in building trust. However, stories about data loss can steal the spotlight – and be reputation killers. Safeguarding against such risks requires a proactive approach: with strong data privacy, governance, and precaution.
The outcome? Sensitive customer data stays private, and customers stay satisfied.
It’s important to note that data privacy is different from data security. The latter revolves around securing information against bad actors with cybersecurity tactics like encryption, threat monitoring, and two-factor authentication. It safeguards the integrity and trustworthiness of the information.
Data privacy, another branch of data protection, deals with the appropriate management (sharing or collecting), handling, storage, and utilization of personal information, with an emphasis on regulation.
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Why is data privacy important?
In today’s AI boom, businesses are recognizing that data fuels the digital engine of best-in-class customer experiences.
Yet this realization is also stirring a wave of concerns among customers about how companies store, handle, and share their data. Fortunately, strong data privacy practices foster and maintain trust.
The core of any data privacy measure should demonstrate your commitment to customer privacy rights. Customers expect businesses to respect their privacy preferences – and by not doing so, can result in reputational damage and loss of customer loyalty.
It’s also vital as a preventative measure. Rules, regulations, and best practices exist for a reason: to help mitigate the damage that can happen to companies who lack appropriate safeguards.
Beyond negative customer impressions, violating data privacy regulations can come with a more direct cost in the form of fines. Consider the healthcare industry, for instance.
HIPAA violations can result in civil monetary penalties of up to significant monetary fines per violation, and criminal penalties can potentially involve fines and imprisonment.
How to protect customer choices in data privacy
Data privacy involves an individual’s ability to control how and when their data is used, as well as the ability to choose whether or not they’d like to share their data with a certain company. For businesses, data privacy involves the approach, processes, and perspective to allow for proper compliance.