Worldwide, on 2022 companies are planning to invest over US$1M on privacy initiatives, resulting in the fact that companies with higher revenues tend to invest larger sums. 1
Data protection regulations applies to all companies or entities that process personal data, regardless of their size. A few years ago, one of the main reasons to include privacy matters in corporate agendas was compliance with data protection regulations to avoid fines; now, the perspective has changed, and data is considered an asset and a competitive edge which needs to be addressed.
Business reasons to invest in personal data protection
1. Competitive and reputational matters: privacy is one of the current motives which drives consumer choices in the marketplace. Having data management programs synced with technical measures and high standards of data protection allow companies to build confidence in their stakeholders and become a more attractive player in the market.
A consumer privacy survey indicates that 84% of respondents are concerned about privacy. 2
2. Using data as an asset: Having quality information allows companies to make better decisions in corporate terms and reduces the chances of making mistakes, thus the value of personal information does not come just from their nature of “data”, but from the processing and utility that is given. Then, personal data becomes the main character of corporate projects, focus on, among others, digital transformation, data analytics, product development and even social responsibility projects, aimed at obtaining profits, increase the assets of companies and their partners.
“Organizations will be valued on their information portfolios” 3
3. Increase of the revenue: Companies reveal positive returns on their privacy investments, due to the agility and innovation that it represents. In 2020 a survey that covered 2,800 respondents in 13 countries showed that the companies spent over US1.2M on privacy protection while its return generates US 2.M. 4 In addition, more than 40% of companies are seeing benefits in at least double of their privacy spending, so it is profitable to make this kind of investment, since the cost-benefit ratio is favorable. 5
Companies that obtained competition benefits due to the development projects
focused on data protection increased their investments to 70% 6
4. Overall cost savings: data breaches may cause the loss of customers, impact productivity and damage company’s reputation, which lead to high costs to control and remediate the aftermath, cause a drop in their share prices, and expose companies to sanctions by personal data protection authorities. In addition, investment and business development opportunities are reduced, as a result of the investment of resources in remedying legal breaches and security breaches.
Data breach costs may rose from US 3.86 M to 4.24 M7
5 Cisco Data Privacy Benchmark 2020.
6 Cisco Privacy Maturity Benchmark 2020. Third survey made by the entity.
7 Cost of a Data Breach Report 2021.
By:
Martha Gaitán
Chair Compliance and Data Privacy
