6 Key Reasons Why You Should Protect Your Customers’ Data in 2021
Now more than ever, privacy on the internet is becoming a thing of the past. Personal information fills the digital space, giving cybercriminals and fraudsters a playground and potential minefield for data breaches to occur.
People are becoming wary of quickly handing over their data to online entities and companies because of the regularity of data breaches that puts them at risk. Nevertheless, data remains one of the most valuable resources for companies today.
Access to customers’ data makes it easy to ditch the guesswork and make accurate decisions based on data you have gathered. Without customers’ data, many companies would be at a loss as to what their customers need and how best to provide it for them.
With more people closing off access to their information and the unrelenting cybercriminals making matters worse, how can you reassure your customers that you will keep their data safe?
Data protection is the answer you seek.
What is data protection?
Data protection is simply taking measures to ensure that customers’ data is not corrupted, compromised, stolen, or lost. It is also ensuring that if a data breach ever occurs, you are primed to recover the data quickly with little to no casualties.
You can define it as the strategies and procedures you use to protect your consumers’ data integrity, availability, and privacy. You may also know it as data security or information privacy.
If you own a business and collect, store, or handle any form of sensitive data from your customers, having a working data protection strategy is vital for you. However, a strategy is only successful if it can effectively shield data from theft, corruption, and damage if a breach occurs.
Your strategy should also have measures that can minimize the data damage in the case of any disasters.
Because of the importance of data protection for businesses due to the spike in sensitive information they have access to, the Government has started to issue some laws in different states to guide consumer data gathering and protection.
Customers’ Data Protection Act (CDPA)
The CDPA for the state of Virginia was passed into law in March 2021 and grants Virginia consumers rights over their data.
The Act also ensures that companies who are under this law “comply with rules on the data they collect, how it’s treated and protected and with whom it’s shared.”
A few other states are interested in the protection of data for their residents, like California. The various Data Protection Acts all carry similar messages for companies that collect and store data.
- Giving consumers a clear privacy notice, including a way for them to opt-out of targeted advertising
- Allowing consumers to see data collected about them within 45 days
- Getting consumer consent to process their sensitive data.
- Letting consumers know if the company will sell their data.
- Allowing consumers to refuse the companies from selling their data.
- Allowing consumers to delete their data.
6 Reasons why customer data protection is important for businesses
There are many reasons why data protection is important, asides from the fact that unsecured customer data put your customers at risk. It is also vital to note that it also has serious effects on your business and its reputation.
So that you don’t risk losing your customers and a good name, take note of the highlighted reasons why you should protect your customers’ data.
Data breaches can happen to any business
Many small businesses and even a few big ones are not aware of the consequences of data breaches. Even worse, think they’re untouchable and impervious to cyberattacks from hackers and cybercriminals.
It is important to note that any business can suffer a cyber attack, whether small or large. As long as you have access to, collect and store sensitive information from your customers, these criminals want to get to it too.
Research has shown that small companies suffer the most from cyberattacks, with about 67% of them suffering a cyberattack and 58% have suffered a breach. They are easy prey to the attackers because they are usually unprepared or do not have enough resources to resolve most attacks.
Customer data makes up a part of your company’s asset
Data today is a very important tool in the digital space. It not only provides you with factual information that can help you improve your company, but it also helps you provide better services and products for your customers.
By satisfying your customers and meeting their needs through the information you derive from their data, you boost your company’s revenue. Based on these important benefits both for the present and future of your company, you can describe customers’ data as assets.
Your company’s assets in the wrong hands, such as your competition, can quickly run you out of the market. If cybercriminals steal your customers’ data and sell it to your competition, you may kiss your business goodbye.
You can save unnecessary costs
If you are not adequately prepared for the worst data breach cases and you get hit, the costs incurred can cause a huge blow to your business’ finances.
In trying to salvage the damage done by cybercriminals, you may have to spend unbudgeted resources, which may affect the smooth flow of other processes in the business. A shortage of money may also cause stunted output, which can lead to a loss of customers.
You protect your company’s reputation
When your customers allow you access to their data and other sensitive information, such as their credit card details, they trust you to keep it safe.
When your business suffers cyber attack after cyber attack because you fail to protect your customers’ data adequately, it gives your business a bad name. Your customers start to lose their confidence in you and may boycott your company to avoid future risks.
You can face lawsuits or incur monetary fines
With the CDPA and other Data Protection Acts in place, companies are liable to go to court or pay monetary fines for mishandling customers’ data. Customers may also sue companies for putting their data at risk, which may run into losing millions of dollars.
There may be repeat cyber attacks
Because the main goal of malicious cyber attacks is money, the hackers may automate the cyberattacks to occur repeatedly.
These attacks are set up so that the hackers do not even have to be at their computers for the bugs to be deployed. Knowing that they have unprepared businesses to attack for money encourages them to tamper with your data consistently.
How can you protect your customer data?
Knowing how important it is to protect your customers’ data, there are certain steps you should take to do so. Check out the 5-step method to securing your customer data from breaches below.
Use a secure network
This is the first step to create a secure database for the company and the employees in the organization. A secure, dedicated server lowers the risk of leaving vital customers’ data open to breaches. It is also important to continuously back up said data to prevent data loss.
Create stronger passwords
A weak password leaves a vulnerable entry point for hackers and malicious cyber users. With all the sensitive data being stored, all passwords should be as uncrackable as possible and not just a random, easy-to-guess word.
It should consist of varying letters in different cases, numbers, and symbols for stronger protection. You can also use password management tools like LastPass for 2-factor authentication purposes.
Keep only the data you need
Sometimes businesses may store some data that is no longer necessary to the company but is still sensitive information. The more data you store, the greater the risk your business is taking, so deleting data that is no longer serving you is a wise decision.
However, before you take the leap, ensure you destroy irrelevant data before erasing them from your database. It’s easy for hackers to retrieve data from hard drives if it is not properly destroyed first.
Prepare for data disasters and emergencies
If you face a data breach today, do you have a plan to mitigate the effects and quickly salvage the damage done? If your answer is “no,” then you need to map out one immediately.
With the aid of data security personnel, you should build a workable data protection strategy for your business to combat any cyber attack disasters or emergencies.
Train data-handling staff for data protection practices
Adequate hands-on training is essential for staff that have access to sensitive customers’ data. This training should cover the essential practices for data protection to avoid internal data leaks or sensitive data exposure from your very own employees.
Although useful, customer data is high-risk information that can cause problems for your customers if they fall into the wrong hands. To ensure that you keep your customers’ trust and maintain your credibility as a company, you must create a data protection strategy to secure this data.
Comply with the Customers’ Data Protection Act as it applies to your company and follow the 5-step data protection method we have outlined in the article to keep your customer data safe and away from data thieves.
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