January 22 to 27 marks Data Privacy Week, a week of shedding light on the importance of data privacy for businesses and their customers. It also is an opportune time for companies to review and upgrade their privacy policies and processes, especially as data security regulations have taken a leap in the past few years and will continue to become even stronger in 2024.
Before diving into data privacy trends, it's important to understand what data privacy is.
Data privacy refers to the use of individuals' data, ensuring that it is protected and accessed ethically through user consent. Many countries already have data privacy laws in place, protecting one's data and ensuring that the individual has control over how it is being used. For example, PIPEDA is Canada's federal private-sector data privacy law. It's one of several Canadian privacy laws that restrict how organizations collect and use private information.
What this means for businesses
In the digital age, where customers shop online, security measures are crucial to gaining customer trust. Data security can have high indirect costs for businesses - 70% of customers only shop with trustworthy brands. Furthermore, failure to comply with regulations can result in hefty fines for business, not to mention a decrease in customer trust.
2023 took a big leap forward for data price regulation globally, and it's going to tighten in 2024. Here are some trends to keep an eye out for:
Customers are increasingly demanding control of their data
Many new regulations are aimed at giving more power over to customers with their data. 9 out of 10 Americans consider online privacy a significant issue, and many feel they are not in control of their own data.
How can this be done? Adhering to data privacy regulations is essential, but it should be considered a baseline for consumer-mediated exchanges. Businesses can incorporate privacy-enhancing technologies (PETs), providing customers with more data control. Customers can control what data they give businesses permission to use and ensure they can opt-out anytime. With PETS, marketers can target specific audiences without collecting or sharing personal data, reducing the risk of data breaches or misuse.
Data sovereignty awareness is increasing
Data sovereignty refers to the idea that data collected from individuals within a country should be subject to the laws of that location. For example, when individuals utilize foreign applications, their data is handled with policies that apply to their country. Data sovereignty laws help ensure that user data is regulated by the government where those users are citizens. With the globalization of businesses, there have been new data sovereignty laws to protect their citizens' data.
For companies that operate across borders, this can be a confusing and time-consuming issue. However, those who fail to comply in each jurisdiction properly may be faced with large fines.
Failure to comply means big fines
With the rise of fintech applications, many customers have had their data exposed to various businesses. Whether it is credit card information, creditable banking information, or other personal information, customers trust that the platforms they use have strong security measures.
Unfortunately, data breaches are common and costly for businesses and customers. In 2023, over U.S 4 billion in fines were handed out to companies. These fines were due to security breaches caused by weak security measures and avoidable mistakes. PETs can help companies comply with privacy regulations by enhancing data security measures for businesses. PETs allow companies to get the data they need while preserving customer's privacy.
Conclusion
Leveraging data is important for businesses to help improve customer engagement and drive sales. For example, businesses can use data to understand customer needs and offer better solutions. Data can help with marketing efforts by seeing how customers engage with and respond to their marketing campaigns.
Although there are great benefits for businesses utilizing data, it's key that they have the right policies in place to ensure it is being used ethically and in accordance with the law. Adhering to appropriate consent procedures and retaining only essential data are among the best practices for handling data.
As an embedded finance platform that turns everyday purchases into customer engagement, Olive is serious about data privacy. To learn more about Olive, visit oliveltd.com.
Get started today
Request a free demo to see how Olive works, or reach out to an Olive specialist to learn more.