Data Privacy: Why It’s Crucial for Modern Businesses

Data privacy is more than just a theory in the digital era; it is essential to a company’s ability to survive in today’s highly competitive marketplace. Data privacy has become a top concern for all businesses, from minimizing legal risks to winning over customers. In a recent study, 78 percent of consumers said they trust businesses with clear rules and data protection practices. Let’s examine the importance of data privacy and how to protect it.

The Challenge of Preserving Consumer Trust

Millions of consumers provide sensitive and personal information to businesses every day. If this data is not protected, the company’s reputation could suffer, and client trust could be undermined. The 2018 Facebook Cambridge Analytica incident is an obvious illustration of this issue. Facebook’s share price suffered greatly due to the widespread criticism it received for misusing user data.

Legal Risks and Impact

Globally, stricter data protection regulations are being implemented. There are already more stringent regulations on how businesses use data, such as the California Consumer Privacy Act (CCPA) and the General Data Protection Regulation (GDPR) of the European Union. Amazon was penalized over €746 million in 2020 for breaking the GDPR. Tech behemoths like Facebook and Google have also been hit with hefty fines. Other businesses worldwide are beginning to reconsider their data security measures as a result of the incident, which has also made them feel afraid. Ignoring legal commitments can have disastrous consequences for businesses, as demonstrated by the fines imposed on Google and Facebook.

Legal risks of data privacy and its potential impact on modern businesses. | Photo collected.

The most effective strategies for protecting the data

To guarantee data security, businesses employ a few efficient procedures. A few of the noteworthy ones are:

• Data encryption: Protecting client information from online threats by encrypting it. This explains the significance of data security.
• Access control: Preventing unauthorized personnel from using information.
• Data minimization: It is the process of gathering only the information that is required without keeping extra information.
• Data retention policy: After a predetermined amount of time, each piece of data will be removed separately.

Act on Digital Security

Bangladesh passed the “Digital Security Act, of 2018” to safeguard personal information. Beyond protecting personal data, this act is crucial in preventing criminality in the use of information technology. Punitive sanctions are also provided for offenders who violate, misuse, or use personal data without authorization. Section 26 of this legislation states that anyone who infringes the privacy of personal data faces a maximum penalty of five years in prison, a fine of five lakh taka, or both. Despite being a significant step in cyber security, experts say that this act’s successful execution necessitates raising public awareness and enhancing technological capabilities.

Data Security Examples in Bangladesh

Bkash, a mobile financial services provider in Bangladesh, uses cutting-edge technologies to protect its clients’ data. Data encryption is guaranteed, and an OTP is added to each transaction. As a result of these actions, customers’ trust in bKash has grown, and the company’s service adoption rate has considerably increased.

Various examples of ensuring data privacy in Bangladesh and their implementation. | Photo collected.

A Tool to Stay Ahead

Businesses that put data protection first remain ahead of the competition. Apple, for instance, has gained the trust of people all around the world by securing their consumer data. In addition to being a marketing tagline, “What happens on your iPhone, stays on your iPhone.” reflects their dedication to their clientele.

Data privacy has evolved from a luxury to a fundamental business requirement. Investing in data security will help you stay ahead of the competition, gain the trust of your clients, and fulfill your legal requirements as your firm expands.

The proper data security plan will not only lower legal risks for your company but also serve as a potent safeguard for your company’s reputation. Data security should be your organization’s top priority right now.

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