Two Ways Your Customers’ Data Is One of Your Biggest Liabilities

It seems like everyone wants everyone else’s data. Day-to-day B2C companies are collecting purchase histories and personal information. B2B companies are trying to input as much data about their clients as possible to better predict sales patterns and the best way to upsell. Online services track everything from key inputs to how all of a user’s programs interconnect.

It’s almost impossible to avoid. But at the same time, your company has an obligation to avoid it. If you collect your customers’ information, data leaks or information theft become your responsibility. Even a potential break in security means you may have pay penalties outlined in your data security agreements and your reputation will suffer. Here are two specific dangers of data collection that your company needs to plan for:

1. You need active permission to collect data in the first place.

If you have a website or any presence online, you have to be compliant with the EU’s General Data Protection Regulation (GDPR). Even if you intend to only do business domestically, there’s a nearly 100% chance that someone from the EU will access your site, subscribe to your mailing list, or purchase a product. Any of these behaviors mean that you’re responsible for being compliant. That means asking for permission to collect data instead of just stating your plan in a data collection policy.

2. Hosting data locally puts a target on your back.

It’s not just legitimate companies that want data. Hackers, malicious actors, and forgotten traces of malware are constantly seeking out valuable targets that are less secure than everyone else. There are millions of viruses and instances of malware online, and they’re evolving every second. Instead of trying to secure your servers while trying to maintain a business full-time, get the data hosted in the cloud. A dedicated third-party service’s primary responsibility is to keep data protected. They can do more to reduce your data security liabilities than a full-time employee or even a small team. Even if you don’t do much business online, don’t store your own data.

Keeping track of all of your company’s liabilities and finding solutions needs to be part of your budget. Go to Tangram here to find the best ways to organize your company finances so you can address liabilities before they become problems.