Fun fact: 81% of consumers believe that how a company handles their personal data is a direct reflection of how much they value their customers. Companies that prioritize the security of their client’s information not only protect customer data but also build trust and loyalty. Conversely, customers who fall victim to data breaches due to inadequate protection are unlikely to remain loyal.
This underscores the importance of implementing strong data protection measures. But how can you effectively keep your customer data safe, and what threats should you be aware of? Stay tuned to learn!
What is customer data protection?
Customer data protection refers to a set of strategies designed to ensure that your customers’ information is kept safe within your organization. This involves implementing internal policies, adopting cybersecurity measures, and complying with legal regulations. Customer data typically includes:
- Contact information (name, email address, phone number)
- Demographic information (age, gender, address)
- Behavioral data (purchase history, browsing history)
- Financial information (payment details)
- Interaction data (customer service interactions, communication preferences)
Protected data is a crucial driver of customer trust. When customers are confident that their data is secure, they are more likely to remain loyal to your brand. This is why businesses place such a high priority on data protection. But what other goals does customer data protection aim to achieve?
Aligning user data protection with business goals
When implementing protective measures within your company, it’s essential to clearly understand why you’re doing this. Here are the most common business goals that many organizations pursue through customer data protection:
- Compliance as a competitive advantage: Companies that maintain legal compliance can position themselves as trustworthy partners, standing out among competitors.
- Customer trust and loyalty: Consumers are more likely to buy from your brand if they know their data is safe.
- Preventing financial losses: Cyberattacks can cause massive damage to both business operations and finances.
- Long-term, sustainable growth: Secure data usage enhances marketing efforts, refines product offerings, and improves customer service.
Protecting customer data is highly beneficial and certainly worth the investment. In the next section, we’ll dive deeper into the topic and explain the types of customer data that need protection, as each type may require specific customer data compliance or security measures.
Four types of customer data to protect
When customers interact with businesses, they share various types of information about themselves, depending on the products and services a company offers. There are four main types of customer data that are crucial to protect: Personal Identifiable Information (PII), Personal Health Information (PHI), Financial Information, and Behavioral Data. Next, we’ll explain what each type includes and the critical measures needed to protect them.
Personal Identifiable Information (PII)
PII is any information that can help identify a person. It can include obvious identifiers like names and Social Security numbers, as well as more indirect data like IP addresses or login credentials.
PII is at risk of identity theft, and protecting it is necessary to comply with regulations like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). Later on, we’ll provide more information on these regulations.
Personal Health Information (PHI)
PHI refers to information related to an individual’s health status, medical history, or healthcare services that have been provided to them. This includes medical records, insurance information, and treatment plans.
PHI is highly sensitive and is protected by laws like the Health Insurance Portability and Accountability Act (HIPAA). In the event of data breaches involving PHI, a company can face severe legal penalties, not to mention a significant loss of trust from patients.
Financial Information
Credit card numbers, bank account details, payment history, and income data all fall under financial information. This type of data is a primary target of cyberattacks and can lead to significant financial losses for both customers and companies.
Financial data protection is governed by regulations like the PCI DSS (Payment Card Industry Data Security Standard).
Behavioral Data
Behavioral data refers to information about how your customers interact with your brand. This includes browsing history, purchase patterns, and interactions with marketing materials. Behavioral data is used to improve the customer experience through personalization, and it must be protected like other types of customer data to avoid data privacy violations.
Overall, regardless of the type of data, customer data protection is essential for businesses. It’s not just about keeping your customers loyal and your company competitive, but also about avoiding the serious consequences of poor data protection.
What are the dangers of poor consumer data protection?
Unprotected or poorly protected customer data poses significant risks for both clients and businesses. Understanding these risks is essential for establishing effective data protection methods.
Identity theft
One of the dangers posed to your customers is the risk that cybercriminals will steal their identities and use them for unauthorized financial transactions, credit fraud, and other forms of identity theft. For businesses, such breaches can result in costly compensation claims and a significant loss of customer trust.
For example, in 2017, a data breach at Equifax led to the identity theft of 148 million customers, and the company was required to pay up to $700 million in compensation.
Legal issues
Strict data protection laws like GDPR and CCPA impose legal repercussions on businesses responsible for customer data loss or violations. A relevant example is the case of Google in Spain, where the Spanish Data Protection Agency (AEPD) ordered Google to remove links to certain personal data under the “Right to be Forgotten” ruling.
Financial penalties
Financial penalties depend on the laws that regulate customer data protection and the severity of the violation. For example, the personal data of more than 400,000 British Airways customers was exposed due to a data breach in 2018, resulting in a £20 million fine under GDPR.
Reputation loss
Companies that fail to protect customer data can significantly damage their reputation. In 2018, it was revealed that the political consulting firm Cambridge Analytica had collected the personal data of around 50 million Facebook users without their consent through a third-party app. The company later used this data to create detailed psychological profiles for targeted political advertising during the 2016 U.S. presidential election.
The scandal had a massive impact on Facebook’s reputation and even led to the #DeleteFacebook movement, where a large number of users and public figures called for others to delete their Facebook accounts in protest.
As you can see, the consequences can be quite serious and may even jeopardize your business’s future. One of the key factors in ensuring customer data security and maintaining trust with your customers is compliance with certain laws and regulations. But which ones must you comply with?
What customer data protection regulations should your help desk have?
Every day, our platform migrates large volumes of customer data between help desks, and we understand the potential risks if this information is not properly safeguarded. Given the sensitive nature of the data involved, it’s crucial to adhere to the regulations designed to protect it.
The key regulation list that your help desk must comply with to ensure data is handled securely and responsibly.
- HIPAA Compliance
- CCPA
- GDPR
- FERPA
- FCRA
- LGPD
Let’s go into more detail on each data protection regulation.
HIPAA Compliance
The Health Insurance Portability and Accountability Act (HIPAA) aims to protect PHI, and all companies in the healthcare industry must comply with it.
Key provisions of HIPAA:
- Privacy rule: Protects patients’ health information and gives them rights over their data.
- Security rule: Requires safeguards to keep electronic health data secure.
- Breach notification rule: You must notify patients and authorities if there’s a data breach.
CCPA
The California Consumer Privacy Act (CCPA) is designed to enhance privacy rights and consumer protection for residents of California.
Key provisions of CCPA:
- Right to know: Consumers can find out what data is collected and how it’s used.
- Right to delete: Consumers can ask you to delete their data.
- Right to opt-out: Consumers can stop their data from being sold to others.
- Non-discrimination: You can’t treat consumers unfairly if they use their CCPA rights.
GDPR
The General Data Protection Regulation (GDPR) protects the privacy and personal data of European Union (EU) citizens and regulates the transfer of their personal data outside the EU.
Key provisions of GDPR:
- Transparency: Be clear about why and how you’re using personal data.
- Data minimization: Only collect what you need.
- Consent: Get clear permission before using someone’s data.
- Right to access and erasure: People can see their data and ask to have it deleted.
- Built-in privacy: Design your systems with data protection in mind from the start.
FERPA
FERPA (Family Educational Rights and Privacy Act) ensures that educational institutions in the United States handle student data responsibly, and grants students and parents the right to access, amend, and control the disclosure of educational records.
Key provisions of FERPA:
- Access to records: Students and parents can see the student’s records.
- Right to correct: They can ask to fix any mistakes in the records.
- Sharing control: Schools need permission to share student information.
FCRA
FCRA (Fair Credit Reporting Act) is a U.S. law that protects the accuracy and privacy of consumers’ credit information.
Key provisions of FCRA:
- Accuracy: Credit reports must be correct and used properly.
- Dispute right: Consumers can challenge incorrect information on their credit reports.
- Notice of denial: If a credit report leads to a denial (like for a loan), the consumer must be informed.
LGPD
The Lei Geral de Proteção de Dados (LGPD) is Brazil’s law, which regulates the processing of personal data of individuals in Brazil.
Key provisions of LGPD:
- Legal basis: Data can only be processed for specific, legitimate reasons.
- Data subject rights: Individuals can access, correct, or delete their data.
- Breach notification: Notify authorities and individuals if data is breached.
- Data protection officer: Appoint someone to oversee data protection.
Which regulations you need to comply with depends on the type of customer data you use, your industry, and the country your customers reside in. While these regulations help your business use customer data responsibly, there are also other methods and requirements that are important for effective customer data protection. And we’ll share the main ones with you in the next section.
Data protection tips: How do companies protect customer data?
Compliance is not the only way to keep your customer data safe. There are specific steps every company needs to take to process data securely without compromising customer data privacy. So, here’s a roadmap to help you ensure customer data protection best practices are followed:
- Map your data by identifying where customer information is stored, how it flows through your systems, and who has access to it.
- Define your data security policies to establish guidelines on handling, storing, and protecting data in alignment with industry standards.
- Train employees on data security practices to ensure they can recognize threats and handle sensitive information correctly.
- Limit data access by implementing role-based controls, ensuring only authorized personnel can access sensitive information.
- Evaluate your vendors to verify that third-party partners comply with your data protection standards. For example, at Help Desk Migration, we comply with stringent security protocols as outlined in our Security Policy, and as of June, we have achieved SOC 2 Type 1 certification. This verifies that we meet rigorous standards for managing customer data securely and ensuring privacy.
- Encrypt sensitive information to protect data both at rest and in transit from unauthorized access.
- Update and patch software regularly to close vulnerabilities that could be exploited by attackers.
- Eliminate data silos by integrating systems across your organization for consistent and secure data management.
- Redact and mask sensitive data to protect information when it is displayed, shared, or used in non-secure environments.
- Conduct regular security audits to assess and improve the effectiveness of your data protection measures.
Conclusion: Secure Your Customer Data for a Better Future
So, protecting customer data is not just a regulatory requirement—it’s a fundamental part of building customer trust and ensuring long-term business success. However, data protection doesn’t stop with internal processes—it extends to every aspect of how you handle customer data, including during migration between platforms.
Help Desk Migration specializes in securely transferring customer data between platforms, ensuring that your data remains protected throughout the process. With our SOC 2 Type 1 certification and commitment to stringent security protocols, we provide a reliable solution that safeguards your data while facilitating a smooth transition.
Ready to see how secure and seamless your data migration can be? Try our free trial today and experience the difference for yourself.