These days, you’d be hard-pressed to go into a conversation about cloud technology and the Internet without hearing these two words: data protection. But even if it may seem like yet another tech buzzword, data protection is one of the essential aspects of modern digital technology – especially from the perspective of businesses.
And we’re not just talking about huge corporations either. Tons of small businesses often suffer attacks from malicious hackers – and the number of cyber-attacks has risen immensely in the past couple of years.
This is precisely problematic for smaller companies that process a lot of sensitive customer and other third-party data. Luckily, experts are developing new data protection strategies that promise to help organizations deal with new online threats.
With that in mind, let’s take a look at the basics of data protection, why it’s so important, and how it benefits your organization.
Data Protection – What Is It?
In short, data protection is a catch-all term for a bunch of different mechanisms and processes that have one common goal: protecting your data from loss, compromise, corruption, or theft. When companies implement adequate data protection measures, they’re doing a lot to protect their customers – who are vulnerable to phishing scams and various kinds of identity theft.
So, what kind of data does an organization keep? For the average company, it’s stuff like:
- Phone numbers
- Email addresses
- Names
- Financial details
- Medical information
- Home and work addresses
Why Is Data Protection Crucial?
Look around you – we increasingly rely on online transactions and cloud technologies. A decade and a half ago, most of the software we used was installed on discs, and we bought new versions of the software each year – stuff like Adobe Photoshop, Microsoft Office, etc.
Fast forward to today, and it’s all SaaS – Software as a Service. And it’s all in the cloud. We don’t go to a physical store to buy a physical disk; we pay a subscription, like for Netflix or any other SaaS service.
However, in the process, we expose a lot more personal information to the Internet than we ever did before – including crucial bank info. This has led to the rise of an entire generation of highly-skilled and equally malicious hackers, intent on compromising the data of both companies and individuals, using it for fraudulent purposes, or simply selling it off to other bad actors.
The amount of PII (personally identifiable information) that organizations handle on behalf of their stakeholders, employees, and customers means that any data breach can be incredibly damaging.
Imagine what someone could do with your driver’s license, social security number, or passport. Any malicious hacker could use this kind of information to wreak havoc on your company and your personal life.
That’s what makes data protection vital – especially for small businesses. While a large company might have the resources to rectify a data breach quickly, the financial and reputational hit could spell doom for a smaller company.
Customers have become wiser regarding their own data protection on the Internet, and they’re quick to leave a company whose cybersecurity has been breached. And we’re not talking about a couple of disgruntled companies – if you’re a B2C business, customers will start leaving en masse.
This drop in revenue makes it harder to deal with other accompanying difficulties – like the fines your company could incur if it hadn’t complied with cyber security regulations before the attack.
Regulatory Compliance
This urgent need for better data protection (and cybersecurity in general) has led to increased regulatory scrutiny. In the past three years, the international regulatory framework for data protection has been overhauled by the enactment of the CCPA (California Consumer Privacy Act) and the EU’s GDPR – the General Data Protection Regulation.
While both are too complex for us to go into extensively here, their end goal is identical – the GDPR and the CCPA were designed to give customers certain online rights that weren’t codified before.
And these rights include the right to know precisely what data any organization or company collects from them, what data is shared or sold, and the third parties to whom their data is shared or sold.
While larger corporations have entire compliance departments whose job is to ensure the company stays within the limits of the law, smaller companies that process customer data often unintentionally fail at compliance – simply because they don’t have the resources to hire experts.
Other Consequences
Plus, apart from the reputational hit that we’ve discussed above – there are other consequences to the lack of proper data protection. Companies suffer significant financial losses in other ways – including coverage for legal fees, cyber-security experts who need to determine the weak point that enabled the breach, the costs of purchasing better security systems, and finally, compensation to affected customers.
All of this makes data protection essential as a preventative measure that will prevent all of these troubles from causing your company more harm down the line.