The Importance of Data Privacy for Startups
Your startup company can sometimes be overwhelmed by an avalanche of data which may come from customer information, employee records, or operational metrics among many others. But you’ll need all these data to come up with improved strategies and business plans that can help you move forward. This goes without saying that data security should always be a business priority. In today’s digital age, data privacy is truly more important than simply acquiring them.
Cybercriminals freely roam online ‘phishing’ for potential victims. Startup companies remain a favorite target as data retrieved from their storages usually contain sensitive information about users and can be easily accessed with inexpensive systems in place. While many are already aware of the risks of sharing information online, it’s quite impossible to conduct your business without retrieving data via emails, sign-ups, and P2P file transfers.
To show you how data security and the lack thereof can affect your startup, here are some important things you should consider before you set up your data privacy systems:
Assume that there will always be risks.
Providing a secure system for your startup that prevents data breach shows how you want to protect your customers. Last year, businesses had to shell out an average of $3.6 million in legal fees after falling prey to cyber-attacks. Having this kind of ordeal with your startup can prove to be devastating so invest in good data management systems and secured servers early on. Try to minimize as much sensitive information you need from customers so that there is less data for you to manage. Another essential item to put in place is a company policy that imposes stiff penalties to those who would commit an internal breach. This way, you can ensure that all your employees are on board in taking data privacy seriously.
Data management reflects your brand reputation.
Being cautious about data privacy and protecting your users’ information speaks more about your brand than you think. Today’s consumers expect the highest quality from businesses including data protection before companies earn their trust. Not being mindful of your customers’ concerns about personal information can entail dire consequences including an average 5% drop in stock price that will favor your competitors. Unfortunately, most startups don’t have the luxury to regain momentum after such a drop due to diminished trust, lost customers, and lost investors.
A startup company can impress its customers with rapid growth, but one lapse in data security can expose its vulnerability as well. Keeping your data protection and management systems up to date and continuously verifying the information is vital in keeping your business going. Another good idea is to hire a trusted vendor to collaborate with and eliminate the risks of having to store sensitive user data yourself. Startups can’t be too sure that they are safe from cyber-attacks and one single breach can prove to be catastrophic for business. Sourcing data management to a reliable third party contractor somehow minimizes your liabilities and can ensure better safety.
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