Cybersecurity breaches will happen–there are no two ways. The best thing you can do is to put safeguarding measures in place before a data breach, ensuring that all your business data is as protected as possible.
Companies handle various data, ranging from their files to potentially sensitive consumer data. It’s imperative to keep these data secure, not only for the health of your business but also because it’s a legal requirement in many parts of the world.
Do companies need a data protection policy?
Depending on location, a business may legally require a data protection policy. However, noncompliance with such laws can result in administrative fines, which all business owners want to avoid. Examples include the EU General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).
Even still, data breaches reached a global average cost of $4.24 million in 2021, highlighting the importance of developing a privacy policy. All businesses should be aware of their data, its sensitivity, and who has access to it.
The way people use data is changing, too, which makes a protection policy even more important. For example, companies may need to move data between software applications, localities, and environments as they expand their businesses. Sometimes, companies may store data in different countries, subjecting it to different laws.
In the event of a data transfer to a place outside the specific region, the regulations may still apply. For example, the GDPR governs businesses in the European Union; if they transfer data outside the EU, the GDPR travels with it. Having a policy for your business ensures you can comply with all the regulations you need to.
Data protection policies also ensure that your business only processes the personal data it needs and stores necessary data. They also cover transfers of personal data and ensure the utmost protection in case of movement or a cyber-attack.
What are the 7 principles of data protection?
All companies, including small businesses, should have a data protection policy. The European Commission lists seven principles of data protection regulation in the GDPR.
They govern things like data access, transparency, security, and collection. Although only some businesses have to be GDPR-compliant, these principles can provide helpful guidelines.
All businesses must comply with these principles if they operate in Europe and deals with European citizens. That said, here are the seven data protection regulations and GDPR guidelines.
1. Lawfulness, fairness, and transparency
A good data center should have a viable reason for data collection and processing. Viable reasons include the following:
- Fulfilling a contract.
- Providing a legal obligation.
- Performing a task in the public interest or because the user has given you consent.
Consent is essential; many companies ask their consumers to agree to the privacy policy.
2. Purpose limitation
When collecting data, you must do so for explicit purposes. For example, you should only collect personally identifiable information if you need it for transactional purposes, and you should communicate this purpose to the customer via a privacy notice. Following that, you cannot use the data for another purpose.
For this, you need to conduct data classification, knowing what data you need, possess, and what your company will use it for.
3. Data minimization
Similarly, you should collect only the most minor data you need for relevant purposes. For example, if you are building a mailing list for email marketing, you only need to ask for the subscriber’s name and email address; requesting a home address is irrelevant.
This can help with your company’s data processing by removing irrelevant categories. It also protects the customer.
4. Accuracy
All information you have on a data subject should be accurate and up-to-date. It’s necessary to have frequent audits that check the quality of the data stored.
5. Storage limitation
The processing of personal information sometimes has a time constraint. Particularly with sensitive information, keeping data on file may only be necessary for a while. However, the GDPR stipulates that you must justify the time length you intend to store user data, so eventually, you should anonymize data that is not actively in use.
6. Security
The GDPR outlines an ‘integrity and confidentiality principle, a call for security. Therefore, it’s vital to have solid security measures in place to prevent data loss and theft and use a reliable data center.
Data is stolen all the time, so companies should make every effort to protect against it. Data encryption keeps consumers’ personal information safe, but businesses should consider physical data loss prevention methods. Another option is to use a private data center, but be aware that there is a big difference between the security levels of public and private cloud-based data centers.
It’s essential to cover all the bases and protect information throughout the entire data lifecycle of processing activities; from collecting data to its deletion, it is the company’s responsibility to maintain consumer privacy.
7. Accountability
A company can claim to have all the relevant security practices in place without actually doing so. Avoiding data protection puts consumers at risk of data loss, and the company still can claim they were doing everything right. It’s necessary to keep records of processing activities to prove that everything was policy compliant.
