There is a phrase the data security industry has been using quite a lot these days, “Data is the New Gold”, the question that surrounds it is that whether this is just a phrase for marketing purposes or does it actually hold some truth to it that is defining a new paradigm that will or is transforming the world.
The reality as we have seen in this pandemic is that data is more than just gold since the world as we know it, is data-driven and it functions on data-driven technologies. This article will revolve around defining what privacy is and why it is important for companies to realize the importance of privacy and invest in it. It will further mention whether it is compulsory for these companies to comply with GDPR and are they legally liable to comply with it.
What is Privacy?
Privacy quite simply means freedom from interference. It matters because the lack of privacy gives others power over us.
But when Privacy is referred to, in the context of data privacy it means It is a form of data protection that deals with the proper handling of sensitive data, such as personal data but also other confidential data like financial data and intellectual property data, in order to comply with regulatory requirements while maintaining the data’s privacy and security.
Why is Data Privacy important for companies in today’s age?
The answer to this question comes down to business imperatives:
- Business Asset Management
Data is, without a doubt, a company’s most valuable asset. We live in a data economy, where businesses place a high value on gathering, sharing, and analysing data on their customers and users, particularly from social media. Transparency in how businesses obtain consent to preserve personal data, adhere to their privacy rules and manage the data they’ve obtained is critical to establishing confidence with customers who regard privacy as a basic human right.
- Regulatory Compliance
Data management for regulatory compliance is arguably much more critical. Noncompliance with regulatory obligations on how a company collects, stores, and processes personal data could result in hefty penalties. If the company is hacked or ransomware is used, the ramifications in terms of lost revenue and customer trust may be significantly greater.
Other than the business imperatives, there are a few other factors that incline companies to look and invest in data privacy. They are:
- It helps reduce the number of data breaches that an organization can suffer
- It helps prevent loss of revenue
- It helps protect customer’s privacy
- For maintaining and improving brand value
- It supports an organization’s code of ethics
- It gives a competitive advantage over other business.
Why should companies invest in Data Privacy?
As per Cisco’s 2019 Data Privacy Benchmark Study, compliance with privacy rules may appear to be a time-consuming, costly endeavour, it actually provides businesses with a number of tempting benefits. We’re not simply talking about having a clear conscience and lowering the financial risks of fines and civil liability. Studies suggest that, in addition to mitigating the impact of data breaches, the correct expenditures in privacy compliance can even improve sales.
Hence to sum it up the major reasons for companies to invest in Data Privacy are:
- Customer Expectations
- Competitive Advantage
- Fines and Lawsuits
What are GDPR Compliances?
This new data protection regulation puts the customer in control, and businesses and organizations are responsible for complying with the regulation. Otherwise, you’re not following the rules.
GDPR applies to all EU-based organizations and companies, regardless of whether the data is processed within the EU or not. Even firms that are not based in the EU will be subject to GDPR. GDPR applies to your firm if it sells goods or provides services to EU citizens. All organizations and businesses that handle personal information should appoint a data protection officer or data controller to oversee GDPR compliance.
Companies and organizations that fail to comply with GDPR face fines of up to 4% of annual global revenue or 20 million Euros, whichever is greater. The GDPR distinguishes between two types of fines:
LEVEL 1: The less serious breach can result in fines of up to €10 million, or 2% of the preceding fiscal year’s global turnover, whichever is greater.
LEVEL 2: For particularly serious breaches, the fine framework can be up to 20 million euros, or 4% of the prior fiscal year’s total global turnover, whichever is higher.
Companies are also attempting to prevent the negative publicity that comes with GDPR fines, reputational harm, and maintaining brand value and investor appeal, in addition to the financial component.
As per a Cisco report, 97 percent of businesses claim they get more value from their privacy investments than just complying with privacy rules. Competitive advantage, investor appeal, operational efficiency, and increased flexibility and innovation capability are just a few of the advantages. Three-quarters of all respondents stated they got two or more of these benefits. Furthermore, the majority of businesses today consider robust data privacy to be a competitive differentiator in their industries.
The idea behind ensuring that your company invests in privacy is not just a step to stand out in today’s business world but also that it has become a necessity in today’s data-driven economies. Therefore GDPR should be seen as an opportunity to instigate your digital transformation, improve overall processes and customer relations, and improve one’s marketing by feeding it with relevant data and instead of worrying about the cost and effort of complying with privacy laws, one must consider all the benefits privacy investment can bring to your business.
This article was written by Ayush Sahay.