws. These laws vary, but all revolve around the same core concept: How can a business use the data it receives from customers? Consumer privacy laws tend to revolve around the answers to certain questions, including:

  • How is information collected used, and who within an organization has access to information?
  • Can the information be sold to third parties? If that happens, does a consumer have the right to have their information removed from a sale? 
  • If there is a data breach, when will a consumer be made aware, and how will that consumer be compensated for any potential financial loss that occurs as a direct result of a data breach?

Different states and the federal government have consumer privacy laws meant to create a level playing field for all businesses and ensure that consumers know their information is protected. 

These questions have massive ramifications on data privacy and information technology designed to protect individuals' personal information. These policies are often internal and external. In other words, businesses will need to create policies that govern the internal sharing of data, then work to ensure that their customers are made aware of these policies and demonstrate to customers how they are adhered to. 

Adhering to data privacy policies can be a massive challenge for many businesses. It often requires extended coordination between staff, third-party vendors, millions of pieces of data, and more. As such, additional programs - like Ketch - can often provide invaluable assistance. 

Data Privacy Protection

Simply put, the importance of data privacy compliance and data privacy regulations cannot be understated. By having a robust data privacy framework and data privacy policy, businesses can rest assured that they are doing everything they can to find solutions to data privacy problems.

Let's look again at some examples of massive data scandals and privacy violations over time. In each case, the businesses lost billions in revenue and suffered major reputational damage. Consumers won't do business with a company if they are worried that the company in question won't be able to protect their data. 

However, the above examples pertained to larger businesses with the resources and expertise to withstand major hits. That's not always the case. According to the U.S. National Cyber Security Alliance, 60% of all small businesses that suffer from a cyber attack wind up going out of business within a year. In other words, loss of data privacy can potentially be fatal to smaller businesses. 

Fortunately, your business is not powerless in the face of challenges to data privacy protection, and there are many actions you can take to ensure that you are protecting your customer's data and limiting the risk brought by hackers. These include:

  • Training: You must regularly train your staff on how to protect the data of your customers. As such, you need to train your staff in how to recognize cyberattacks, how to handle customer data, and what all relevant policies and procedures are.
  • Policies: All of the training in the world won't mean anything if your business fails to create policies necessary to protect your business' data. As such, your business must create specific rules and policies that govern how data is managed, who has access to data, and what expectations your business has regarding customer privacy. 
  • Third-party vendors: In many cases, outside assistance from third-party vendors can be critical in ensuring that your business protects the data of your customers. Third-party vendors, such as Ketch, can assist with various functions. This includes helping create customized privacy policies, automating requests for additional data, capturing and managing your customers' marketing preferences, adhering to relevant data privacy laws, and more.
  • Encryption: Encryption is a process by which data is given additional protection and made more complicated for an unauthorized actor to access. By encrypting your data, you add a layer of protection to it, thus providing additional assurance that an unauthorized user cannot access your customer's data. Encrypting your data can be expensive and time-consuming, as it requires a level of expertise with computer security systems that can be complicated. That being said, the process is well worth it: In many cases, a privacy or security failure directly results from a failure to encrypt critical data. 

As you no doubt understand, building trust and adhering to complex regulations in data privacy can be complicated and confusing. At Ketch, we're here to help. We offer a robust array of privacy operations meant to help you steer through complex privacy controls and ensure you can build faith and trust with your customers. Ready to learn more? Contact us today.

Read time
6 min read
Published
October 3, 2022
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