Why Encryption is Important for Data Privacy in 2020

Why is data privacy important?

Rapid advances in technology in the 20th century ushered in the Information Age. The age is still here with us and it is one that is undergoing constant evolution to bring forth new concepts. As far as the Information Age goes, the 21st century is dominated by Big Data.

Organizations run on terabytes of data and data security and data privacy are integral to the working of the system. For top corporate and institutional players, data constitutes a huge part of the business’s assets and data breaches can result in a massive loss of value and liabilities, not just for the business but also for its valued clients.

That is why businesses are constantly spending billions of dollars every year in data encryption technologies.

What is data encryption?

Data is sent, received or stored in a multiplicity of devices and installations ranging from extensive data centers to devices as simple as smartphones. The data forms used also vary in complexity and range from simple text messages to massive blocks of data like in blockchain networks.

Data encryption refers to the process that ensures all this data is effectively protected from breaches. Encryption ‘scrambles’ the readable data using a secret code to ensure that only the intended recipient is able to read the data. The secret code is the decryption key.

Encryption jumbles up the message or data thereby making it difficult to reconstitute for any unintended third-party who might breach the information. It therefore provides an extra layer of security beyond the physical data security that most organizations endeavor to institute to ensure data privacy.  

Why encryption is important?

The modern world runs on a vast amount of data transfer between millions of interconnected nodes and systems. Much of this is personal or business information and it is normally stored not in the personal or business premises but in remote “cloud” servers. Interaction with this data happens constantly via web connections. Hackers are able to breach this data either when it is stored or “in transit” if it is not adequately encrypted to ensure data privacy.

How Encryption Works

In encryption, the information is scrambled into a format which is unreadable. This is known as “cipher text”. Encryption on data in transit is done data that is transmitted via a network such as the internet or any network service that you are using. The encryption on data “in transit” is realized via VPNs, HTTPS, SSH and a variety of other encryption protocols.

Encryption can also be done on ‘static’ data such as the data that is stored on your computer system. The message is decoded back to the original form when the intended recipient receives the message in a process known as decryption. The sender and the receiver have the “secret” encryption key that enables the data to be unscrambled back to a format that is readable.

Here are some of the reasons why encryption is important for data privacy in 2020:

Hacking is Becoming More Sophisticated

Hackers rope in billions of dollars from cybercrime every year. It is not just individuals running hacking syndicates but there are multinational outfits using sophisticated technologies and strategies to intercept data, breach systems and steal money. The growing sophistication of these operations behooves organizations to invest in more complex data privacy systems.

It is now a regulatory requirement

Data encryption is a mandatory requirement in some industries and organizations that fail to institute it might incur hefty fines for noncompliance. This is particularly applicable to the healthcare provision industry which stores vast amounts of personal data.

Under the Health Insurance Portability and Accountability Act (HIPAA), healthcare providers are required to institute certain security and data privacy features to protect the sensitive patient information online. e

Higher learning institutions also implement certain data privacy and security features that provide adequate protection for student records in the Family Education Rights and Privacy Act (FERPA).

In the retail industry, there is Fair Credit Practices Act (FCPA) along with other related laws mandating retailers to protect private consumer data.

By implementing data encryption in their respective industry, business and other organizations handling private data are able to stay in step with regulatory requirements and avoid the penalties for noncompliance.

Internet privacy concerns pose real-life challenges

Concerns over online data security are not just an abstract fear of the unknown. They present real-world challenges and cost organizations billions of dollars in data loss and data breaches. The risks multiply as modern employees are increasingly working with a multiplicity of portable devices ranging from iPads to smartphones.

Virtually all email services have encryption but users must take extra steps to ensure that there is SSL encryption and that the email is coming from a legitimate email address of a legitimate organizations. Corporations are losing valuable data and tens of millions of dollars through business email compromise (BEC) targeting companies with suppliers abroad. In 2019, companies lost $1.77 billion through BEC scams.

Encryption Increases Trust

The use of data encryption technology in data protection is the surest way to gain trust among parties. It shows your clients and partners that you take data protection and data privacy seriously. Many people are beginning to lose trust in the reliability of online data security systems and going the extra mile to ensure data protection by encrypting customer data can be a great way to build trust in your business processes.

Gain a Competitive Advantage

Data encryption offers you an undisputed competitive advantage. Some 45% of companies currently have an encryption strategy that they consistently apply across their organizations. Enterprises that fail to incorporate data encryption inevitably lag behind their competitors

If you are not already using data encryption to secure your data privacy in 2020, it is time to take the smart steps now and start instituting that extra layer of protection that will give you a complete piece of mind.