When collecting user data, you always have to be careful about the way you do it. Data collection has become an absolute must for modern businesses. Just think that, according to Gartner, by year-end 2024, over 80% of organizations worldwide will face modern privacy and data protection requirements.
Data protection requirements will not hurt your business metrics. On the contrary, they will protect your brand's reputation and build relationships of trust with your consumers. With the right technology in place, your company can turn a compliance obstacle into a business opportunity. Carry on reading to discover why these legislations exist and why they can be a benefit for your business.
What is privacy compliance and why is it important?
Let’s talk about compliance
In general, compliance means conforming to a rule, such as a specification, policy, or standard. Data compliance is regulated by data privacy laws such as the GDPR or the CCPA.
The first Data Protection Act was enacted in 1988 and was designed to protect personal data stored on computers. The Data Protection Act 1988 was replaced by the current EU General Data Protection Regulation (GDPR) in 2016, which aims at regulating users' personal data in a stricter way than the first legislation.
So the GDPR, the current data protection law in Europe, regulates the collection and processing of personal data from the European Union residents.
The first similar law that was approved in the U.S. was the California Consumer Privacy Act (CCPA). The CCPA seeks to protect unauthorized access to PII (Personally Identifiable Information).
Data protection regulation will be worldwide and it will impact the vast majority of people. Gartner estimates that, by 2024, 75% of the world’s population will have its personal information covered under modern privacy regulations.
Why should we consider compliance as an important matter?
The main reason is fines. Whatever the size of the data breach is, data privacy laws such as the European GDPR or the American CCPA are designed to intervene when consumer data privacy rights are not respected.
But now let's get to the heart of the matter and let’s see what are the benefits of complying with data privacy laws.
Three benefits of complying with data protection regulations for your business
Although you may sometimes see complying with data privacy laws as an obstacle or a hassle for your business, there are actually benefits to it. And this is not just a question about reduced penalties or data breaches. Investing in good, compliant data collection solutions has also proven to increase profits.
You want to learn more? Let's look at three benefits of data protection act here below:
1 - Build trust with your prospects
What if we told you that privacy regulations are an opportunity to build customer loyalty? Inform your customers about how their data is collected and used, the length of time it is kept, the purpose for which it is collected, and the people who have access to it, and they will be grateful.
There is only one key to success here: transparency. After all, transparency always comes first if you want to create a relationship which is based on trust.
It will come as no surprise to you to learn that users are increasingly looking for companies with privacy practices that are above board, while they pay more and more attention to those with rogue privacy practices.
Around 70% have decided not to go through with a purchase because maybe they don’t feel comfortable about the way their personal data is used. Others cancelled a service or stopped buying a product from a supplier because of concerns about privacy. - Privacy Made Positive™ research, 2021
2 - Better database management
Being compliant with data protection laws also allows you to manage better quality data. In fact, the GDPR and the CCPA both require companies to know exactly what sensitive data they collect and to explain how they use that sensitive data which would lead to a better database.
Furthermore, better business practices will result in collecting less, but better quality data. In a nutshell, better management of user data results in a 'cleaner' and more targeted database where there will only be relevant leads and customers. And if that's not enough, knowing your audience will allow you to adapt your marketing approach accordingly which will result in an increased ROI.
3 - Improve your brand image
Place the customer at the core of your strategy. Transparent and compliant data practices can improve brand image. Data protection laws such as the GDPR or the CCPA should be integrated into your company's brand image, through bespoke compliant data collection platforms, to define an effective communication strategy with your customers.
It is a matter of making it clear that the company is not only complying with the law, but also cares about the privacy of its users, who are seen not only as consumers but also as interested parties in the processing of their sensitive data.
What could happen if you breach data regulations? In addition to the risk of receiving severe penalties, your company's reputation could take a nosedive, as it would give customers the impression that your company is incapable of ensuring reliability and safety.
And once the damage has been done on such a big scale, it is not easy to fix. So, better safe than sorry...
Wherever your business is based and whatever legislation you have to comply with, Didomi is constantly working to help you collect, store and synchronise consent in accordance with your country of origin.
How to comply with data privacy laws?
Now let's get down to business: is your company in compliance with data protection laws?
Your company can be considered compliant if it meets all the principles required by data protection law. Find out what the legislation is in your country and make sure you follow all the principles required for compliance.
Do you need help? We are able to give you some compliance advice where both you and your users will benefit!
All companies should be concerned about how they collect, store and use user data. Good data management ensures user engagement with your company and a better reputation for your brand. Better privacy practices also allow to avoid high fines from data privacy regulations.
But how to comply with data privacy laws? At Didomi we help companies put their users in control of their personal data. To do so, we offer a consent and preference management technology which enables companies to comply with data privacy laws, allowing them to:
Build real-time, customer-friendly interfaces to inform their users about the data collected, and allowing them to personalize their consent choices and preferences;
Demonstrate robust data practices to users and regulators thanks to a clear data inventory that allows for GDPR & CCPA consumer requests;
Effectively collect, store, manage and provide proof of user consent across digital assets and physical data collection points.
97% of companies have seen benefits like a competitive advantage or investor appeal from investing in privacy (Cisco 2019 Consumer Privacy Survey). Hence the importance of privacy compliance for every business.
Don't hesitate to get in touch with one of our GDPR or CCPA experts to set up a quick plan to ensure full compliance.