The collection of personal data has become undeniably ubiquitous in modern life. Online transactions, website visits, smart devices and numerous other sources provide a wealth of big data that is bought, sold and analyzed for many purposes. Data collection is so pervasive that most consumers hardly give it a second thought until a data breach makes the news.
Data collection fuels innovation in the business world. The study of data analytics and its business applications has become central to degree programs like Southern Illinois University Edwardsville’s online Master of Business Administration. Data breaches, public awareness and developing regulations are forcing students and practitioners of data-driven business management to reprioritize data privacy and security.
These shifts in how businesses and consumers view data privacy make the study of data governance, security and ethical data use more important than ever. The success of present and future businesses may well rest on how a business’s data privacy policies and security measures hold up to public sentiment and cyberthreats.
How Have Data Breaches Impacted Consumers?
According to an article from CSO, “Data breaches can affect hundreds of millions or even billions of people at a time.”
For instance, CSO reports that the Yahoo data breach of 2013 compromised roughly three billion user accounts. Thankfully, hackers were not able to steal users’ most sensitive information like passwords or bank data. In 2019, an information leak on the dark web exposed over half a billion Facebook users.
Numerous breaches of other massive companies like LinkedIn, Experian, T-Mobile, Marriot and Alibaba made news headlines over the past decade, resulting in varying degrees of sensitive information being accessed by cybercriminals. These criminals may sell personal data on the dark web or use it to commit other financial crimes. Identity theft is a prevalent risk and concern for many, and malicious actors may use personal and sensitive information to scam, threaten, extort, blackmail or publicly shame people.
How Are Data Privacy Regulations Evolving?
The U.S. has no comprehensive, singular data privacy law. Certain federal laws regulate the collection and use of types of data or the data of specific populations (children, namely). Most decisions regarding data privacy policies in the U.S. have long been left up to the businesses dealing in data.
However, a few states have enacted fairly comprehensive data privacy laws, the most notable being the California Consumer Privacy Act (CCPA). The CCPA gives consumers substantial control over the collection and use of their personal information. Consumers have the right to opt out of data collection without discrimination as well as delete information that has been collected.
Outside the U.S., Europe has enacted one of the world’s most broad-reaching data privacy laws, the General Data Protection Regulation (GDPR). The GDPR and the CCPA are similar, though the GDPR is generally more robust in terms of scope and accountability.
Taken together, the data privacy regulations of these two entities impact a large portion of the world’s economy. Differentiating a business’s privacy policies and security practices (and all associated websites, services, products and more) from locale to locale can be hugely inefficient. Because of the worldwide impact of these regulations, many businesses are proactively and uniformly adopting privacy policies and data security practices to be in global compliance.
How Can Approaches to Data Privacy Impact Consumer Trust and a Business’s Bottom Line?
A consumer survey conducted by McKinsey correlated data security with consumer trust and consumer support for businesses. Responses showed that opinions regarding security practices impact whether or not the majority of consumers do business with a company. Similarly, most respondents would stop patronizing a business if it shared data without permission.
One might think forgoing any amount of data collection revenue and insight would harm a business’s bottom line. But McKinsey’s findings, growing public sentiment and increasing data privacy regulations suggest otherwise. As McKinsey notes, “Leading companies are learning that data protection and privacy can create a business advantage.”
Prioritizing data privacy and security does not mean a business has to stop leveraging data for insight, decision-making and competitive advantage. Rather, businesses that conduct data transactions transparently, securely and with clear consent of the consumer can build trust, brand loyalty and a positive reputation — all priceless commodities in the modern world of consumer-centric business.
Further data privacy regulations are inevitable, and business leaders who want to stay ahead of the curve will recognize that prioritizing data privacy and security can turn potential liabilities into strategic assets.
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