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Data Privacy In Business: Why You Need It

Post author photo

Kateryna Manetska

IT Lawyer

January 24, 2023

/

7

 min read

Data Privacy In Business: Why You Need It

Post author photo

Kateryna Manetska

IT Lawyer

January 24, 2023

7

 min read

We are well aware that data is one of the main assets and value generators for businesses nowadays. It is used as a basis for a wide range of operations, especially in the digital world. Different types of data are constantly being collected and processed by organizations of all sizes, which in turn are continuously exploring how to improve data flow and usage effectively, like cutting costs, developing better products, and delivering services of higher quality. However, operating with data can be risky once it directly or indirectly identifies the customer. 

In light of this, the conversation around activities with personal data is becoming increasingly prominent, and privacy-related issues have become pivotal for tech businesses. Implementing data privacy in business might be quite costly, and its direct contribution to the organization’s success is not always visible at first glance. However, gaps in such compliance turn out to be much more expensive than investing in prevention in the long run perspective. 

We highly recommend implementing data privacy in your business compliance programs if you have not yet done so. It will open up the possibility of ensuring the safety of your products and services and empower long-term, trusted cooperation with the customers.  

What Is Data Privacy?

Data privacy is a type of data management that establishes measures and processes to ensure the safety of data and prevention of its improper use, leak, or loss in the digital environment. Reasonably, we should talk about participants who are involved in such management of data privacy in business. Usually, there are:

  • Data Subjects - identified or identifiable natural persons. Simply put, this is any person from whom or about whom data is collected and used. 
  • Data Controllers - natural persons or legal entities which determine the purposes and means of processing such data. These are participants that determine the purpose and need for processing personal data. If your organization is collecting and processing the data for its own business purposes and needs, not just as a service provider acting on someone’s behalf, you are a controller.
  • Data Processors - participants that process personal data on behalf of data controllers. While the controller defines the purpose and need of using data, the processor finds and applies the means for such usage (outsourcing the actual data processing function to another entity - the data processor).

Being a controller or processor, you should understand how to organize data management and ensure data privacy in business. 

Data Privacy vs. Data Security

Data privacy defines the general framework for compliance, including laws and regulations, internal policies and guidelines, agreements, and specifications. Data privacy is oriented toward discovering which data is important and why it should be protected. 

Data security is usually described as a set of technical measures implemented to protect data. Providing a safe digital harbor for data is one of the cornerstones of successful business operations. Considering this, privacy & business protection implies a set of features and technical measures integrated to ensure the safety standards of the exact product or service. For instance, monitoring of suspicious activities, network security, data storage plans, data encryptions, data breach responses, authentication processes, automatic backups, recovery processes, and so on. 

Any data security features should go in line with these data privacy policies. For greater comprehension, we can say that data privacy is a framework, while data security is a technical toolbox for its maintenance. 

You should work on ensuring privacy and security in all stages of the operations with data:

Data Collection and Processing 

At this stage, you should have a precise understanding of the data road map: how it is collected, on what basis, and what is the purpose of this collection. 

Data Storage

Consider where and how long the data is stored. Also, pay attention to how secure the storage environment is. 

Data Access

Awareness and accessibility are the core principles at this stage. If your customer is confident and aware of the scope of data-related rights, the possibility of gaining trust is much greater. 

Data Breach 

A data breach is an incident where such data is stolen or taken from a system without the consent and authorization of its owner. Undesirable, however, "forewarned is forearmed." Data breach incidents may cause large-scale consequences. Hence consider preparing an action plan in the event of a privacy breach.

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Main Compliance Challenges Data Privacy in Business

  1. Absence or insufficiency of internal policies and data privacy plans.

First and foremost, there should be clarity for the organization itself. Failure to define and regulate your role, responsibilities, and commitments in the data operations will firmly cause a failure in compliance later on. 

  1. Rapid changes in privacy legislation and regulations. 

Given the constant updates and amendments to the legal framework in the field of data protection, it might be tricky to conduct timely checkups and compliance procedures. While many organizations have already gotten acquainted with the GDPR and its main requirements, new guidelines and interpretations by the local and international authorities are adding more specifics to the compliance processes every year. Hence the process of such changes will never stop.

  1. Cost of privacy compliance procedures.

Knowing the regulations and understanding what measures should be taken is crucial. However, insight alone is not enough. This knowledge should be reflected in the actual processes of the company. Establishing such processes might be costly since it requires specific expertise and professionals, like hiring dedicated data protection officers (DPO), information security specialists, or even a whole data security team.

How To Avoid Data Privacy Risks In Business

Even with the complexity and velocity of privacy processes, it is possible to avoid potential risks of data privacy in business. Try to build a system that will help identify, detect, and protect the data collected and processed by your business and be always ready to respond and recover in case of any incidents.

Here are some tips and advice on how to ensure the above set of tasks:

  1. Get to know the scope and life cycles of the data you are collecting and processing. 

Carefully consider the purposes of collection and duration of data storage and processing. Do not store unnecessary data. Keep track of data flows and transfers and accompany them with relevant documentation (e.g., data processing agreement, data transfer permissions). Limit access to the data inside the organizations as necessary.

  1. Consider the technical part of data privacy.

Ensure your technical features are sufficient to protect the data collected and ensure a fast and proper reaction once any incident happens. Identify the vulnerabilities. If you are operating with sensitive data, keep in mind that you must invest in information security solutions that address the potential risks.

  1. Define the territorial scope of your data privacy compliance.

For this, you have to consider 3 main aspects:

  • Your business incorporation jurisdiction
  • Your business activities location
  • Your customers’ and end users' location

Even if you are registered under different governing laws, you cannot ignore the privacy regulations of those countries where your audience is located.

  1. Appoint a responsible team/individual.

A dedicated privacy team is a good option. However, there can be less costly alternatives for small or starting businesses. Legal teams should be responsible for monitoring the applicability of relevant legislation on your business and drafting the framework for compliance. Marketing and business development teams can keep connected with the customers and ensure the accessibility and availability of the data to them. Technical teams should keep track of data localization and develop solutions, seamlessly ensuring data privacy. Also, a variety of software offers privacy compliance solutions that meet reasonable financial expectations (like prepared templates, policies, agreements, virtual DPOs, compliance checks, and reports). 

  1. Increase awareness inside your organization

Keep in mind that all individuals who interact with data should have sufficient knowledge and obtain relevant training in this sphere. Consider introducing educational meetings or workshops for your team to raise awareness of business privacy. As mentioned above, your employees should cooperate closely to maintain sufficient data privacy and security. 

  1. Keep in mind data privacy in cooperation with vendors and partners.

Business privacy is an issue that should be carefully considered at all stages of business operations, particularly while discussing future cooperation. Include data protection provisions in agreements to specify the scope of obligations and liability. Ensure the relevant provisions are included in the services agreements with your employees, consultants, prospects, and other contractors. Find out which data security tools will be implemented during the software development process.  

Conclusion

Fortunately, the data compliance challenges that might be faced can be mitigated by understanding and developing a solid data privacy action plan before any issues arise. 

Axon Team is committed to privacy-oriented approaches in delivering services to our clients. Our technical and legal teams, data analysts, and managers are constantly conducting training and keeping track of the latest changes to deliver solutions that meet current data privacy standards.