Expert Insights on Navigating Data Privacy Compliance

Here we discuss the intricate world of data privacy compliance, including its history, challenges, and best practices. Understand the dynamic landscape of data privacy compliance and how to stay ahead.

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Investing in data privacy compliance is a non-negotiable for businesses handling personal data. Staying compliant shields you from potential lawsuits, hefty government fines, and reputational damage – all of which could cause significant financial losses for your organization.

What is data privacy compliance?

Data privacy compliance is the practice of aligning data handling, storage, and usage with established privacy laws. These regulations are designed to protect consumers’ personal information. Some of the most significant regulations include the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the United States. 

For example, even businesses that aren’t based in the EU – but collect data from EU residents – must comply with the GDPR, like honoring a person’s "right to be forgotten.”

 

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Complete user deletion requests at scale with Segment

 

A brief history of data privacy compliance

Data privacy compliance didn’t emerge overnight. It’s a response to the dramatic rise in the value of data, which began in the mid-1900s when companies and corporations started actively collecting, storing, and sorting people’s information (e.g., mailing lists, banking details).

With the rise of the internet, the focus was initially on “security” rather than “privacy.” However, this changed when companies like Google started leveraging user data to improve search results and advertising. Social media platforms further fueled this model, leading to sophisticated data-driven algorithms predicting consumer behavior.

In 2018, the EU’s General Data Protection Regulation (GDPR) went into effect, causing major changes in how companies handle personal data. The California Consumer Privacy Act (CCPA) in 2019 marked the first modern privacy legislation in the United States, followed by other states considering similar laws.

“By year-end 2024, Gartner predicts that 75% of the world’s population will have its personal data covered under modern privacy regulations,” said Nader Henein, VP Analyst at Gartner.

This underscores the global shift towards a more privacy-conscious society. Businesses must adapt and evolve, recognizing that data privacy protection is no longer a mere legal requirement but a fundamental aspect of building customer trust.

Best practices for maintaining compliance with your data privacy

With the right approach, compliance will become a seamless part of your business operations. Let’s explore some essential strategies to make data privacy compliance more achievable.

Prioritize first- and zero-party data

Unlike third-party data acquired from external sources, first-party data is gathered through direct interactions such as purchase history, website analytics, and customer support interactions. Recently, there’s also been an emphasis on zero-party data, or the data that customers explicitly provide your business (e.g., filling out a form or survey). 

Because zero- and first-party data is sourced directly, it’s the most accurate and relevant data you can have, which allows for enhanced personalization and better decision-making. It also aligns well with data privacy laws to minimize the risk of legal issues.

Here’s how to start focusing on collecting, managing, and using zero- and first-party data:

  • Gather data through your own channels: Use website forms, mobile apps, and customer support interactions to collect valuable insights about your customers.

  • Engage with surveys and feedback: Encourage customers to participate in surveys and provide incentives for feedback to enrich your first-party data set.

  • Implement a customer data platform (CDP): CDP unifies data from various sources into a centralized hub to improve accessibility and management for your team.

     

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Foster a culture of data privacy within your organization

Integrating data protection principles into every aspect of your business demonstrates a commitment to safeguarding your customers’ personal data, which builds trust and loyalty.

Here are some ways to start building data privacy compliance into your company culture:

  • Appoint a data privacy officer (DPO): A DPO oversees the data privacy strategy and ensures that the organization complies with relevant laws.

  • Educate and train all employees: Host regular training sessions – led by the DPO and designed for every employee, including senior leadership and executives – to ensure a team-wide commitment to data privacy.

  • Implement clear policies: With the Data Protection Officer’s guidance, develop an official data privacy policy that aligns with legal requirements, especially any industry-specific regulations like HIPAA for healthcare companies.

A culture of data privacy builds trust with your customers while ensuring regulatory compliance, further reinforcing your business’s reputation for trustworthiness.

Conduct regular audits of your data processing systems

Regularly audit how your business collects, stores, and uses data. This includes checking for compliance with data privacy laws, identifying vulnerabilities, and ensuring data handling practices align with your established policies.

Regular audits enable you to pinpoint potential issues before they become problems. Start auditing your organization’s approach to data management and privacy by following these steps:

  • Create a data audit schedule: Establish a routine for conducting audits, whether monthly, quarterly, or annually.

  • Implement clear guidelines: Establish official standards and criteria for what will be audited, such as data collection methods, storage security, and access controls.

  • Act on your findings quickly: After the audit, promptly address any identified issues or vulnerabilities to maintain compliance and security.

With a robust audit strategy, you can proactively protect your data. This helps minimize the risk of data breaches while strengthening your customers’ trust in your business.

Use a customer data platform (CDP) to store and transmit data securely

With a CDP like Segment, businesses have the benefit of automated data governance at scale. This means all the data that a CDP collects, cleans, and consolidates will adhere to the company’s predefined tracking plan (and any data that doesn’t will be immediately flagged for review). 

Segment also ensures that businesses are able to store and transmit data securely, with encryption both at rest and in transit. Here are a few things to look out for when considering a CDP’s security and privacy features:

IBM recently found that the global average cost of a data breach is over $4 million. A CDP enhances data security while improving data quality and accessibility. 

Expert note on data privacy compliance

In today’s complex digital landscape, complying with data privacy regulations is no longer just a legal necessity but a cornerstone of customer trust. With regulations like GDPR and CCPA, businesses must navigate a maze of requirements to ensure that they are handling customer data responsibly.

The stakes are incredibly high, and people are increasingly skeptical of businesses’ intentions with their data – in fact, our annual Personalization Report found that only 51% of consumers trust that companies will keep their data secure and private. 

Being proactive about data privacy, and automating key aspects of your strategy, is a must. Segment’s Privacy Portal helps businesses achieve this in several ways, like by:

  • Offering full visibility into the data lifecycle (to know what data is being collected, how it’s being used, and where it’s stored). 

  • Data privacy controls like automatic data discovery (which detects and classifies highly sensitive customer data), and  data masking to ensure only authorized individuals are able to access this information.

  • The ability to honor user suppression or deletion requests at scale. 

     

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Privacy controls in Segment

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Frequently asked questions

Some examples of data privacy laws include the General Data Protection Regulation (GDPR) in the European Union, the California Consumer Privacy Act (CCPA) in the United States, and the Personal Data Protection Act (PDPA) in Singapore.

First-party data is collected directly from the user by the organization they interact with, ensuring complete control and compliance.

Second-party data is shared between partners, usually with user consent, and requires clear agreements on usage.

Third-party data is purchased from outside sources, and businesses must ensure compliance through rigorous vetting of the data providers and adherence to relevant laws, which is not always easy.

Dat privacy regulations differ by region, and companies need to be aware of which laws they are beholden to. For instance, a U.S. based company would still need to comply with the GDPR if they had customers in the EU. Data privacy regulations can differ when it comes to:

  1. Consent requirements

  2. Data retention policies (e.g., the right to be forgotten)

  3. Data processing (e.g., collecting and storing data in the region where the customer resides).

Businesses can ensure compliance with data privacy laws by:

  • Implementing robust data governance policies

  • Conducting regular QA audits

  • Staying up to date on regional regulations

  • Investing in the right technologies to manage customer data and privacy at scale