What is data protection and why is it important?

4 Mins read
data protection

Most people wouldn’t broadcast their name, age, and physical address on a T-shirt or flyer. Nor would they post their bank statements on social media. Why not? Because it can be harmful to share personal data, especially without controlling how much is shared, why, and with whom.

Businesses use customer data to deliver their products and services more effectively. Data is useful for satisfying customers and personalizing services, and it helps businesses measure their performance and set goals. The ability to gather data and analyze it has revolutionized the way we live. But the problems occur with unauthorized access to that incredibly useful data.

What is Data Protection?

Data protection refers to the practice of safeguarding confidential and personal data using online and offline practices. It encompasses the political and legal issues of how individuals and organizations collect data and how it is stored and shared.

Businesses frequently store key information online, including customer details, loyalty scheme data, and transaction details. With more and more of our lives taking place online or aided by the internet, more data is transferred than ever before, faster than ever. Data protection is both increasingly challenging and increasingly important.

5G spells ultra-convenience, offering incredible download and upload speeds. However, the transfer speed itself can be a threat. The faster data can be transferred, the more quickly it can be stolen. Whereas IT or security systems may have had an opportunity to spot suspicious activity and pull the plug, 5G speeds could allow hackers and fraudsters to do more damage before IT can secure vulnerabilities.

Why is protecting data important?

When a business looks after data, its customers can feel confident about sharing transaction details and personal information. On the other hand, a business that is careless with people’s data fails to earn their trust or respect.

Data protection includes all measures to safeguard data, including people’s business transactions and financial statements. Those who want to steal data or compromise a business’s systems often do so to perpetrate fraud, including identity theft, or blackmail.

Identity Theft

With access to the right data, a fraudster can assume another person or entity’s identity. Such personal information might include date of birth, physical address, and an account number. With stolen data, it may be possible for a fraudster to withdraw money or make unauthorized transactions.

To minimize the risk of identity theft, staff should understand that there are scammers out there and learn how to spot suspicious emails. Phishing attempts, for example, often make urgent or time-sensitive demands and contain poor spelling and grammar. Staff should also look out for fake or deliberately misleading business names. Supposedly professional individuals who make contact via a free email address, such as Gmail, Yahoo, or Hotmail, are also waving a red flag. If you or a staff member are unsure of a contact’s identity, use Nuwber to confirm they are who they claim to be by typing their name in the search bar. Check if the information found matches the information presented by the contact. If it doesn’t – that person is probably a scammer.


In some cases, a criminal aims to use stolen data to hold a business to ransom. They typically demand a significant sum for the safe return of critical and/or confidential information.

The major challenges with ransom attacks are that a business can never be sure that they will get the data back, nor that it will not be transmitted, even if they pay; and even when a business achieves the return of its data, the loss of face, trust, and value can be crippling.

The best thing, of course, is not to get caught by a ransomware attack in the first place. Businesses can lower the chances of encountering a ransomware attack through staff training, so that employees can recognize suspicious communications quickly, avoid interactions with the perpetrators, and report the issue to the relevant personnel promptly.

Data Loss

The threat to data isn’t always posed by criminals. Human error accounts for a significant percentage of data loss. Staying logged in for too long, and accidental transfer or deletion are ways in which people unwittingly lose data. Despite being accidental, data loss caused by human error can lead to a business grinding to a halt and can significantly damage its reputation.

Minimize the risk of data loss by keeping staff up-to-date and trained with IT skills and implementing best practices for data protection. Restricting access by segmenting systems on the business network will also help. And frequent, effective backups on and off-site are always a good idea.

Customer and Client Trust

Few things will lose the trust of a customer like a data breach. According to a Businesswire article, about 8 out of 10 customers would stop engaging with a brand online following a data breach. While there are things a business can do to mitigate the impact, including responding immediately and being transparent about their practices, it’s best to take steps to avoid a data breach altogether.

Maintain and share a clear document expressing how your business protects data and how much it values the confidentiality of its customers. Also, keep in writing what steps are in place in the event of a data breach.

Protecting Business Partners

Small business owners frequently think that their firms are too small for hackers or other fraudsters to target them. However, hackers love small businesses because they tend to have less security than larger ones.

Avoid being the weak link in a chain by ensuring that you have optimized your security. Protect your business and your partners to ensure goodwill, peace of mind, and continued good business relationships.

The increase in remote working, augmented by the Covid-19 pandemic, has also increased the need for security. Way more people are working from home where security tends to be inferior to that used on-site. This gives hackers and scammers a potential vulnerability to target, so it’s vital that businesses provide their remote workers with information and tools.

We have a right to privacy. Our data should be safe and secure. It’s up to individuals and the businesses that store data to use best practices and all available tools to keep that data safely where it’s meant to be.

Read Next: Why protection of personal data is still important? Password manager tips.

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