Small Business Brief

Technology & Software

Why Customer Data Privacy Is Extremely Important

Does your business handle a lot of customer data? If so, then you need to be aware of the changes in the world of privacy.

Most internet users think that they have lost control of their data and are concerned about their privacy. Businesses have failed to keep trust and are starting to pay for it.

If you aren’t convinced yet that the privacy of your customers is essential, then this post will change your mind.

Keep reading to learn what data privacy is and why it’s so essential today.

What Is Data Privacy?

As a business owner, you have a responsibility to your customers. They trust you by providing their personal information when they do business with you.

Data privacy is the act of protecting the data you collect on your customers. This data is anything that can identify an individual.

Some of the common types of information that you need to protect include health information, banking information, credit card numbers, addresses, phone numbers, and social security numbers.

If this information is exposed, it can cause problems for your customers. They can experience anything from spam to identity theft.

Why Focus on Privacy Now?

Privacy has always been a concern, but it hasn’t been until the last couple of years that it has been a significant talking point. Consumers have been through the wringer and want companies to start being accountable.

Here are a few things that happened that is making privacy a top concern.

The Government Is Passing New Laws

To answer the concerns of the people, governments are starting to pass strict privacy control laws.

These policies started in Europe with the introduction of GDPR. It’s a set of rules that businesses must follow that dictates how they handle consumer data.

GDPR requires businesses to have a strict set of privacy policies in place. It requires you to allow users to see what information you collect on them and requires a company to delete that data if a customer requests it.

Similar legislation is happening in other countries that will make a focus on privacy a requirement for companies.

There are other regulations known as PCI compliance. These standards set rules for handling financial information. PCI Group has a service you can look at to learn more.

Cybercrime Continues to Grow

As the internet continues to grow, cybercrime keeps growing with it.

The 2018 cybercrime report released by the FBI shows that it has caused $2.7 billion in damage in 2018 alone. Part of these damages include problems with customer data.

If you don’t focus on securing your data, then you are opening yourself up to attack. You can’t rely on luck to secure your company.

Consumers Are More Aware

It took a long time for internet users to trust putting their credit card details on a website. Once trust was established, people had no problem buying things online.

But that trust has eroded because of the privacy problems happening. People are less willing to give up their data and will start using services that do more to protect their information.

There Are More Large Privacy Breaches Than Ever

When a small privacy breach happens, you don’t often hear about it. But in the past several years there have been significant data protection issues.

One of the first ones happened with Facebook. During the 2016 Presidential election, a company called Cambridge Analytica misused Facebook data to collect a large amount of user information.

Cambridge Analytical used this data to target political messaging for presidential candidates. The problem was that data was collected from friend lists and not only people who downloaded the survey application used.

These are people that never consented to have their information collected.

Since then we have also seen data breaches with major hotel chains, credit card companies, and email providers.

We Collect More Data Than Ever

We don’t only collect names and addresses anymore. More people than ever use smartphones to access the internet. Mobile apps and websites have access to this information.

When you download an application, you have access to everything on the phone if the user clicks through permissions. You can access their contact lists, location information, text messages, images, and WiFi connection points.

There have been many cases of companies misusing this data and downloading information that they don’t need.

We’ve also seen a rise in geofencing technology. This tech allows businesses to target ads based on consumer location.

Some of this technology has become intrusive, so consumers are becoming concerned about how companies collect and use it.

How Can You Make Your Business Privacy Focused?

The focus on privacy isn’t likely to slow down. If you don’t meet consumer demand, then they aren’t going to do business with you.

Here are a few ideas that will help you stand apart from other companies.

Make Your Privacy Policy and User Agreements Clear

How many user agreements do you read when installing software? Most people skip through them without giving a second part.

That’s a mistake. You never know what companies will include in these agreements.

But because they are so long and complicated, people don’t want to read them.

Make your policies short and clear. When your users know what you do with the information you collect, they will trust you more.

Anonymize More Data

If you have a service that requires user data, ask yourself if you need to know who provided the data.

Anonymize as much of your data as you can. When you do this, it’s harder to tie identifying information to users.

Vet Business Partners

You need to work with people you trust. If you form partnerships with people who don’t care about privacy, how can you trust them with your customer data?

Business will become more transparent in the future. If consumers know you work with untrustworthy people, why would anyone trust you?

Data Privacy Is More Important Than Ever

Consumer data is everywhere. We need to put proper measures in place to prevent unauthorized and unnecessary access to information. If we don’t, consumers won’t be able to put their trust in us.

Companies everywhere need to work together to build data privacy guidelines that will create a privacy-focused world.

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