Did you know that 94% of companies in the United States have experienced an insider data breach in the past? Also, these companies record a 15% underperformance in the market three years after a breach.
If you’ve been taking data protection for granted, these statistics give you a glimpse of why you need to be more serious about keeping people’s data safe.
Have you been brushing data protection aside? If so, you probably don’t know what you could gain if you protect data. Here we tell you what data you need to protect and why you should pay more attention to data protection best practices.
What Data Should You Protect?
You probably don’t know what data you need to protect as a business owner. In simple terms, you should be concerned about any information that can be used to identify an individual. The individuals could be your employees, customers, business partners, or any other person who has an account with your business.
The identify ability data that you need to keep private includes:
- Name
- Addresses
- Phone numbers
- Emails
- Health information
- Bank and credit details
It is the data you use or collect when recruiting your staff, marketing your products, or when your customers perform transactions.
Protecting this data will minimize the risk that third parties will misuse it for identity theft, phishing, and fraud. It will also prevent data loss, which means that your information is permanently inaccessible.
Why Should Your Business Focus on Data Protection?
Now that you know what data your business needs to protect, you should understand why protection is essential. Here are the top reasons that will convince you to take the necessary precautions to keep your data safe:
To Comply With Data Protection Laws
Governments worldwide are coming up with data protection regulations dictating handling sensitive customer information. Although the United States does not have comprehensive data privacy laws like Europe’s GDPR, it has sectorial rules that require you to protect data.
Like California, Virginia, and Colorado, some states have more established consumer privacy laws. Regardless of where your business is located in the U.S., you have to adhere to these states’ privacy laws when dealing with clients living in the respective states.
For example, if you have customers in California, you must tell them if you’re selling their data and ask them if they are okay with it. The customers will also have a right to access the data you hold about them, correct it, and move it.
Failure to comply with the set state and federal requirements will incur crippling fines for your business. The punishment you’ll face from regulators may be a heavy price if you own a small business.
To Avoid Financial Losses
According to a recent report, the average cost of a data breach is $4.24 million. The cost can be higher if you have remote employees. If your data is well-protected, you will not incur expenses that can affect your business’s bottom line.
Your business will avoid spending its resources on compensating customers who are victims of a breach. You’ll also avoid the cost of hiring investigators to get to the bottom of data security issues. You won’t spend a dime on legal fees that may accumulate if a data breach victim sues your company.
Data security also means you won’t have to deal with federal and state fines or penalties that might leave your business struggling. You’ll also avoid court sessions that may go on for years and drain your company.
To Protect Your Customers
A data breach in your business will affect your bottom line and the information owners. In most cases, they’ll be your customers who trust you with their email addresses, phone numbers, and credit card information.
Protecting data will ensure that cybercriminals will not access your customers’ information and use it against them or their families. It will minimize the possibility that criminals will use sensitive information for identity theft, credit card fraud, and blackmail.
When you protect your stakeholders’ data, you’ll shield them from the risk of physical attacks. You will ensure that no criminals will access your client’s or employee’s home addresses, use them for stalking, and eventually hurt the information owner.
If your customers are victims of cyberattacks, they could file lawsuits that may take years to get their compensation. Having security controls will ensure that your customers don’t have to go through a legal process that could waste their time and resources.
To Protect Your Brand’s Reputation
Embracing data protection practices will cushion your business against irreparable reputational damage. Research shows that 87% of consumers are willing to walk away from a business if it experiences a data breach.
The customers will tell others about the cyberattack through word of mouth or social media. News about a breach in your business will also travel fast if the incident becomes a news story. The negative press will impact your brand by tinting its reputation, and customers will no longer trust you.
If you focus on preventing or minimizing cybersecurity risks, your customers will perceive your company as an entity that values their data. Data protection will consistently remind your clients that you care about their privacy. Your clients will never question whether you’re doing enough to protect their information.
As a result, you’ll build and strengthen the emotional connection between your customers and your brand. Your reputation for adequate data protection will get more customers, investments, and a higher employee retention rate.
To Prevent Operational Downtime
The aftermath of a data breach could severely disrupt your business operations. It will take time to investigate the root cause of the cyberattack and contain it.
It means a stoppage to your productive activities as you spend time finding out the systems the cybercriminals accessed. Even a minor downtime could cost your business thousands of dollars. If you’re a small company, you may not be able to accommodate such losses, and you may have to close temporarily or forever.
If you protect data, you won’t have to deal with such downtime. You won’t shut down your operations completely to give investigators time to get to the bottom of a data breach. Your business will operate normally and avoid any knock-on effects on your productivity and revenues.
To Gain and Maintain a Competitive Edge
You automatically gain a competitive edge over your rivals who ignore data privacy when you protect data.
In today’s digital era, most consumers are concerned about their privacy, especially when transacting online. If such consumers know that your company prioritizes data security, they’ll feel more confident working with you. They’ll choose you over other companies that don’t care much about data protection.
Caring about the privacy of the data you collect and the store will also prevent you from losing data that may give your competitors an advantage. For example, you’ll protect your business against hackers who can compromise your trade secrets and sell them to your competitors.
To Promote Innovation
When you value data protection, you and your employees will constantly explore better ways to strengthen your information’s privacy and security. For example, you will develop new technologies or products with in-built security features.
You’ll also discover better ways to protect the data you gather when you’re selling your products and services on online platforms. You’ll have to be innovative because it takes more brains to develop secure products that are not subject to privacy risk.
To Prevent Data Loss
Paying attention to data privacy and data protection reduces the risk that malicious people will steal sensitive data and use it for personal gains. Protecting data will also prevent data loss by ensuring that no one corrupts or deletes your crucial information. You’ll ensure the integrity of your data because no one will compromise it.
As long as you have a business, you have information that’s an asset to that entity. It includes information about the products and services you offer to your customers. It also includes your business and financial plans and information about your buyers and suppliers.
This data is an asset because you need it to keep your company running, generate profits, and mitigate risks. Therefore, investing in data protection means protecting one of your most essential assets. When you protect data, you also protect other tangible assets, like the cash in your bank accounts.
Final Thoughts:
A breach of the data you store about your customers and other stakeholders could have a crippling impact on your business’s bottom line. You should be proactive and embrace best practices to protect data.
Data protection will ensure that you are not at loggerheads with the authorities. It will also protect your reputation, make you competitive, and remain productive. Keep tabs on our blog for more helpful articles.
