In today's fast-paced world, the use of external data has become a critical aspect for companies of all sizes. With the abundance of data available, companies can gain valuable insights into their industry, customers, and competition. Everything to make informed decisions that drive growth and success. However, as with any valuable resource, external data poses certain risks. Therefore external data privacy and security play a crucial role in data-driven companies.
The whole data market is growing at an astonishing speed, according to Acumen Research and Consulting report released in December 2022. “Big Data Market Size is Set to Achieve USD 473.6 Billion by 2030, growing at 12.7% CAGR”. Therefore, it's essential for companies to not only understand the laws and regulations surrounding external data privacy but also be aware that they vary from country to country and change pretty often. For instance, the European Union has strict data privacy laws - General Data Protection Regulation (GDPR). While the United States has more relaxed laws. “The United States doesn’t have a singular law that covers the privacy of all types of data. Instead, it has a mix of laws that go by acronyms like HIPAA, FCRA, FERPA, GLBA, ECPA, COPPA, and VPPA.” said Thorin Klosowski in NY Times .
Companies must familiarize themselves with the privacy laws of the countries in which they operate. They need to ensure compliance and avoid potential legal consequences.
It is essential to know and understand the law related to external data privacy, but why?
One of the biggest reasons companies are knowledgeable about data privacy and security laws is to avoid potential legal and financial repercussions. Laws surrounding data privacy and security are constantly evolving, and companies must be aware of the latest changes to ensure that they're in compliance. For example, the European Union's GDPR was introduced in 2018, significantly impacting how companies collect, process, and store data. Companies unaware of the GDPR and its requirements were at risk of facing substantial fines.
Moreover, companies that are up-to-date with data privacy laws can also maintain their reputation and gain the trust of their customers. In today's world, consumers are becoming increasingly concerned about the privacy of their personal information. Therefore being seen as responsible and secure can differentiate you from the competition and establish a competitive advantage.
Staying informed about the latest data privacy and security laws is essential for companies in today's fast-paced business environment. Companies must take the necessary steps to stay up-to-date with data privacy and security laws. They need to ensure that they're in compliance and can maintain the trust of their customers.
Working with many customers in the data market, we learned a lot about security and privacy. Very often this topic was postponed and neglected - which caused many problems at a later stage. Nevertheless, we gathered several good practices related to that area.
One of the simplest and most effective ways to ensure external data privacy is through data anonymization, which involves removing personally identifiable information, such as names, addresses, and social security numbers, from the data set. Unfortunately, for some companies, it is quite a big challenge. There is no proper infrastructure; data are not consistently spread around the whole company, and there is no experience in that field.
Another way to protect external data is through data encryption, which uses cryptographic algorithms to scramble it, making it unreadable to anyone without the proper decryption key. It is mainly used in the healthcare and financial industries, where security and privacy are highly prioritized.
Access control is another important aspect of data privacy and security. Companies should limit the number of people who have access to their external data and ensure they have proper security clearance to reduce the risk of a data breach.
Regular security audits can also help companies identify potential risks and weaknesses in their data privacy and security practices, allowing them to take appropriate action to prevent a data breach.
It's also important for companies to educate their teams on the importance of data privacy and security. Teams should understand the risks associated with external data and the best practices for ensuring its safety. This will help create a culture of security within the company and reduce the risk of a data breach.
In conclusion, companies must understand that risks associated with external data are severe, and it is crucial to ensure its privacy and security. By following best practices and strategies, such as data anonymization, data encryption, access control, regular security audits, and educating teams, companies can minimize the risk of a data breach and protect the valuable insights gained from their external data.