Trust is a must in the digital and online economy. No customer would want to transact with businesses that cannot guarantee that they will receive the product they paid for. Similarly, customers need the assurance that their financial and personal details are kept private. 

Cases of data theft continue to increase and they are unlikely to hit a lull, let alone stop. The advent of large language models and generative artificial intelligence makes the data security problem even worse, as most users of these technologies readily share their information with AI services.

To ensure trust amid the aggravating cyber threat landscape, it is important to establish a system wherein transactions are completed without interruption and delays and private data is kept confidential and secure.

What Is Data Privacy Compliance?

Simply put, data privacy compliance is the ability to follow data privacy regulations. It is not the mere adoption of safety and security guidelines but the conformity to legal requirements involving data handling and protection. As cybercriminals become more aggressive and sophisticated, relying on voluntary data security strategies and solutions is no longer enough. It is important to be familiar with and in compliance with the applicable laws and regulatory requirements.

Some of the most important laws and regulations related to data security are as follows:

European Union General Data Protection Regulation (GDPR): Considered the strongest law on privacy and security in the world, the EU GDPR imposes strict data protection practices, including the requirement for anyone who collects data to obtain the explicit consent of the owner or producer of the data. The consequences for non-compliance include a fine of up to 20 million euros.

Health Insurance Portability and Accountability Act (HIPAA): This data protection law focuses on the health data of those who avail of the services of hospitals, clinics, and other healthcare establishments as well as those involved in health insurance and related businesses. It requires the implementation of reliable data protection mechanisms including encryption, access control, and breach alerts sent out to affected users.

California Consumer Privacy Act (CCPA): This state law empowers consumers to be aware of the data collected from them. It requires companies to present to customers all the data the companies have accumulated. Also, it compels businesses to provide a quick way to opt out of the data collection activities.

Personal Information Protection and Electronic Documents Act (PIPEDA): Regarded as the Canadian counterpart to GDPR, this law regulates personal data acquisition, utilization, and divulgence by private entities. It requires companies to get consent first before they can collect any personal data and respond to consumer requests for information about the data collected from them.

Payment Card Industry Data Security Standard (PCI DSS): This is not a law itself but is used as a basis for regulations on handling credit card transactions. Government agencies do not specifically impose it but major card brands adopt it as a compulsory standard.

Building and Maintaining Customer Trust

Data privacy is not the only requirement in establishing consumer trust. It is just one of the many factors crucial in reassuring customers that their money and data are safe. However, data privacy compliance serves as a vital piece in creating the impression that a company is indeed trustworthy and capable of securing its operations from cyber threats that can affect its customers directly or indirectly.

Here are the most notable ways by which data privacy compliance safeguards customer trust.

Serving as an Indicator of Legitimacy

Given the existence of strict laws on data privacy in different parts of the world, it is clear that governments, consumers, and even businesses themselves acknowledge the importance of privacy. Businesses that seek to operate legitimately will not treat this as an optional imposition but as a fundamental part of running a legal and reliable operation.

Companies that are unable to follow data privacy standards, especially legal requirements, are unlikely to be capable of offering quality products, services, and customer care. If they cannot properly secure the data they collect from consumers, there is no way they would be willing to face the complaints of customers who have been encumbered or harmed by their non-compliant business practices and inconsistent policies.

As the list of data privacy regulations above suggests, privacy is not just a matter of ethical consideration. It is a legal requirement. Businesses that refuse to enforce adequate data privacy and security measures cannot be expected to behave legally or legitimately.

Providing Crucial Protection Against Cyber Attacks

While cybercriminals often focus their attacks on businesses, consumers can end up getting directly or indirectly affected in the process. A data breach in an online retail business or marketplace, for example, can result in the leaking of customers’ sensitive information such as their credit card numbers and contacts.

Customers are usually helpless when an attack like this happens. They have entrusted their data to the business and they cannot do anything to rectify the problem once their data is already made accessible to the public or sold by hackers in the darknet. They might be observing data security practices religiously and using various tools to protect their sensitive information, but there’s nothing much they can do if the breach happens in the business they are dealing with.

Creating a Sense of Trustworthiness for Businesses Operating Internationally

Different countries have different data privacy and security standards and laws. This leads to issues in holding to account companies that are deemed to have violated data privacy standards. It complicates accountability as it muddies the determination of responsibility when imposing certain sets of rules in a specific jurisdiction.

As such, data privacy compliance provides a solid basis for addressing data privacy disputes. Companies that comply with the laws and standards imposed in a specific country will be held liable according to the prevailing regulations in that country. This assures customers that there are ways to hold erring businesses to account.

Minimizing Data-Related Risks

Moreover, compliance with data privacy standards means that companies only get to collect the data they need to conduct a legitimate function. This results in data minimization, which incidentally also means the reduction of cyber risks associated with data. If companies can only gather data deemed vital for the completion of important tasks and customers have control over what data they want to share, the chances of data attacks lessen, because companies can only retain minimal sensitive customer data.

In conclusion, data privacy compliance is more than just about keeping personal data private. It plays multiple roles that benefit businesses and customers alike. It serves as a critical first step in building a relationship of trust with customers. It also helps build an impression of trustworthiness because it shows that an organization is willing to submit to applicable regulations and legal requirements. Additionally, it sets the tone for the cybersecurity posture of an organization. An organization that cannot maintain data privacy is unlikely to be reliable in fending off other cyber threats.