Three Privacy Concepts Every Business Professional Should Know
By Krystian Nawloka
Privacy is crucial to data management, as data is crucial to businesses.
Data is the cornerstone of every business. It provides valuable insight and information that drives decision-making and allows firms to measure their performance, track progress, and identify areas for improvement. By analyzing data, enterprises can identify patterns, trends, and customer preferences about their products, services, and consumers. Data plays a crucial role in helping businesses understand their customers, market effectively, and stay competitive in today's highly competitive world.
Companies must have good data management practices, especially when collecting and storing personal information. Strong privacy practices foster trust between individuals and organizations, as people are more likely to share their data if they believe it will be handled responsibly, used for the stated reason, and with respect for their privacy rights.
For these reasons, every business professional should know the basics of data privacy. This article addresses three essential privacy factors to help your organization safeguard personal data and enhance data management.
What’s personal data, and how can a privacy professional help my organization?
Personal information, or personally identifiable information (PII), refers to any data that can be used to identify, contact, or locate an individual like names and other unique identifiers such as email addresses, dates of birth, and phone numbers. As a business professional, it is essential to understand the various types of personal data to ensure privacy considerations are met when processing such data.
Consulting a privacy professional is advisable if personal data is involved. They are experts to advise on standards like data storage, management, and exchange principles. This ensures individuals’ rights are protected and companies don't put individuals at risk by sharing prohibited information.
A privacy professional is crucial in informing, advising, and supporting businesses to ensure compliance with privacy regulations and implementing Privacy by Design principles. Privacy professionals use their expertise to guarantee adherence to laws such as the General Data Protection Regulations (GDPR), the European Union’s privacy regulation. These regulations have historically been considered the global personal data privacy and protection standard.
They also help organizations implement and follow Generally Accepted Privacy Principles (GAPP), foundational personal data privacy principles used as the basis of many privacy policies.
Companies must take personal privacy protection seriously. A company that does not protect this information is at serious risk of fines. In 2023 alone, the EU fined organizations billions of euros for failure to comply with GDPR. Companies must prioritize personal data protection and comprehend diverse country-specific regulations to minimize financial risk.
Understanding the Basics of Privacy by Design
Privacy by Design is an approach, and part of GDPR, that prioritizes privacy at every stage of an activity's lifecycle, whether during the development or use of an application, product, or service.
Privacy by Design proactively identifies and mitigates privacy risks. It follows vital privacy principles such as purpose limitation, data minimization, and protection of personal information. Each company can tailor the approach to best fit their risk appetite, but the fundamental privacy by design principles should be applied.
Purpose limitation means data is collected for a specified, explicit, legitimate purpose. If you want to use the data for a new purpose, you may need to request consent again.
Data minimization involves limiting the collection of personal data to what is directly relevant and necessary for a specified purpose. An example of data minimization is deploying a survey that does not collect the names of the individuals who submitted it. This shows that you don’t always need personal data to achieve your purpose.
A McKinsey study reported, "About half of the consumer respondents said they are more likely to trust a company that asks only for information relevant to its products or that limits the amount of personal information requested.”
Business professionals should be able to identify when personal data is being used and know when to consult a privacy expert. The privacy professional will then guide the business professional through the privacy by design. This ensures the enterprise will have a compliant product and mitigates risks.
Here are some ways privacy by design can be used in different stages of an activity's lifecycle:
Concept development: Determine if personal data is being processed and consult a privacy professional.
Design and architecture: Identify all personal data associated with the activity and implement privacy principles such as data minimization and purpose limitation.
Development and build: Create privacy notices and build the application in compliance with regulations.
Test and deploy: Provide necessary privacy notices, ensure data protection, and implement access controls.
Support, upgrade, modify, and retire: Analyze changes that impact personal data, adhere to privacy notices, and complete data subject access requests. Purge data when applicable.
Implementing and documenting technical controls to protect data is part of privacy by design. For example, protecting personal information includes using proper encryption, enforcing access controls, and working with the security team to ensure adequate safeguards.
It's also essential to ensure that the activity has the functionality to adhere to Data Subject Access Requests, which include rights such as:
The right to access data
The right of recourse
The right of erasure
The right of portability
The right to object processing
The right not to be subjected to automated decision-making or profiling
The right to opt out of sales or marketing activities.
Good privacy practices can improve an organization’s data management strategy and bring value to the organization
When customers have access to and control their data, Harvard Business Review research shows that “these measures were perceived to effectively empower customers, giving them greater knowledge and the ability to have a say in business practices.” Empowered and trusting customers can increase business value.
Privacy can be a differentiator to an organization, and if not prioritized, it can also have substantial negative impacts from a customer's point of view. Customers may avoid a company if it doesn't respect their privacy and mistreats its customers. Business professionals should know that organizations with good privacy practices can significantly improve their data management strategy and offer cost savings. By adhering to privacy regulations, businesses can create greater value from the data they collect and do more with it.
Good privacy practices assist with data mapping practices, help with data retention, and allow businesses to define and classify how data elements are utilized. This ensures that only the necessary and relevant data is collected, stored, and used transparently and responsibly, reducing the risk of data breaches and unauthorized access. Trust from a privacy perspective relies on transparency.
This, in turn, helps with data mapping practices by providing a clear understanding of what data is being collected, where it is stored, and how it is used. Privacy also helps with data retention by allowing businesses to establish policies and procedures for how long data should be retained and when it should be securely deleted. Companies use privacy policies to set rules for using, sharing, and accessing data within the organization.
Privacy helps drive trust, quality, and value of data - enhancing analytics and ensuring decision-making is more accurate and fruitful. For example, when individuals have control over their personal information, they will be more confident that it will be protected and are more likely to provide accurate and complete data. This increased data sharing can give organizations a more comprehensive and precise picture of their customers or users, leading to more accurate and reliable analytics. In turn, this then leads to more informed decision-making.
Conclusion
Privacy is crucial for data management, and every business professional should have a basic understanding of it. Remember these three takeaways, and you can have a more significant impact on your business data and privacy practices:
Businesses can protect personal data while improving their data management strategy by identifying and considering essential privacy considerations.
Privacy professionals and Privacy by Design help businesses comply with privacy regulations throughout an activity's lifespan.
Good privacy practices can be a differentiator for businesses, enhancing analytics, driving trust, and improving data value.
By prioritizing privacy, businesses can follow the law and create greater value from the data they collect.