While you might only think data protection applies to large organizations, it's essential for small businesses, as well. Hackers and other bad actors regularly target small businesses to steal sensitive data, making data protection a must-have for any organization. When you implement data protection strategies, you can ensure you maintain an excellent reputation, avoid operational downtime, keep your data secure, and guard your business against legal action.
Find out more about what data protection is and why it matters. You might also be interested in learning about the top risks of not having data protection and some of the top tips for implementing data protection strategies at your business.
What is data protection?
Data protection refers to the various processes and mechanisms designed to protect an organization's data from compromise, loss, theft, and corruption. By implementing data protection, organizations guard themselves and their customers against identity theft and phishing scams. Some of the main types of data organizations aim to protect include:
- Email addresses
- Phone numbers
- Medical information
- Bank and credit card details
- Home addresses
Why does data protection matter?
With the increasing reliance on the cloud and online transactions, many organizations are handling more and more data. Bad actors, outside an organization and inside of it, constantly look to compromise an organization's data security for their own ends. Data breaches often aim to steal information from a company, selling it to others, or using it to commit acts of fraud.
Since organizations handle a great deal of personal identifiable information (PII) from their customers, employees, and stakeholders, a data breach can do a great deal of harm. Some of the most potentially damaging effects come from data breaches that steal especially sensitive PII, such as social security numbers, driver's licenses, and passports. If a bad actor gets their hands on this information, they can do a significant amount of damage to an organization and anyone who's given the organization data.
Data protection for small businesses is especially important because data breaches and losses can end up costing a significant amount of money. When a company doesn't protect its sensitive information and allows data breaches to occur, it can take a reputational hit. As a result of this lost reputation, an organization can see a drop in revenue from dissatisfied customers. Organizations can also suffer from fines for not complying with security regulations, leading to financial strain a small business may not be able to handle.
What are GDPR and CCPA compliance?
Whenever you look into business data protection, you'll likely hear about the California Consumer Privacy Act (CCPA) and the European Union's General Data Protection Regulation (GDPR). These regulations make it so consumers have the right to know what information an organization is collecting from them, what information is sold or shared, and who their data is sold to or shared with. Both the CCPA and GDPR apply to small businesses, so it's important to comply with them.
What is PII?
PII covers various kinds of information, such as:
- Email addresses
- Personal identifiable financial information
- IP addresses
- Mailing addresses
- Social Security numbers
- Phone numbers
- Login IDs
- Social media posts
Since organizations handle various kinds of PII, they have to protect this information from falling into bad actors' hands. Typically, when a data breach occurs, the hacker will attempt to use stolen PII against the organization or sell it to others.
Typically, PII is separated into two categories — non-sensitive PII and sensitive PII. Non-sensitive PII refers to information people can quickly collect from public records, such as zip codes, ethnicity, or gender. Since it's non-sensitive, data breaches that only unearth this data typically don't result in much damage to individuals. In contrast, sensitive PII, such as social security numbers, passports, and driver's licenses, can all do significant damage to individuals when it's stolen.
Understanding the risks of not having data protection
Sometimes, small and medium-sized businesses think they don't face much risk from data breaches. They usually believe that bad actors are more likely to target larger organizations. However, this thinking doesn't stand up to reality, as 43% of data breaches affect small and medium-sized businesses. While large businesses face the most data breaches, small and medium ones still face a significant number of breaches, making data protection a must-have for all organizations.
When organizations don't take their data security risks seriously, they open themselves up to several risks. Review some of the primary risks of not having data protection below:
1. Credibility issues
One of the biggest risks of not securing your data is losing credibility among your clients and customers. Even when a data breach doesn't specifically affect a customer, they'll likely have less trust in the organization to protect their sensitive information in the future. Due to this loss of trust, a significant portion of customers will likely stop doing business with the organization and go to someone else for their needs.
Though some customers won't leave, they may share their dissatisfaction with the organization on social media or in conversations. Alongside negative press from users, an organization can face a news cycle discussing the breach and making more people aware of it. Negative stories from news organizations and customers can end up turning potential customers away from a company. Simply put, customers and clients want their data protected, and they'll go to a business with a better data security reputation if your business fails to protect their data.
2. Financial losses
A lack of data protection can result in organizations suffering from financial losses. A report in 2021 found that the average costs of data breaches reached $4.24 million, with this finding representing a 10% increase from the previous year. This same report found that this average cost rises to $4.96 million when an organization relies on remote workers. Given the impact these financial losses could have on an organization, data protection is essential.
The high costs of data breaches tend to come from various actions a company might have to take after a data breach, such as:
- Paying out compensation to customers affected by the breach
- Purchasing new security mechanisms
- Covering legal fees
- Paying for an investigation to discover how the breach occurred
A data breach can also cause regulatory penalties if the organization wasn't complying with particular security regulations.
3. Legal action
Legal action is another major risk companies leave themselves open to when they don't have sufficient data protection. Based on data protection regulations, organizations are legally required to show they've taken the needed actions to protect their customers' and employees' personal data. When data is compromised and stolen from a company, people can take legal action against the organization, claiming compensation.
If an organization loses the case, they'll end up needing to pay out compensation, which could be in the millions of dollars. Equifax's 2017 data breach ended up causing the company to have to pay as much as $700 million to U.S. customers in compensation. Besides compensation costs, an organization will also have to spend time and money on its legal defense and suffer from reputational damage. Due to the financial and credibility concerns surrounding legal action, proper data protection is essential.
4. Data loss
When a data breach results in the theft of sensitive personal data, the organization and any customers affected could face severe consequences. Hackers can do a lot of damage with someone's personal information, using it to conduct scams or commit fraud. Due to sensitive data's value, bad actors often target information like IP addresses, contact information, and financial information. Alongside the effects of stolen data on consumers, it can significantly harm a company's operations, as hackers will often delete the data they steal.
Besides the typical information hackers aim to steal, many bad actors target companies with more specialized data, such as medical records or biometric data. If a medical organization loses medical records, it may not provide the appropriate medical treatment to patients, leading to subpar care or disastrous outcomes. Regardless of the type of data lost, the organization will have to spend a significant amount of time and money restoring lost data. Many customers are likely not to provide their data again due to a loss of trust.
5. Operational downtime
A significant risk that organizations don't often consider when thinking about their data protection is the operational downtime that will occur after a data breach. Once a data breach occurs, a responsible organization will first have to contain the breach and then investigate how it happened. This investigation will also need to review the accessed systems and what data was affected. During the containment and investigation stages, a company may need to shut down its operations entirely until the investigation is completed.
Since investigations can take days or weeks to complete, an organization's operational downtime might be extensive, leading to lost revenue and dissatisfied customers. The loss in revenue can be particularly damaging to companies without a lot of savings or runway for emergencies. Once the organization resumes business, its operations might still be impacted, as staff implement new security measures and go through any training sessions.
Main elements of data protection
Due to the many risks of not protecting your data, data security for small businesses is essential. You can implement a few main elements of data protection to guard yourself against those concerns. Official data protection policies, data backups, monitoring and reporting, and secure software can all help you improve your sensitive information's security.
Find out more about some of the primary elements of data protection strategies and plans below:
1. Official data protection policies
One of the best ways to begin protecting your data is to create official data protection policies for your business. These policies should be detailed and unambiguous to ensure employees know what's expected of them. These policies should also include corrective actions employees can follow when security threats occur.
2. Staff training and education
Another way you can implement data protection practices at your business is with staff education and training sessions. These training sessions will often cover cybersecurity basics, with information about avoiding harmful websites, not opening files from suspicious emails, and ensuring staff don't use passwords featuring personal details. Other information could also cover the importance of data protection, showing staff how harmful it can be if they don't follow various best practices.
Alongside the initial staff training sessions, it's often a good idea to make education a consistent practice. You can regularly send staff reminders about how they should handle sensitive data and provide refresher courses. You can also check if your employees are using approved software to do their work, as unauthorized software often raises the chance of data breaches.
3. Data backups
In the event of a data breach, system failure, data corruption, or disaster, a company can lose its data. Without this data, a company will struggle to perform its operations and suffer reputational damage from dissatisfied customers. Organizations should regularly ensure they have a copy of their data available if they face data loss.
Part of an effective data protection strategy involves the use of data backups. Many companies turn to cloud storage solutions for a data backup. With a cloud solution, data is stored on secure offsite servers that will be unaffected if an organization loses its original data. A company then restores its lost data using a backup, allowing it to get back to work fast. Data backups also allow companies to compare affected data against the backup if a security issue occurs.
4. Data encryption
Encryption keys are critical for data protection. When you encrypt your data, a computer algorithm will turn text characters into unreadable formats that unauthorized users won't be able to decipher. If a data breach occurs, encrypting your device's hard drives provides you with another line of defense against bad actors trying to use your data.
With data encryption at your business, only authorized users will have the appropriate keys to unlock the data and access it. You can add encryption to various kinds of data, such as emails, databases, and files. By encrypting your data, you can significantly lower the damage from a data breach by ensuring bad actors can't read your stolen data.
5. Data monitoring and reporting
If you want to stop data breaches in their tracks, extensive data monitoring and reporting tools are critical. With data monitoring, you can test and prove your protection and security policies to ensure they're effective. Data monitoring also allows you to log all of your network activity, with many companies having a read-only copy generated that no one can change.
Alongside monitoring data activity, a great system will send reports to various personnel. Some of these reports can even highlight potential threats key personnel can review. Monitoring and reporting tools allow organizations to spot intrusions and breaches early and take action to minimize their impact.
6. Secure software
When you want the best protection possible, you'll likely want to rely on security software from a data protection business. Having secure software in your corner ensures you can more easily spot data breaches and prevent them from occurring. For example, the Box Content Cloud has various security and compliance solutions designed to automate much of your data protection processes and guard your data from theft.
How Box can support data protection for your small business
If you're serious about protecting your data, you'll want to turn to Box. With our platform in your corner, you can better guard your data against breaches and provide a better, more secure experience to your customers. Learn more about our security and compliance solutions and the Shield below:
Security and compliance solutions
Part of effective data protection is having data leakage controls, information governance, and governance partner integration. Our security and compliance solutions provide you with all of that. Review the main features of our security and compliance solutions:
1. Information governance
Our security and compliance solutions simplify governance to give you an easy way to manage your content lifecycle. With Box Governance, you can quickly set and adjust policies used to dispose of, preserve, and retain your content. Our governance and compliance solutions also make sure you meet the strictest global privacy and compliance requirements and avoid fines.
2. Data leakage controls
Box features frictionless controls that provide powerful security and allow your business to operate as fast as possible. Our clients love our multilayered, dynamic watermarking, granular permissions, and two-factor user authentication controls. You can also use Box KeySafe to manage your encryption keys. Additionally, Box offers Federal Information Processing Standards (FIPS) 140-2 certified, AES 256-bit encryption for your files in varied locations, whether they're in transit or at rest.
3. Security and information governance partner integration
With our Box Trust ecosystem, you can use our solutions to seamlessly integrate with the top security and information governance partners. Due to our partnerships, you can increase your entire tech stack's compliance and content security.
When you want to easily and comprehensively protect your data, Box Shield is an exceptional option. Find out more about Shield below:
1. Automated classification
With Shield, you can manually and automatically classify your content, making the classification process easier and more secure. Our powerful, native capability can identify custom terms within files, PII, and intellectual property before automatically classifying them in accordance with your policies. Shield's automatic classification tools help you free up staff for other tasks by reducing manual inputs while still providing you with the data protection you require.
2. Cloud security portfolio integration
When you're ready to put Shield into place, integration with your existing cloud security portfolio is easy. You can integrate our alerts and insights with your cloud access security broker (CASB) and security information and event management (SIEM) to ensure you receive a more unified view. By integrating our alerts, you can add another effective tool to your security portfolio.
3. Data leak prevention
Shield's controls give businesses a frictionless end-user experience and a way to prevent data leaks in real time. Since you can set your access policies via our controls in only a few minutes, you can devote your staff to more critical work and know your data is secure.
4. Intelligent detection
With Shield's machine learning, you'll receive fast and accurate alerts about account compromise, insider threats, and malware attacks. When your team receives these alerts, they can use Shield to evaluate them and take action if needed. At times when an alert needs more analysis, your team can also send these alerts to your existing tools.
Learn more about what Box has to offer
With all of the data protection solutions Box offers, we're ready to help your small business receive the best security available today. Our solutions give you the chance to better protect your business's content, giving you greater controls over data, access, and users. Since Box allows our clients to connect many of your existing tools and content, you can utilize a single, integrated platform, making data management and protection easier and more secure.