When you interact online, whether by shopping for clothes or using a maps app to get directions, you leave behind a trail of personal data. Companies need this data to optimize operations, better serve customers and make essential business decisions. However, data breaches can cause irreparable damage to brands and result in fines from regulators. IBM’s latest Cost of a Breach study found that the average cost in 2024 was $5 million due to factors such as lost intellectual property and reputational damage.
In order to ensure that personal information is handled fairly and securely, many countries around the world have established laws and regulations in place that protect data privacy. These laws, such as the European Union’s General Data Protection Regulation (GDPR) and California’s Consumer Privacy Act, require that businesses have a clear policy outlining how they will use and disclose customer data.
Data privacy also involves ensuring that only authorized individuals have access to data. This is commonly achieved through requiring that users go through a multi-factor authentication process, where they must prove their identity with something they know (e.g. a password), something they have (e.g. a security token) or something they are (e.g. their fingerprint).
Other aspects of data privacy include limiting the collection and usage of personal information to what is necessary for a given purpose, and encrypting sensitive data to ensure that it cannot be read by unauthorized individuals. Additionally, organizations should be transparent with their consumers about how their data is used, and allow them to withdraw consent at any time.
About the Author
