Why Is Data Security Important? A Helpful Explainer

Technology has driven globalization. And the combination of globalization and technology lets you capture much more data about your products, services, and customers.

However, with this increased amount of data comes great responsibility. Every organization holds personally identifying information and must protect this data accordingly.

Losing data can have a huge impact on your organization. The primary impact includes distorted delivery of products and services, financial implications, and loss of sales. However, there’s also a secondary impact. This may include decreased productivity, slow customer service, loss of customers, and reputation damage.

Let’s look at what data security is, why it’s worth your time and money, and what the different levels of data security are.

Data Security Explained

Simply put, data security is concerned with everything related to protecting your valuable data. Data security includes the following domains:

For example, data owner is an important role. The data owner controls the data permissions for a specific set of data. Also, he or she can update or add new data. The main purpose of a data owner is to increase data quality and data integrity.

Next, why should you care about data security as an organization?

Importance of Data Security

Nowadays, strict regulations exist for the data a company owns. Because of increasing digitalization, companies hold much more data than they might realize. It’s important to protect this data, especially sensitive data such as personally identifying information. In some countries, the CEO is liable if the company fails to comply with data regulations.

Data is a company’s most important asset, in part because it helps with decision making. For example, knowing your organization’s history of sales for different products can help you predict next year’s revenue. In general, data helps an organization to predict, optimize, and innovate. Without data, it isn’t easy to nurture innovation.

Data breaches occur regularly, but data security can minimize their effects. Let’s explore the effects of a data breach.

Primary and Secondary Effects of a Data Breach

If your organization experiences a data breach, then you’ll notice different levels of impact. Let’s explore primary and secondary impacts.

Primary Impacts

The first effects of a data breach can have a disastrous impact on a business. There are direct and indirect implications. First of all, your company might face fines if it failed to protect the data according to regulations. Also, your organization might experience other direct financial losses. For example, you might not be able to sell products.

Secondary Impacts

Of course, the primary impacts of a data breach can be devastating, but there can also be secondary impacts.

Often, employees’ work heavily depends on the data a business holds, including data on customers, sales, and products. When this data is missing, tasks like customer support can be a real struggle for employees. Expect customer response time to increase, which leads to unhappy customers.

Also, this means employees are less productive. In some cases, these setbacks affect job satisfaction and company culture.

Finally, a company might feel a big impact because of damage to its reputation. Clients might distrust your company. In the worst case, your clients would jump ship and move to your competitors.

How can you prevent these impacts? Let’s talk about the different varieties of data security.

4 Levels of Data Security

Data security happens on different levels, ranging from physical security to user-level security. Let’s find out about the four different levels of data security.

#1: Physical Security

The physical level of data security is concerned with physical access to the servers and server room.

First of all, it makes sense to monitor all activity through closed-circuit television. Also, install a badging system to track physical access to the server room. This allows your organization to create an access audit log. Some companies even use digital locks to protect their servers.

Besides physical security, network security is equally important. Why? It acts as an access point to the data.

Next, let’s explore how we can implement network security.

#2: Network Security

Second, network security is concerned with incoming and outgoing connections. I recommend installing software that monitors network traffic to find anomalies. Also, always opt to create a firewall.

Be aware of employees who want to work from home but get access to the data. This means you have to expose an endpoint over the Internet. Companies often use a virtual private network to safely connect to company data over the Internet.

Now, let’s dive deeper into system-level security.

#3: System Security

System security is concerned with data access, permissions, and metrics. You’ll want to track all database activity while monitoring data access. This way, you can build a data log that will be useful if the organization wants to perform an internal data audit.

Also, system security focuses on safely storing data. Picking an encryption algorithm is part of system security. Encryption allows you to scramble your data according to an encryption key. If there’s a data breach, the data is useless for the attacker. The attacker needs the encryption key to decrypt the data.

In addition, metrics are vital for monitoring data security and data quality. Here’s a list of potential metrics you’ll want your organization to measure:

  • The number of faulty login attempts
  • The number of unique users accessing the data
  • The total number of data operations

These metrics help you find anomalies, such as unauthorized access.

We’ve arrived at the deepest level of security, which is user security.

#4: User Security

Finally, user security is concerned with the human aspect of data security. Education is the cornerstone of user security. Employees need to be properly educated on how to use data securely.

Often, employees don’t know how they should handle data. For example, they don’t realize how hazardous it can be to leave an unused data file on a computer. Deleting unused data from your computer minimizes data security risks.

Defining data-related roles and responsibilities within your organization also helps with data security. For example, you’ll want to define a data owner. This person controls access to the database and knows the meaning of each data field. He or she decides who receives access to certain parts of the data.

By clearly defining responsibilities, you should be able to improve clarity. Employees will know who’s responsible for capturing data, removing any confusion. Often, this leads to higher data quality.

Data Security Summarized

Data security focuses on many aspects, ranging from the network level to the user level. You can use many measures to improve your organization’s data security.

At its core, data security focuses on improving data quality and data integrity. Although they’re related, they aren’t the same!

Also, data security helps protect the company’s most valuable asset. Data is key for decision making and gives the organization a competitive advantage. If there’s a data breach, then data security is the last line of defense. The main goals here are to reduce the chances of reputational damage and financial implications.

Data backups are key for restoring normal operations after a data breach. If someone steals or deletes data, you can still rely on data backups. A backup helps limit the effects of a data breach. And that means data backups are an essential part of data security.

If you’re interested in data security, I recommend learning more about the benefits of data governance. Best of luck to you as you protect your organization and yourself by improving your data security.

This post was written by Michiel Mulders. Michiel is a passionate blockchain developer who loves writing technical content. Besides that, he loves learning about marketing, UX psychology, and entrepreneurship. When he’s not writing, he’s probably enjoying a Belgian beer!