Privacy and Reputational Risk

As privacy becomes a more common word in board rooms, it becomes increasingly important to fully understand its impact.  A company’s approach to privacy can be a liability or an asset.  Some companies are positively adored for their approach to privacy (think Apple).  Numerous others have suffered negative consequences for their approaches to privacy or lack thereof.

The negative consequences of poorly executed privacy programs are themselves numerous.  Regulators enforcing the General Data Protection Regulation (GDPR) have fined companies hundreds of millions of dollars.  Data breach lawsuits have also resulted in hundreds of millions of dollars in liability.  Companies that suffer data breaches are effectively blacklisted by some consumers.

It is this last category of harms that garners the least attention, but that doesn’t make it any less important.  Reputational risk is a serious issue associated with privacy.

There is evidence that consumers care about whether or not a company takes privacy seriously.  A Ping Identity survey from 2019 found that 81% of respondents would stop engaging with a brand online following a data breach.  That’s particularly impactful in an increasingly online world.  Furthermore, 55% of respondents say that a company sharing their personal data without permission is even more likely than a data breach to deter them from using that brand’s products.

At the time of the survey, the California Consumer Privacy Act (CCPA) wasn’t yet in force, but since then, CCPA and the Personal Information Protection Law (China’s PIPL) have come into force and enshrined prohibitions against organizations sharing personal data without consent into law.

Businesses don’t just care about the assets they have; they always care about their future earnings potential.  Both data breaches and unconsented sharing have been shown to significantly hinder future earnings.  If a consumer gets turned off by your approach to privacy, they will often just take their business elsewhere.

That’s why, for the future of any business’s reputation and longevity, managing privacy risks should be of the utmost importance.  Clarip offers data privacy solutions to do just that, like Consent Management and cookie compliance.  Most consumers are fine with sharing their data for better online user experiences, as long as they provide informed consent to it first.  Clarip also provides data subject access request fulfillment to keep companies out of the crosshairs of the regulators.

When so much is at stake, find a solution that works.  Clarip offers DSAR fulfillment, consent management, vendor management, automated data-mapping, data risk intelligence scans, and more.  Visit us at www.clarip.com or call us at 1-888-252-5653 to learn more.