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Business Privacy

Privacy Policies: Your Company Needs One

The Redacted Brief
With cyberattacks on the rise, it is important to see the effects of data breaches on companies and their customers. Research suggests that data breaches don’t only affect companies in question, but also their close rivals and competitors.

There are two effects which come into play when breaches occur. The first one is the spillover effect which can harm the company’s rivals. This effect occurs when the breaches are small which suggests that others in the industry are also vulnerable to attacks.

The second one is the competitive effect, and this one can have a positive impact on the firm’s competitors. It is manifested through large data breaches which signal that this is a unique case in the field.

There are certain steps that companies can take to mitigate and protect themselves against these effects. The first thing they can do is to be transparent with their customers. By being open and explaining how they use and share data, companies allow their customers to make informed decisions concerning said information.

Secondly, firms should give their consumers control over their data. Companies that score high in both transparency and control have seen an increased immunity to losing customers even when data breaches occur. They were also less prone to stock price damage. It has been calculated that these practices could save companies hundreds of millions of dollars. However, only 10% of the Fortune 500 companies fit these criteria.

Companies are lagging behind with their privacy policies and it’s proving to be costly. They need to implement new policies immediately if they’re to keep up with the increasing threats concerning personal data.

Original Via HBR.org

Cyberattacks are on the rise, with over 1,000 data breaches occurring at U.S. organizations in 2016 alone, most often through hacking or external theft. And it isn’t only violated firms that are hurt by these incidents. Studying hundreds of data breaches, our research has found that they create significant ripples that affect other companies in the industry…

See the full article at:

https://hbr.org/2018/02/research-a-strong-privacy-policy-can-save-your-company-millions

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