Digital Privacy Trends Impacting Tech Investments

Digital Privacy Trends Impacting Tech Investments

Data privacy laws help protect Internet users and businesses alike. Internet users are assured of data safety while businesses can collect data they need for marketing or customer acquisition reasons legally.

If you run an online business, adhering to data privacy rules isn’t an option. It’s a necessity. In this post, we’ll outline the latest data privacy trends and share strategies you can follow to make better decisions for your business. Let’s get started.

#1: Heightened Focus on First-Party Data

Advertisers are moving away from third-party data in favor of first-party data. The explanation is simple. Personal information provided by a customer is more valuable than data collected through third-party cookies. It is reliable, authentic, and accurate.

The rise of first-party data is changing relationships between advertisers and tech businesses. Advertisers are forging partnerships with companies directly. However, they must adhere to new rules coming up.

The first new rule is consent. Many advertisers prefer consented first data for an obvious reason: they want to abide by the law. The second reason advertisers are embracing first-party data is that it makes it possible to deliver a personalized experience.

#2: Global Data Protection Regulations

The EU’s General Data Protection Regulation (GDPR) was the first major data protection rule of its kind. GDPR mandates every website to ask for consent and explain how it plans to use a customer’s data. It also provides users the right to decline data collection or specify the type of data advertisers should collect.

GDPR has been a huge success in Europe. It has also acted as an inspiration for countries and states to create local data privacy laws. In the US, states like California, Virginia, and Colorado have created personal data privacy rules local and out-of-state businesses must follow.

Around the world, more than 100 countries have now introduced data privacy laws to protect their citizens. They include Australia, Brazil, China, India and Japan.

If you own a business that targets customers in multiple countries, learn about each country’s data privacy laws. There’s a strong chance you may need to make changes to your data collection policies.

#3: Virtual Privacy Networks

In this age of adware, hackers, and unethical data use, many people use privacy tools like VPNs to secure their data. Virtual Private Networks shield your IP address and encrypt your data to keep you safe online.

Does VPN protect you from hackers? Yes, it does. A VPN scrambles your data to make it useless to hackers. By also hiding your IP address, it becomes harder for an online attacker to infiltrate your computer.

VPNs provide more benefits than privacy and security. They can help you unblock geo-restricted websites. You can use a VPN to download torrent files or express your opinions safely online.

The rise of Virtual Private Networks is playing a role in shaping new privacy trends. VPNs make it harder for companies to track your data. To win Internet users over, some companies are creating user-centric data privacy laws.

For example, they offer options to delete data after using a website. They ask for consent and give out options so that users can decide what data to collect. What’s more, businesses offer tools to secure user accounts and minimize security breaches.

#4: Death of Third-Party Cookies

For a long time, marketers relied on third-party cookies to find potential clients online. Now there’s a better option in first-party data—comes with consent and provides accurate data.

Google is planning to phase out cookies from Chrome browser before the end of 2024. Bing and Yahoo will probably follow suit, forcing tech companies to reinvent their investment strategies.

The most forward-thinking businesses will invest in first-party data collection. It’s an expensive investment. However, it provides customers with privacy. It also helps businesses collect comprehensive data.

Comprehensive data can help a business identify promising leads quickly. It can help entrepreneurs learn how to reduce customer acquisition expenses. Additionally, data can help brands engage with customers for long-term relationships.

#5: Bigger Fines for Data Violation

Regulators across the world haven’t been playing around when it comes to data privacy regulation. In the EU, some major tech companies have paid over $300 million in data protection-related fines since 2018.

Last year, Ireland’s Data Protection Commission fined Meta (Facebook) $1.3 billion for violating GDPR rules. Meta allegedly transferred user data collected within the EU to its US servers without proper data privacy safeguards.

In China, a ride-sharing company was fined $1.19 billion for violating the country’s network security laws. Amazon had similar problems. In 2021, officials in Luxembourg fined the tech giant $877 million for breaching GDPR rules.

Amid these hefty fines, tech companies are adopting stricter data protection laws. Some of them are giving their users countless data privacy options, including the choice to delete data collected. Companies are also paying more attention to consented first-party data.

#6: Improved Cybersecurity Measures

The new wave of data privacy regulation is forcing companies to make bigger investments in cybersecurity. By investing in better ways to protect their customers’ data, brands are at a lower risk of receiving fines or losing customers.

The first way companies protect their customers is through SSL encryption. A website secured with SSL helps protect against data leaks and hacks. Multi-factor authentication, antiviruses, and VPNs add an extra layer of security.

Some companies are also investing in cybersecurity awareness training for their employees. This follows a new study showing that 88% of all data breaches in 2023 were caused by human error.

Training involves teaching workers how to create secure passwords. It involves lessons about the different types of malware out there. It also includes learning how to identify potential threats and avert them.

#7: Increased Corporate Transparency

Gone are the days when companies would collect user data in silence. In this era of GDPR regulations, companies are choosing transparency when it comes to data collection and use.

Although regulators play an important role in promoting corporate transparency, Internet users are the biggest reason for this trend. Demand for data privacy from Internet users motivated regulators to take action.

Internet users don’t ask much for companies anyway. They want companies to explain how they collect data, the type of information collected, and how it is used. Importantly, companies must also secure this data from breaches.

#8: Bigger Investments in Data Privacy Technology

Complying with data regulation can be expensive for large businesses. A small online business only needs to secure its website, treat data securely, and buy a tool to help users consent for data.

Big companies must invest heavily in web security, data storage, and encryption. When a well-known company suffers a data leak, it could take months or years to recover. It also must spend millions of dollars in fines, recovering data, and settling lawsuits.

Depending on the company, these tools might be compulsory:

  • Firewalls
  • User authentication
  • Data encryption and masking
  • Backup tools
  • Data Erasure

A firewall helps your business block unauthorized users from accessing your website. You can also use it to block traffic from specific regions. User authentication tools help protect your customers from unauthorized account access.

Companies invest in data authentication tools to ensure only the right people have access to your data. Then there are tools for data encryption, anonymization, and scrambling. All these tools are essential for safeguarding a company’s data and reputation.

#9: Growing Demand for Cybersecurity Jobs

As data privacy trends increase, so will the need for cybersecurity jobs. Most companies already find it hard to hire the right candidates for digital security jobs.

Cybersecurity is a broad industry. People hoping to capitalize on the growth of this sector should consider improving their skills in areas like information security, data forensics, penetration testing, and security architecture.

Information security jobs generally require a bachelor’s degree in a related field. You also need to have important certifications, experience, and the ability to work under pressure.

Big tech companies pay hundreds of thousands of dollars to talented cybersecurity experts. Keep in mind you can work remotely or report to the office depending on your preferences.

#10: AI for Data Privacy

Businesses around the world are expected to spend $110 billion in the field of Artificial Intelligence. One of the best benefits of AI is that it helps detect and neutralize cybersecurity threats in real-time.

AI tools can analyze large volumes of data in real-time to detect anomalies like phishing attempts and adware. These tools can then neutralize the threats faster than a regular antivirus can.

Another AI use involves automation. AI can help businesses collect certain types of data and anonymize the clients for better security. It can also help with data analytics in the information security field.

Unlike humans, AI helps automate tasks and monitor threats efficiently. AI lacks the vulnerability of a human being, leading to fewer errors. Although AI cybersecurity tools are effective, they’re not powerful enough to replace human expectations.

Tech companies will continue to require human cybersecurity experts to create digital security architecture, and monitor and avert high-level threats. That being said, digital security tools are helping improve the field tremendously.

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