In the present age, data is the fuel that is driving businesses across the world. Companies in banking, communications, healthcare, education, manufacturing, insurance, and retail sectors require customer data. Even government agencies collect data for various purposes.
Companies require data to offer customized experiences and automated messages to customers. There is increasing competition among organizations to collect important information and store it for future usage.
However, lawmakers are devising rules and regulations to protect individuals from information breaches and violations of privacy.
Data Privacy for Individuals and Businesses
For individuals or new freelancers, data privacy refers to protecting private information viz. bank account passwords, emails, phone numbers, et cetera. However, for businesses data privacy refers to the protection of information that is critical to their identities and operations. This mostly constitutes confidential data related to financial information, client records, and intellectual property among others.
According to Integrate.io, a data breach refers to the intentional or unintentional release of confidential data that exposes it to an untrusted environment. Data breaches have become quite common these days. Criminal hackers, foreign governments, activists, et cetera resort to data malpractices.
Hence, the General Data Protection Regulation (GDPR) was constituted. GDPR refers to a set of regulations in the European Union (EU) law regarding protecting personal data, and thereby the right to privacy, of all persons within the European Union.
An individual needs to understand the significance of data privacy. This is because companies use data for several purposes.
Customers provide different types of information to companies, knowingly or unknowingly. Some information provided might pose a risk for customers in certain circumstances, such as:
- Personal information such as residential address, phone number, bank account number, passport data, etc.
- Personal medical records and health information
- Banking details like debit card number, login ID, password, etc.
- Insurance information, social security number, intellectual property and the likes.
Importance of data privacy
Data Privacy has become very important in this age of the internet and easy access to information.
Businesses collect different types of data from consumers like personal data (viz. social security numbers, personal IDs, etc.); behavioral data (transactional details); engagement data (how individuals interact with the company); and attitudinal data (satisfaction, desirability, etc.) among others.
1. To personalize customer experience
Data provided by customers become the base for the companies. Depending on this, they analyze the behavior of the customers and modify the products or services to their tastes and preferences. Customized experiences delight customers. This results in brand loyalty and word-of-mouth marketing.
2. To devise a marketing strategy
Data helps organizations to understand the behavior of customers. Data analysts use the data to infer how customers engage and respond to advertising and promotional activities. It even helps in knowing how the customer perceives the brand. This helps in new product development, product promotions, post-sales services and other areas.
3. To sell it to other companies
There are several companies that gather data to eventually sell them to data service providers. These service providers buy customer information from companies and sell it to other businesses that require it, at a price. It is one of the rising industries owing to increasing demand.
Why observe Data Privacy
The Internet has crept into the routine lives of individuals and businesses. With the increasing use of social media and the revelation of details, people should learn to protect their private information. Data privacy should be a daily practice for organizations and customers.
Here are the ways how data privacy can help individuals:
When individuals protect their personal data, they are saved from excessive surveillance and harm. Personal data can be used for manipulation by fraudulent companies. Protection of such data helps people from vulnerabilities.
Exposure to private data might harm the reputation of an individual. Data breaches might even cause financial fraud, resulting in instability and insecurity. Reputation loss has grave consequences for individuals.
Releasing personal data means allowing companies and governments to have more power over the individual. Such information is used by businesses to manipulate the decisions of the customers, and their buying behavior and to exercise greater control over individuals.
How Data Privacy is a boon for companies
Instead of taking data privacy as a threat, companies should capitalize on it as a branding strategy. Present-age customers make conscious purchase decisions. They check out the impact of the product on the environment.
Many customers check how the products are being manufactured. In a similar manner, customers even check how companies handle the data provided to them. Hench, companies can devise a plan for using customer information.
Data privacy practices
Privacy plays a crucial role in building a brand image. Companies should make data privacy a part of business ethics. This helps build a positive image of the brand in the minds of the customers. When customers feel safe providing information to companies, it helps build trust and sympathy.
It is necessary that companies conduct regular data privacy audits based on standard practices. The results of such audits should be made available to society at large. This helps spread awareness about the good practices of the companies.
Data Privacy in the Digital Age
Privacy has been a fundamental human right. However, individuals have let out much of their private information in cyberspace. The rising use of the internet has made data omnipresent. Cybercriminals use this data for fraudulent activities.
Hence, data privacy has become all the more important in the present era of digitization and IoT. To provide enhanced security to customers, data privacy regulations have evolved with time.
While consumers have become all the more conscious while disclosing information, businesses have put better practices in place for collecting consumer information, data management, and data privacy.
Sakshi Baid works as a Product Associate at Refrens.com – Invoice generator & India’s most powerful platform for freelancer’s growth. She has worked for some renowned companies as a Brand and Digital marketing associate. You can follow Refrens.com on Twitter, LinkedIn, and Instagram.
Featured image: Photo by Dayne Topkin on Unsplash