Defining data – the difference between data privacy, data security and data protection

There is no shortage of issues that can inspire sleepless nights for business leaders. Talent shortages, regulatory pressures, shrinking budgets and tariff wars are just a handful of the agenda items that can have even the most experienced of managers staring at the bedroom ceiling at 3am. For all those concerns though, a modern-day threat has emerged that is striking fear into executive offices and boardrooms around the world – the data breach.

For proof of the devastating toll such an event can take, look no further than the case of 23andMe¹, the once high-flying DNA testing company that is facing a Chapter 11 bankruptcy filing on the back of a massive data breach in 2023². Having processed DNA samples from more than 12 million customers worldwide³, the company is facing a fine of almost $6 million after an incident where unauthorized access to genetic information occurred.

While the 23andMe case has unique elements, the reality is cybercrime is big business. Research shows that cybercriminals reap about $1.5 trillion each year by hacking data systems, stealing user data and sometimes holding it for ransom⁴. That is clearly a concern but what is equally concerning is how many businesses still fail to understand even the most basic aspects of the data security world.

This extends to executives, managers and staff failing to understand basic definitions. While it is easy to throw around terms like data protection, data security and data privacy, a lot of people do so without truly understanding the differences between them. This article will rectify that and, in doing so, provide a guide for how your firm can avoid becoming the next 23andMe.

What is data privacy?

Data privacy refers to how personal and sensitive information is handled and shared by businesses and other organizations. Individuals have the right to control how their data is managed, with the concept of data privacy starting from before such information is gathered to when it is stored, used, archived or deleted. It focuses on the ethical and legal aspects of handling personal data and key aspects include consent, transparency and data minimization.

What is data security?

Data security refers to the actual measures, protocols and technologies that are implemented to protect digital information from unauthorized access, use or theft. This includes the likes of encryption, firewalls, authentication protocols and access controls, with the scale of measures taken depending on company size, sensitivity of data and regulatory requirements.

What is data protection?

Data protection refers to an organization’s ability to maintain data availability via backup systems so it can easily be restored. Losing critical data can be extremely costly for businesses, particularly for those that collect and store extensive amounts. Developing and deploying a data protection strategy is essential in the modern world, with specific actions including using different storage devices, creating cloud backups and, for larger organizations, considering a data warehouse.

Quick guide to data concepts

• Data privacy - ensures individuals have control over how their data is accessed, used or shared.
• Data security - implements measures to protect data against unauthorized access, use or destruction.
• Data protection - the use of backups systems to ensure data availability, preservation and restorability.

Tips for protecting customer data

Now that you have a clearer picture of data definitions, it is time to outline measures that businesses can take to ensure their customers’ data is not compromised.

1. Only collect necessary data: it is both simple and tempting to collect as much customer information as one can. After all, you never know when it may come in handy. However, restricting data collection to information that is necessary not only increases consumer confidence but decreases the external value of your data bank. For example, there is not a lot for hackers to gain from stealing a list of email addresses but there is plenty for them to like when those email addresses are accompanied by customer phone numbers, location data and household income.
   

   
2. Limit access to data: customer data plays a pivotal role for today’s businesses but it is worth asking exactly how many people need access to it. Every staff member who can log into a data storage device or analytics tool is effectively another point of vulnerability. Furthermore, handing access to more users means there is more chance that one of them will have a weak password and increase the chance of a brute-force attack.
3. Use password management tools: while we’re on the subject of passwords, did you know there are tools that create and store complex passwords? While most people use simple passwords because they are easier to remember, password management tools allow users to encrypt and store each password and considerably boost an organization’s cybersecurity. Encryption also makes passwords unreadable to anyone without an encryption key, meaning hackers reach a dead-end even if they manage to break into the password management tool.
4. Avoid data silos: cyber experts will tell you that data silos inevitably lead to poor data analysis. Well, we are here to tell you that they also lead to significant security vulnerabilities. When different pieces of data are stored in different locations, it increases the likelihood of data ending up in non-approved applications or even being lost. Developing a customer data management strategy is an excellent way to detail exactly where and how data is handled.
5. Invest in staff training: data protection is not a job for one person or team. It requires commitment from all areas of an organization, which is why it pays to invest in educating all employees about regulations, best practices and cybersecurity threats. Larger businesses should consider employing a Data Protection Officer to not only oversee protective measures but train colleagues, while there are multiple online resources and external providers that can help smaller firms tackle the challenge.

Conclusion

Customers put a lot of faith in businesses when they hand over their personal data so it is only fair that those businesses treat that data with the respect it deserves. Some companies may not yet have the most stringent of data security measures in place but the good news is it is never too late to change that.

Offshore partners might just be your secret weapon in the battle for ironclad data protection. Discover how outsourcing enhances data compliance by leveraging global talent for 24/7 monitoring and robust security measures.