Many small businesses are now aware of the importance of maintaining data security. However, not all companies pay close attention to customer data. Breaches that result in customer information being compromised are among the most expensive to deal with. For example, exposing credit card numbers, addresses, and names of customers could result in significant financial loss, reputation damages, and compliance issues. This means that your company might end up incurring as much as $4 million per incident of this nature.
Protecting customer data should be the central goal of your data security plans. Many small businesses are a favorite target of hackers because they don’t dedicate as many resources towards repelling potential threats. To avoid falling victim to data breaches, you should prioritize customer data security during daily business processes.
Involving customers In Your Data Security Plan
The good news is that you can implement specific steps towards keeping customer data safe (in light of the risks that your business might face online). More of your customers are becoming aware and concerned about their data privacy and security.
According to a recent Accenture study, 58% of respondents would switch half or more of their spending with a particular company if they felt that trust and personalization weren’t being taken seriously.
Another study revealed that customers are more concerned about data privacy than they are about losing their income. This is why implementing a robust data security plan (which also emphasizes customer data security) is critical for your business.
In general, your data security plan should have the following components that emphasize customer information safety:
1. A public and transparent policy that your customers will understand
The best way of protecting customer data is by having clearly established policies in place. Everyone within the organization should be aware of and should follow, such policies. In addition, your customers should be aware of how you collect, store, and use their information. You will find that customers are more willing and trusting of businesses that keep transparent data policies.
Many new laws such as CCPA and GDPR specify that companies need to disclose how customer information will be used. Having a transparent and easily accessible policy will make compliance with such regulations much easier to accomplish.
2. High-quality data
Your data security plan should also emphasize accuracy. High-quality data ensures that all customer records are up to date, have minimal errors, and are deleted when no longer in use.
3. Data security and authentication
Controlling access to customer information is also critical. Such data should be encrypted, backed up regularly, and access-controlled. This means that only relevant personnel should be able to use customer information for specific purposes within the business.
4. Clearly defined data retention periods
When collecting and storing customer data, you should have fixed periods for how long such information will be retained. Keeping data on your servers for endless periods will attract hackers and increase the cost of a potential breach. Only store customer information for as long as it is absolutely necessary.
Data Security Allows You to Keep Customer Data Safe
As it currently stands, most customers have minimal faith in businesses keeping their data safe. PwC released a survey that revealed how 85% of customers wouldn’t do business with a company that they believe has data security concerns. Having a data security plan is the best way of protecting customer information. As was previously discussed, such a plan should involve your customers so that you can build trust and tie up any vulnerability during the process.
In addition to protecting customer data, keeping information safe will also improve your bottom line. You will spend less on compliance costs, incur fewer fines, and attract more customers to your business.
Maintaining streamlined workflows when it comes to company data is also an excellent way of protecting customer information. When building a data security framework for your small business, make sure it has the following critical components:
- A data breach response plan
- Up to date with data and governance laws
- Support from senior leadership and key decision-makers
- Clear communication channels for responding to threats in real-time
Steps You Should Take to Protect Your Business Data
In order for you to protect customer data, you should begin by keeping your business data safe. By implementing data safeguards, developing trust with customers, and respecting privacy, you’ll be on the path towards keeping your customer information protected against hacks.
Here are specific steps you can take as you work towards this goal.
1. Encrypt all customer data
Make sure all customer data is encrypted using the latest technologies. You should also regularly update your encryption practices and patch up any loose ends that might result in a data breach.
PCI compliance is an excellent framework you can follow to protect customer data. PCI covers secure credit card processing techniques, and it stipulates various steps that help you protect credit card numbers, social security numbers, names, and addresses of customers.
2. Only collect and store what you need
The more data you collect, the more resources you’ll need to dedicate towards data security. You can save on high costs by only collecting what you need. You should also get rid of old data from your servers so that all information silos are lean and up to date.
3. Use strong passwords
As part of your access control plan, make sure you use strong passwords. Two-factor authentication is an excellent way of preventing unauthorized access from foreign devices- especially when it comes to customer data security.
4. Avoid transmitting data across unsecured networks
Only use encrypted networks when transmitting sensitive data. HTTPS encryption should be part of your standard procedure.
5. Keep employees involved
Finally, your employees play an important role in protecting company information. Make sure all your workers are trained on proper data handling and security procedures.
Ken Lynch is an enterprise software startup veteran, who has always been fascinated about what drives workers to work and how to make work more engaging. Ken founded Reciprocity to pursue just that. He has propelled Reciprocity’s success with this mission-based goal of engaging employees with the governance, risk, and compliance goals of their company in order to create more socially minded corporate citizens. Ken earned his BS in Computer Science and ElectricalEngineering from MIT.