Protecting customer data is one of the most dynamic challenges for any business that aims to build the trust of its clients. According to a dark web market study, stolen data can be worth millions of dollars, posing an incentive to malicious actors and a potential danger for businesses that are too laid back with their cybersecurity measures. In this article, we present nine ways for companies to fortify their cybersecurity and protect customer data. What is customer data? Customer data is any information a customer provides the business with to conduct financial transactions or learn more about its products and services. It can range from the buyer’s full name to the type of their device. The most common customer data types include personal data, demographics (user characteristics), behavioral data, geographic data, engagement, and financial information. Most of these data types contain information that can be used to identify a person. Cybersecurity experts call this sort of data sensitive data — information that can cause harm to individuals or entities when in the hands of threat actors. Since companies need sensitive customer data to successfully provide goods and services to their customers, they also have an obligation to protect it from falling into the wrong hands. The customer’s information that businesses must protect include: Personal information (PI). Anything that can be used to identify a person, including their full name, email address, or phone number. Personally identifiable information (PII). Refers to information that can directly or indirectly identify a person. It can include Social Security number, biometric data, driver’s license number, and financial information. Sensitive personal information (SPI). This is a part of PII that can include even more sensitive data, such as racial or ethnic origin, sexual orientation, and even health information. Nonpublic personal information (NPI). This sensitive data type describes information that is usually not publicly accessible, such as bank and credit card numbers, credit reports, and financial transactions. How should companies protect customer data? Companies can take numerous measures to protect their customers’ data. Some may be easy to implement, while others may require vigilance and more effort. Here’s what businesses should do to safeguard their customer data. Collect only necessary data Collecting excessive data requires extra resources (such as data specialists or server space) and poses the risk of higher losses in case of a cyberattack. Therefore, businesses should only collect the data that is crucial for providing the service to the customer. Companies should also consider removing customer data after a certain period. Limit access to customer data Limited access to data reduces the risks of accidental (or intentional) leaks and helps keep the business’ cyberattack surface as small as possible. Additionally, customer data should be available only to employees whose responsibilities are directly tied to it (for example, data management or market research). Avoid data silos Storing customer data in silos can provide extra inconvenience as well as increased cyber risk. The lack of centralized data management practices makes it difficult to abide by compliance requirements listed in regulations, such as the General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA). In addition, different data silos may have differing security measures within the company, creating openings for malicious actors. While it may sound like a smart idea at first, relying on data silos can not only incur fines for complicated (or non-existent) compliance practices but also expose customer data to hackers and other threat actors looking to breach your systems. Enable two-factor authentication (2FA) 2FA is a basic security measure available on many major platforms (such as social media and banking). Enabling this feature for financial transactions and corporate customer databases can significantly improve the company’s cybersecurity. {SHORTCODES.blogRelatedArticles} Use strong encryption algorithms Data encryption is a default measure for any business that wants to protect its customer data. Strong encryption algorithms, such as the advanced encryption standard (AES), on servers or while data sharing can further enhance your company’s cybersecurity. And that’s not all — constant encryption protocol reviews, tests, and updates can help your business stay ahead of malicious actors, reducing the chances of potential cyberattacks. Deploy malware protection tools Malware protection tools (such as antivirus software) can protect your customers and employees. Many cyberattacks on businesses involve phishing emails or whaling and are often directed towards low-level company workers. To prevent them from accidentally installing malware on the company’s system, equip your systems with malware-scanning tools that can catch malicious files before leaking the company’s or customer’s data. In addition, consider using a VPN to safeguard your employees’ online connections. Emphasize password management Along with phishing emails, weak employee passwords can steer your business off the rails in seconds. In a brute-force attack, weak passwords are doomed to open the door for malicious actors, exposing your business and customer data to danger. Therefore, companies should educate employees on strong password requirements while maintaining a regular password change policy and enabling tools such as password managers. Perform regular security audits The best way to prepare for the zero-day (the day, when threat actors discover the system vulnerability and start exploiting it) is to keep practicing. Performing tests and cybersecurity audits will help your company pinpoint its cybersecurity strengths and weaknesses, strengthen system vulnerabilities, and predict potential attack points. While no one hopes to experience a cyberattack, preparing for one can help your business develop better solutions for customer data protection. Ensure compliance with data protection laws The GDPR, CCPA, and other data protection laws exist to ensure the protection of personal data. Customer data is also a part of these regulations, which means businesses must thoroughly understand these laws and comply with them accordingly. Failure to comply with data protection laws risks the company incurring hefty fines and exposes its customers to cyber threats. Customer data protection laws and regulations It’s obvious that ensuring data privacy is important not only in the business sector but in our everyday lives, too. That’s why various governments and political entities have taken to their hands to protect users’ data through certain laws and regulations. Here are the best-known data protection laws in terms of customer data protection. The General Data Protection Regulation (GDPR). This law applies to all companies that process the personal data of individuals residing in the European Union (EU), regardless of the location of the company’s headquarters. It states that companies must obtain consent before using customer data, implement data protection measures from the onset of designing systems and services, and notify authorities within 72 hours of discovering a data breach. In addition, according to the GDPR, customers have a right to access, correct, delete, and restrict the processing of their personal data. The California Consumer Privacy Act (CCPA). The CCPA applies to businesses that collect personal data from California residents and meet certain thresholds (such as earning an annual revenue of $25 million or more and having more than 50,000 customers). The CCPA allows consumers to have the right to know what personal data is being collected and how it is used, request deletion of their data, and opt out of the sale of their personal data. Additionally, the Act prohibits businesses from discriminating against consumers who want to exercise their CCPA rights. The Health Insurance Portability and Accountability Act (HIPAA). This law is oriented towards healthcare and health service providers and regulates Protected health information (PHI). According to HIPPA, healthcare providers must ensure and protect the privacy of individual medical records, set optimal standards for access control, audit controls, and data encryption of PHI, and notify the involved parties (affected individuals, the Secretary of Health and Human Services, and in some cases, the media) about potential PHI data breaches. The Children’s Online Privacy Protection Act (COPPA). COPPA applies to websites and online services whose target audience includes children under 13. This Act requires businesses to get verifiable parental consent before collecting, using, or disclosing personal information from children under 13. It also requires a clear privacy policy detailing the types of data collected and its usage. The Personal Data Protection Act (PDPA). The PDPA applies to all private sector organizations in Singapore that collect, use, or disclose personal data. Like the GDPR and CCPA, it requires businesses to obtain consent from individuals before collecting, using, or disclosing their personal data and to provide reasonable security measures to protect it. Additionally, under the PDPA, individuals have the right to request access to and correct personal data. The Brazil General Data Protection Law (LGPD). The LGPD applies to any organization, public or private, that processes the personal data of individuals in Brazil. Like the GDPR, it protects individuals’ rights to access, correct, and delete their personal data and requires businesses to notify the authorities of potential data breaches. Moreover, the LGPD forces businesses to employ data protection officers (DPOs) who are responsible for overseeing data protection activities. The three main data protection policies include data security (protecting data from accidental or intentional damage), data availability (quick restoration of data in case of damage or loss), and access control (the ability to ensure that data is accessible to those who actually need it). These data protection policies are the basic focus of most data protection strategies. ), }, { question: ‘Why is protecting customer data important?’, answer: ( Protecting customer data is important because data is one of the most valuable assets on the internet. In the wrong hands, sensitive data can ruin lives, cause financial instability, and even cause political upheaval. That’s why data protection regulations and laws exist, and that’s why it’s important to ensure that businesses protect their customer data.
For businesses, failing to protect customer data can result in fines and other legal repercussions, loss of trust, financial loss, exposure to cyber threats, and disturbance in operational efficiency.
