Organizations collect and use personal data for a variety of purposes, often without considering the impact on data privacy. Individuals are increasingly more aware of how their data is being used and the lack of say they have over the process. Data privacy and protection regulations are in place around the world to protect consumers and stop their personal information from being misused.
By understanding the principles of data privacy and data protection, and how to comply with regulatory requirements, your organization can keep personal data confidential and secure.
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Table of Contents
- What is Data Privacy?
- What is Data Protection?
- What are Personally Identifiable Information and Protected Health Information?
- Why are Data Privacy and Data Protection Important?
- What is the GDPR?
- Complying with GDPR
- Benefits of Following Data Privacy and Protection Best Practices
- Work with a GDPR-Compliant Data Pipeline Solution
What is Data Privacy?
Data privacy is the concern over who can (and cannot) access sensitive data collected by your organization. By establishing who can work with sensitive data, you’re able to restrict access and control the flow of information.
What is Data Protection?
Data protection sounds similar to data privacy, but it is not the same. Data protection involves the policies, procedures, and solutions that you put in place to keep the data private and secure. Your organization must have a comprehensive strategy for data protection if you’re working with sensitive data.
What are Personally Identifiable Information and Protected Health Information?
Sensitive data typically covers two major categories: personally identifiable information (PII) and protected health information (PHI). This data contains personal information that can identify an individual, and it can cause problems if unauthorized parties access it. Your organization needs to go beyond standard data security when it involves PII or PHI to ensure that it’s not breached or abused.
Examples of PII include:
- Full names
- Driver’s license numbers
- Passport numbers
- Social security numbers
- Residential addresses
- IP addresses
- Race or ethnicity
- Geolocation data
- Email addresses
- Sexual orientation
- Bank account numbers
- Phone numbers
- Cookie IDs
- Facial photos
- Genetic information
- License plate numbers
- Advertising pixels
- Spiritual beliefs
Many PII data points are also PHI when this information relates to healthcare. PHI also includes:
- Hospital admittance and discharge dates
- Health insurance account numbers
- Medical record numbers
- Patients' relatives
As you can see, PII and PHI encompass a significant range of information that your organization probably uses in its daily business operations. It may be in customer relationship management (CRM) software, marketing tools, enterprise resource planning platforms, electronic health record solutions, data warehouses, data lakes, email inboxes, and databases throughout your company.
Why are Data Privacy and Data Protection Important?
Individuals have to share their personal data in many contexts, and sometimes you may collect it without their explicit consent. When organizations don’t have a plan in place for keeping this data private and secure, it can lead to many issues for employees, customers, partners, suppliers, and anyone else involved with the company.
Some of these problems are:
Identity theft: If an unauthorized entity gains access to a PII record that includes a date of birth, name, and social security number, then they could steal that person's identity. This could damage the credit and finances of the victim as the thief opens up accounts in their name, steals their tax refund, or hijacks their bank accounts. The financial impact of this situation is long-reaching — recovery from identity theft can be a multi-year process.
Data loss: You may end up losing important data in data breaches or mishandling. Depending on the type of information involved in the loss, this situation could be a minor inconvenience or a life-threatening predicament. For example, if you lose data from a sales lead form, you won’t be able to pursue that opportunity. But in healthcare environments, losing patient records can lead to treatment mistakes and a range of potentially fatal consequences.
Stolen data: PII and PHI may be at risk of theft for various purposes. For example, your competitors may want to access your product designs, research and development data, or information about your top-performing sales professionals.
Reputation damage: Word of data breaches spreads quickly across social media and the news, so your customers are likely to know if a breach has compromised their personal data. Your organization could suffer from a lack of trust, which can lead to lower revenue, employee turnover, issues with customer retention, and a loss of competitive advantages. Coming back from a major breach that has significantly disrupted individuals’ lives can be a challenge, and it’s not unheard of for companies to go bankrupt in the aftermath.
Regulatory fines: Data protection regulations may involve fines and other consequences if you cannot handle personal data properly. These fines can be significant, and some laws also impose criminal charges if the situation is severe enough.
Productivity loss: Dealing with data loss and poor data access control can make it difficult for employees to handle their daily tasks. If they can’t get the data they need from your organization’s systems, or it’s lost entirely, they may need to skip these tasks or redo work to get back on track.
Personal safety compromised: Some unauthorized entities are looking for personal data on specific individuals, such as home addresses and phone numbers. They could intend on stalking people, contacting them inappropriately, or performing other actions that can directly lead to personal harm.
By following data privacy and data protection best practices, you will reduce the likelihood of these situations occurring.
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What is the GDPR?
The General Data Protection Regulation (GDPR) in the European Union is one of the most well-known and strict data protection and privacy laws in the world. Whether or not your organization falls under the GDPR, this law offers an excellent foundation for establishing your data protection framework and strategy.
The 2018 legislation provides a comprehensive approach to improving data protection for personal data. This law, and others like it, involve a set of principles that guide its mission.
These principles include:
Lawfulness of personal data collection and use: You can only collect personal data for uses that are lawful and permissible.
Limiting the use of personal data: You have greater restrictions in place that control how you can use personal data.
Data collection transparency: You must be transparent about what data you’re collecting, what you plan on using it for, and how the individual can access their records or have them deleted.
Minimizing personal data collection: You should only collect the bare minimum of personal data that you need for a permissible purpose.
Maintaining accurate personal data records: The personal data you collect should be accurate.
Controlling personal data storage: You must store data in locations with the right level of access control and data security in place.
Maintaining personal data integrity: You must keep this data intact, secure, and private.
Accountability for personal data use: Your organization is accountable for what you do with this data, and you may receive fines and other consequences if it’s mishandled.
Similar data privacy laws in other regions and industries include the California Consumer Privacy Act (CCPA) and the Health Insurance Portability and Accountability Act (HIPAA).
GDPR Data Privacy Principles in Practice
So what do these principles look like in real-world scenarios? Some of the most important provisions of the GDPR are as follows:
Individuals affected by a data breach must receive a notification within 72 hours after your organization detects it.
You must receive consent before collecting data, and the terms of that consent must involve language that a layperson can understand.
If your organization sells personal data to third parties, you must identify those parties and explain how they’re going to use it.
If an individual covered under GDPR wants their data completely removed from your databases, they’re able to request this from your organization.
Your organization may need to create a Data Protection Officer role to oversee your personal data usage and protection.
You need a paper trail of how you use consumer data, who is accessing it, and other details related to the information so it’s available during an audit.
Ultimately, these provisions and others in the GDPR data privacy regulations focus on protecting EU citizen data and giving them greater control and transparency over what happens to their personal information.
Complying with GDPR
How can you set your organization up for success with GDPR and other data protection laws? The compliance process has many moving parts and requirements, so your best first step is to establish your current baseline.
How much personal data are you collecting, and where does your organization store or use it? The systems and workflows currently implemented may need overhauling to offer better data protection. For example, some PII may be in the Cloud with a third-party provider, or your business processes may collect far more user data than you need.
After you collect the personal data, how long are you holding onto it? If you keep it for too long, it is more likely to be involved in a data breach. You may need to change your data retention policies to account for this scenario.
What IT security do you have in place on systems that involve PII? These security solutions may not meet GDPR requirements, which could put personal data at risk and make you non-compliant.
Who in your organization do you allow to access personal data? How much of that data do they actually need to work with? Your current user access policies may be too broad regarding permissions. When you limit data access, you have greater control over personal information and can lower the risk of it being used inappropriately.
By considering these questions, you can identify weaknesses in your data protection strategy.
Benefits of Following Data Privacy and Protection Best Practices
Taking a data-centric approach to work with personal data is the right thing to do, but it also creates some business benefits:
Reduces the damage from data breaches: When you properly protect personal data and other sensitive information, you can stop attackers from accessing anything of value.
Improves customer trust: Since many consumers feel frustrated with the way corporations handle their personal data, you can improve the trust they have in your company when you show that data protection is important to you.
Acts as a differentiator: Being a data protection-centric organization also helps you stand out when compared to the competition.
Improves your organization’s ethics: Your brand values and ethics get a boost when you treat personal data with respect and consideration.
Work with a GDPR-Compliant Data Pipeline Solution
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A simple way to improve your organization’s data protection and data privacy is to work with solutions that are already GDPR compliant. Xplenty offers an Extract, Transform, Load (ETL) tool for building advanced data pipelines that keep personal data safe. Explore our privacy-centric solution with this 14-day demo.