Modern startups are awash in information, from real-time customer insights collected via mobile applications to employee data received through online portals.
Founders are constantly making decisions about where to invest, when to hire, how to hire and, most important, how to grow. In the rush to cultivate clients and consider business scalability, many startups may fail to truly appreciate the immense responsibility that comes with gathering and storing data in the current digital environment, a place where cybercriminals roam and users are painfully aware of the risks that come with sharing private information online.
With this state of affairs in mind, startup founders would be wise to evaluate how they manage data privacy by asking these three questions.
1. How can I use customer data without assuming risk?
Data collection and storage creates unavoidable risk. One small processing mistake or error in judgment can lay the groundwork for a costly data breach or regulatory noncompliance, which is even more significant when you are a startup.
According to research from IBM and the Ponemon Institute, businesses that suffered breaches last year paid an average of more than US$3.6 million in mitigation costs per instance of data loss. As a growing company, the damage a potential breach could have on a new company’s reputation, funding and growth could be truly catastrophic. Unfortunately, no matter how big or small a company is or what controls its teams may have in place, breaches are always possible as long as customer data resides on company-controlled servers.
The key to avoiding assumed risk is to build a foundation and policy that minimizes the storage of sensitive data on the company servers. A startup may not have the resources of a more mature company....
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