As more and more of our data gets digitized, our reliance on locked filing cabinets and safety deposits in the banks have diminished. With an even greater technological shift triggered by the coronavirus pandemic, the importance of the safekeeping of our data has never been more important, while the need only keeps on growing.
For an individual as well as a company, the stakes are quite high when it comes to keeping the company’s database secure, as seen from the Facebook(now known as Meta) data breach in 2019, when the company was directed by the US Federal Trade Commission(FTC) to pay a hefty fine of 5 billion dollars to settle privacy concerns.
What is a Database?
In simple terms, a database is a collection of organized information, consisting of multiple tables including showcasing multiple fields. For example, in a company’s database, their tables may consist of information on customer/client, employees, financial records, etc. Today, nearly every company maintains their databases to store such information using database management systems, such as MySQL, Microsoft Access, FileMaker Pro, etc. By storing such information on the mentioned database management systems, companies are able to easily sort out the information and manipulate it as required.
Database Privacy and Database Security: Are they the same?
There is a common misconception that database privacy and database security are the same. Though both those terms overlap to a great extent, their roles certainly differ. For example, encryption, which is a data security tool, assists in ensuring data privacy. An essential difference between the two is that privacy is about control and how we are able to authorize the access to the database. On the other hand, security is more about how the database is protected against malicious threats. Despite these differences, both privacy and protection are used collectively.
Importance of Database Privacy
A database is usually encrypted, and that database would be considered private, but that doesn’t guarantee that it is secure. And today, encryption alone is not enough to protect the databases from a hacker breaching or using a different encryption algorithm to make it unreadable, which would explain why digital privacy has become a national talking point. Big corporations, policy makers, and individuals are becoming increasingly aware of the depth and complexities that arise when maintaining the privacy of their databases.
For corporations, database privacy is a foundational element of building and maintaining trusts among its customers. According to a study on cybersecurity done by IBM, 75% of customers won’t even consider purchasing products of companies that they think won’t keep their personal information secure and private. Considering the implications of data breaches, the customer’s behaviour is justified. So why is it important to maintain database privacy?
- To Meet Legal Requirements
According to a January 2021 data, provided by Morrison Foerster, there are about 133 jurisdictions across the globe which have data privacy laws in place. Data privacy laws such as EU’s digital privacy legislation, The General Data Protection Regulation(GDPR) have been enacted to place strong safeguards for the privacy of individual’s data and to bring back more control to the individuals. By not meeting the requirements placed by such regulations, companies can face millions of dollars worth of fines and up to 20 years of penalties, with the possibilities of them being even higher. Even for not complying with their own privacy policies, the companies may end up losing valuable business relationships with their customers and clients.
- To Protect Business and it’s Brand Value
Companies having strong security safeguards in place to protect personal data reduce the number of privacy breaches that may have to be faced with. Fewer privacy breached would mean that the effect of customer trust is largely unhindered and hence the business loss would be negligible. This not only protects the business in the long term, but saves the fines, penalties, lawsuits and long-term financial consequences that company’s could be affected by after the data breach takes place.
According to a report by Forbes Insights, as a result of the privacy breaches, 46% of companies faced loss in terms of their reputation and brand value. Hence, the organizations focusing on transparency, and investing on maintaining the privacy of its customers, develop emotional connections with its customers and hence build up on it’s brand value altogether. This not only adds to a company’s long term business reputation, but provides an edge over its other competitors which do not uphold such database privacy standards.
- For Ethical Reasons, & Customer Trust
In order for a company to stay in business for the long term, it has to establish itself in a set code of ethics, or business ethics policies if you may call it. Having these in place showcases the company’s commitment towards maintaining database integrity and practices, and that the data of it’s customers or clients will not be used in ways that could harm them in any way, and only be used for the mentioned business purposes.
According to Ponemon Institute, in its study commissioned by Centrify, 70% of individuals affected by their personal information breach, lost their trust in the company that experienced data breaches and out of the lot, 33% discontinued their relationship with the company. The average loss that the company’s affected by customer turnover, experience business losses worth about $3.22 million, out of a sample data of 113 companies.
