As more and more businesses jump into the digital transformation bandwagon by leveraging cutting-edge tools and technologies, data security and privacy challenges have also increased.
Even though customer privacy and security may seem interchangeable to most of us, both are distinctly separate yet interrelated concepts. And knowing the exact difference between the two is undoubtedly the need of the hour since data security and privacy laws, including the GDPR and CCPA, are becoming more stringent.
But what does it mean if a business isn’t considering maintaining compliance with these laws? Ignoring these laws/compliances could make organizations vulnerable to lawsuits and hefty fines.
Since every business collects heaps of customer data, it becomes their responsibility to manage and store sensitive customer data securely. Let’s uncover the aspects of security and privacy in the modern digital world and understand what businesses need to gear up for.
Understanding the Difference Between Data Security and Privacy
When we talk about data privacy, it’s all about ensuring fair use of personal data by offering individual control over how their data is collected, used, or shared.
However, data security, conversely, ensures data security from unauthorized access. This means sensitive data is secured in a way that only authorized people can access the same.
However, organizations must ensure data security and privacy while collecting user information. Otherwise, they have to face several issues related to non-compliance.
Data Security and Privacy Compliances
Since customers are now aware of the way brands use their personal information, they always prefer relying on trusted enterprises that offer adequate security and privacy.
In a nutshell, customers cannot trust you if your business isn’t complying with global data protection and privacy regulations. These regulations are formed to ensure every bit of customer information is collected, stored, and managed securely. Also, it’s crucial for businesses to re-assure that they have consent from the customer end before they can collect personal information to use further to improve their overall business. Failing to meet the data protection and privacy requirements, enterprises could be entitled to hefty fines and lawsuits, leading to substantial financial losses.
On the other hand, a challenge in managing customers’ sensitive personal data could further put businesses at risk, since cybercriminals are always on the hunt for compromised customer details that can be sold on the dark web for financial benefits.
Once an organization falls prey to a cyberattack, it can lose millions of dollars and eventually tarnish its reputation in the global market. Hence, businesses must adhere to various regulations to ensure the highest level of customer trust and to avoid fines.
The Rapid Adoption of Data Localization
Besides data privacy and security compliances, the rapid adoption of data localization has increased the challenges for businesses expanding their global reach.
Data localization refers to the practice of keeping the data within the geographic boundaries it originated from. For instance, if an enterprise collects user data from customers living in the U.S., the physical storage of the data shouldn’t cross U.S. boundaries and must be stored locally.
Around the world, 75% of countries have already implemented some data localization regulations. And the significant implications include data governance, IT footprints, and data architectures.
While localization rules generally prevent cybercrimes, including customer identity theft or privacy concerns, success also has much to do with how businesses store and manage sensitive data.
Enterprises that fail to comply with data localization standards may lose potential customers in a particular country or state – and may eventually have a limited area to expand their business in the upcoming years.
The Competitive Advantages of Data Privacy and Security
Besides the regulators that consider data privacy and security seriously, consumers are now more informed and expect their sensitive data to be handled seriously.
Undoubtedly, digital trust is a serious concern, and brands that can build customer trust shouldn’t forget the crucial role of consumer trust based on data handling.
Thus, organizations that address the issues related to data privacy and security have significant competitive advantages in various areas, including:
- Optimized Customer Experience: Organizations can offer personalized customer journeys and provide suggestions based on customer preferences and behavior. This results in more lead generation and enhanced conversion rates since customers rely on a brand that correctly utilizes their data.
- Better Customer Retention Rates: Since data privacy and security undoubtedly increase your customer base, they also ensure you retain your loyal customers and prevent switching. Customers love to stay for a long time with a brand that offers robust security and is continuously on the path of innovation and adaptation when it comes to customer data privacy and security.
- Global Market Repute: While poor data privacy and security practices may tarnish your brand reputation, invoking the true potential of the same could help build a globally admired brand. Businesses that adhere to several data security and privacy compliances are gaining more attention globally.
The data privacy and security landscape is evolving rapidly, and businesses need to understand its importance and put their best foot forward in adopting the necessary regulations.
Businesses that aren’t taking customer data privacy and security seriously will lag behind their competitors in the upcoming years and eventually face severe consequences.