In today’s era of information, data is everything. Data helps you make money and data help you strategize. Data helps understand the customers and customize the services and products so that it suits them. This is where data makes money. To preserve the essence of data, its protection becomes important. Data not only helps in monetization but protected data ensures the trust of consumers. But why do the protection and privacy of data become very important to all companies? From behemoths like Google and Meta to small and emerging companies. This article aims to discuss the same. Following are some reasons why companies should invest more in the protection and privacy of data.
A robust data protection regime brings with it the trust of consumers and goodwill. In Europe where The General Data Protection Regulation (GDPR) rules data privacy, having strong data protection becomes a differentiator. EU Organisations mostly prefer GDPR-compliant organizations, which gives them a competitive edge over others that don’t. This competitive advantage brings with it more market share. Regulations have prompted many businesses to undergo digital metamorphosis, which has enhanced their data quality and overall consumer experience. Regulation may have a good economic impact. Additionally, businesses are enduring advantages of GDPR compliance businesses as maximum effectiveness, increased client satisfaction, enhanced risk-taking, better data quality, improved marketing, and increased security. This is discerned from the fact that the portion of organizations claiming that data privacy has improved their businesses significantly has increased from 40% in 2019 to 70% in 2020. Competitive advantage is accrued by a better brand name due to sturdy protection levels. Consumers in the retailing industry might be capricious and are frequently willing to change vendors because of data protection worries.
A data breach is an extra costly affair. This is conspicuous from IBM’s annual “Cost of a Data Breach” report which tells us that the average cost of a data breach is $4.24 million. The report has also observed that this amount is increasing yearly, which indicates that the importance of data protection is increasing day by day. But why does a data breach cost so much? Firstly, it is important to note that there are heavy regulatory fines imposed for breaches or non-compliance in data protection by regulatory frameworks, like the GDPR, which imposes monetary penalties of up to 20 million euros or 4% of the company’s global annual revenue from the previous year, whichever is higher. Secondly, taking the appropriate steps after a breach, such as looking into and addressing the infringement cause, alerting and compensating possible victims, or considering legal action, is neither cheap nor simple. Compliance problems can persist even after a leak has been entirely remedied and the vulnerabilities closed. Other than this ancillary costs may be as high as the ransom demanded by the ransomware attacker. Another valid question that arises is how is a data leak averted by privacy protection and compliance. Privacy regulations prescribe constraints for who may and should access which data, what time and why, whilst cybersecurity technologies offer the actual defense against a cyber attack.
Other than the above-mentioned advantages of following data privacy protection measures, companies can make the most out of the data. Companies usually go through a “data mapping” or “data discovery” process to determine what data they have in the early stages of implementing a privacy program or addressing local legislation. They gain insights into consumer behavior or from other corporate data they already have access to during this step, offering more real-time, relevant insights from the already-existing data assets. Data privacy may both create insightful information from already-existing data and result in more effective and efficient use of that data. By ensuring that staff members are utilizing customer data responsibly, a privacy program also lowers the risk associated with its use. Organizations can reduce the forms of obstacles that a less privacy-mature firm otherwise might suffer by establishing clear privacy policies and established processes for managing complicated privacy concerns.
Having well-framed privacy policies can aid in attracting funding. Investors tend to be warier than before and would like to understand specifically what corporations are doing to safeguard the business against this impending threat in light of the several high-profile data breaches that have happened in recent years, like the Marriott International breach, and Yahoo data breach among others. This is true in all sectors and locations. A business that is susceptible to a data breach of major dimensions is less appealing to investors. Thus, data protection becomes imperative for companies to woo investors.
Consumers are considered Gods by business houses, consumers make the business run. If the consumer is happy and satisfied the company grows. Research suggests that consumers value privacy. Cisco’s survey suggests that 84% of the respondents care about their data privacy and want more control over how their data is being used by the company. Of the sample, around 80% were eager to take action for their data privacy and 48% were ready to switch companies if better data protection was provided.
From the above-mentioned points, it is clear that to survive in the market with ease and consumer support it is necessary to have a stringent data protection system and privacy. As the old age adage says, “prevention is better than cure”, it is highly advisable for business behemoths as well as normal companies to invest in the same and experience the fruit from the investment.