Present day startups have wide range of information, from real-time customer insights that has been collected through mobile applications to employee data received through online portals.
The founders always think about making investments as to where they must do it, about hiring and the most important being growing. In a hurry to get more and more clients and considering business scalability most startups might fail to really cherish the vast responsibility that comes with acquiring and storing the data in the current digital world. This is a place where there are numerous cybercriminals and the users must be very much aware of the risk that comes along with sharing their personal information online.
Keeping this in mind the startup founders must be clever enough to evaluate the way the could manage the data privacy by asking themselves these three questions
How will I utilize customer data without assuming risk?
Collecting data and storing it is really a great deal which involve risk and it is unavoidable. A small mistake in judgement can result in a data breach or regulatory noncompliance, which is even more remarkable when you are a startup.
In a research from IBM and the Ponemon Institute, it is reported that the businesses that underwent breaches last year paid an average of more than $3.6 million in mitigation costs per each occurrence of data loss. When a company has just startup and is growing, the damages a breach can bring to it badly affects the company’s reputation, funding and growth. But it is a fact that a company either it be big or small or what controls its teams may have place, breaches can happen any time as long as customer data resides on company-controlled servers.
The main factor to avoid assumed risk is to build a foundation and policy that minimizes the storage of sensitive data on the company servers. A startup company has less resources when compared to a mature company. But by reducing the handling and management of sensitive personal data through a partnership with the right data management and verification solutions provider, startups can make use of verified personal information without any risks involved.
How does poor data management affect the reputation of my company?
The current consumers want the business to take care of their information with much care. When the company breaks this trust, the outcomes are real.
When the public companies misuse the data, it will result in the drop of their stock prices by an average of 5 percent and the customer will depart for more reliable competitors. The large companies can finally recover which is not the case with startups. When such breaches occur in startups, it will lead loss of brand trust, customers, and, perhaps investors also.
If the startup aims at selling their company, the data breach will affect them financially. Startups that have suffered from data breaches are capable of having similar devaluations when they have to put themselves on the market.
How can I maintain high data privacy standards and grow my enterprise simultaneously?
Startups can have a rapid growth and are vulnerable. When they try to produce verifiable ROI any obstacle that breaks their momentum could trip them up irreversibly. The main reason for this would be data. It might be the liability of storing it or the challenge of selecting the right data for collection or continually verifying that data at constant intervals or keeping up with regulatory demands. This is compounded as a startup founder and leadership is prioritizing where to invest limited funds and trying to scale up everything else about their business.