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The Importance of Data Privacy and Compliance

a man in a suit is holding a card with a padlock on it

No one wants their personal data out in the open, especially businesses housing the data about their clients. That’s why data privacy and compliance are incredibly important facets of collecting, understanding, and storing customer data.

What is data privacy?

Data privacy refers to the handling of personal information, also known in marketing as personally identifiable information (PII). This includes information like customers’:

  • Social security numbers
  • Medical and health records, also known as personal health information (PHI)
  • Financial data including credit card numbers and personal bank account information

Customers aren’t the only ones with PII that require care—data privacy also applies to certain data related to how a company operates. This includes financial information, research, and developmental and operational data.

While businesses deal with customer data all the time (it’s what helps you create personalized marketing campaigns, after all), there are certain pieces of customer information that require the utmost privacy and security.

Importance of data privacy

When using a CRM to collect and store customer information, data privacy is of the utmost importance. Data privacy policies protect against potential data security breaches involving customers, employees, and businesses.

In today’s day and age, cyber security and data privacy are top concerns. People want to ensure their private information stays private—no one wants their personal or sensitive information out in the open for all to see. Data breaches in your company that threaten sensitive customer information can hurt your business in a few ways.

First, you’re going to lose customers. If people don’t feel their information is safe with your company, they’ll steer clear of you altogether (and who can blame them?). A lack of data privacy policies will reflect negatively on your brand.

A lack of data privacy policies and systems can also open your business up to significant financial loss. There are numerous data privacy regulations and laws in place at state and federal levels that fine businesses that don’t comply with privacy policies. To protect your business from fines and potential lawsuits.

Major data privacy and compliance regulations

To protect your business against inadvertently breaking any data privacy laws, you should be aware of some of the major regulations in place today. 

General Data Protection Regulation (GDPR)

GDPR covers data privacy and protections for those living in the European Union (EU). This regulation gives EU citizens the right to access, rectify, or remove their data and grants the right to data portability.

If your business operates within the EU or you manage EU citizens’ personal data, you’re obligated to comply with GDPR and could be held liable for not complying with it.

California Consumer Privacy Act (CCPA)

The CCPA provides rights related to the collection, use, and sharing of personal customer data. It requires businesses to disclose data collection practices they employ and allows their customers to opt out of the sale of their data to third parties.

This act applies to organizations and businesses operating within California that have made over $25 million in revenue globally during the previous calendar year.

Health Insurance Portability and Accountability Act (HIPAA)

Arguably the most famous of data privacy acts is HIPAA, which applies to the disclosure of personal and protected health information of patients. Any businesses working within the healthcare industry must comply with this regulation by having robust security measures in place to protect patient data.

How do I stay in compliance with data regulations?

While the above regulations could seem ominous, there are plenty of ways to operate your business and maintain your CRM so you’re in compliance with them.

Be aware of local, state, and federal regulations

The best thing you can do to ensure you’re in compliance with data privacy regulations is to be aware of them in the first place. When running your business, you should always research the regulations put in place at the federal and local levels. As we mentioned concerning the CCPA, some regulations only apply to businesses within certain states. As an added measure, it is usually recommended that you confirm with your legal council that you are in compliance with the regulations. 

Collect customer data ethically

Collecting customer data through ethical means is another way you can ensure your business stays in compliance with data privacy regulations. As discussed in previous posts, there are multiple ways to collect customer data in an ethical manner, including:

  • Interviews
  • Online analytics
  • Transactional data
  • Customer feedback
  • Observation
  • Public records

Integrate these requirements into your data collection processes

When you’re aware of the data privacy regulations in place, you can integrate their requirements into your data collection process. This way, you build a customer data collection process you know for sure is in compliance with the regulations affecting your business. Not only does this keep you from facing any fines or lawsuits, but it gives you peace of mind.

Keep data secure with Nutshell CRM

Nutshell’s all-in-one CRM system makes customer data collection and data privacy compliance stress-free. Nutshell keeps your data secure and private—our stance is that you own your data. Our CRM is equipped with the tools you need to remain in compliance with privacy regulations like GDPR
Learn more about how Nutshell can help you collect customer data efficiently and ethically by getting in touch with your friends at Nutshell and starting a free trial of our intuitive CRM today.

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