Data Privacy vs Data Security: Why you Need to Know the Difference

Protecting data from cyberthreats such as hackers and unauthorized access is essential in today’s environment. Whether this is guarding it against attackers that seek to steal data for ransom or making sure only authorized personnel have access to highly sensitive details such as financial or medical records, solutions to safeguard information must be a top priority for any business, regardless of size or sector.

However, it can be easy to conflate data security with data privacy. While they both have the same basic goal – keeping sensitive information safe – the two should not be confused. Both endeavors have different approaches to data management and protection that require their own processes, policies and technology. Therefore, understanding what each involves is essential if firms are to develop an effective data protection strategy.

In order to create an effective data security and privacy solution, it’s important to understand the different definitions and what each will involve. If businesses treat them as one and the same, the chances are that key elements will end up being overlooked which could result in sensitive data being compromised or used inappropriately. 

Essentially, the aim of data privacy is to ensure the proper handling, processing and usage of personal information. This includes developing guidelines for how information is stored and transferred between systems and what uses it may be put to by employees and partners.

As well as technical requirements, there are ethical and legal issues to take into account when it comes to privacy. This includes obtaining the informed consent of users for how they handle data and what aspects of a user’s personal data may or may not be used for certain activities. 

Key aspects that fall under the remit of data privacy include:

• User consent
• Data masking and anonymization
• Data deletion
• Confidentiality
• Data minimization
• Data accuracy

Data security, on the other hand, is about directly protecting information from access and use by unauthorized parties. Typically, this means keeping it safe from hackers who will look to steal sensitive details such as financial data or contact information for profit, but it also means putting in place safeguards to protect against issues like human error that may also lead to data loss.

Among the major elements of data security are:

• Encryption
• Access control
• Network monitoring
• Perimeter defenses
• Intrusion detection and response
• Anti data exfiltration

Despite these differences, data privacy and security do have a few similarities, and both can be considered as subsections of a broader data protection effort. Both require a strong approach to data governance and will also have a few key best practices in common.

For example, strong staff training is vital to both privacy and security. While educating users about security awareness in areas such as effective password management and how to spot common threats such as phishing attempts plays a key role in preventing data breaches, this should be combined with informing users of their privacy responsibilities as well.

Under Article 39 of GDPR, for instance, it is the responsibility of the company’s designated data protection officer to “inform and advise” any employee who will be working with data what their obligations are under the regulation. In other words, it is their duty to conduct regular privacy training for anyone with data access.

Similarly, following principles of least privilege and zero trust approaches also has a positive impact on both areas. By ensuring users are only able to access the minimum amount of data necessary to do their jobs, and ensuring that all access attempts are verified and approved, helps to build a high level of privacy.

Good data security is a prerequisite for data privacy. It is not possible to meet obligations under regulations like General Data Protection Regulation (GDPR) or California Consumer Privacy Act (CCPA) without having systems in place to protect sensitive information from unauthorized access or data leaks. Therefore, investing in data security solutions is an essential first step in meeting privacy requirements.

Without a clear plan for maintaining data privacy, businesses will be opening themselves up to a wide range of consequences. Therefore, a good place to start is to look at what data privacy entails, why it matters and how it relates to other elements of a firm’s data protection strategy. Once businesses have a clear idea of these, they can look to evaluate what technical solutions they will need in order to improve their data privacy and security posture.

Data protection is vital as, in most territories, firms’ responsibilities are codified under clear regulations or statutory legislation, with severe penalties for organizations that fail to look after their users’ data.

Perhaps the most wide-ranging single piece of legislation is the EU’s GDPR, which places significant responsibilities on organizations to keep personal data safe. As it applies to all companies storing the data of EU citizens – whether they do business directly in the bloc or not – it is likely to be relevant to all but the smallest non-EU firms.

In the US, the CCPA is one of the main data privacy laws that governs this area, and it imposes similar privacy requirements on any business operating in the state. While there are a range of differences between the two, both have tough requirements for data use and reporting of incidents that firms must be aware of.

Elsewhere, businesses operating in certain sectors may also be subject to other stringent regulations. For US healthcare organizations, HIPAA will be a major consideration, while in the financial services sector, PCI DSS rules and the Gramm-Leach-Bliley Act mandate how institutions must deal with customers’ private information.

A key element that is unique to data privacy is the ethical considerations. This covers areas related to how data is gathered, shared, retained and used in a way that respects the privacy of individuals and their wishes.

For instance, rules such as GDPR make it critical that organizations gain the explicit consent of customers before they use or share personal data, so firms will need to be able to demonstrate they are handling data in an ethical manner in order to gain this permission.

In today’s environment, many critical business activities will require analysis of customer data, from developing marketing campaigns to providing ongoing support. If users do not provide their informed consent for this, many mission-critical operations will not be able to function effectively.

It is therefore imperative that everyone with access to information has a clear idea of how this should be used, not only to remain within every compliance requirement, but also to meet the expectations of customers when it comes to respectful handling of their most sensitive data.

The two main consequences of failing to ensure data privacy are financial and reputational. For the former, the fines that regulators can impose for failing to protect personal data have increased substantially in recent years, and these bodies have not been shy about using these powers.

Under GDPR, for example, penalties for noncompliance can reach as much as €20 million or four percent of global turnover – whichever is higher. This means that for large, multinational firms, GDPR breaches can be very costly. So far, the largest fines levied under the act have been aimed at tech giants like Amazon, which received a €746 million penalty in 2021 for tracking users without consent, and Meta, which holds the record for the largest-ever GDPR fine of €1.2 billion for breaching rules related to the international transfer of data.

Reputational damage can also result in significant lost business if customers no longer trust a business to look after their most sensitive information in a secure manner.

An effective data protection solution should address both data security and data privacy demands to ensure information is handled appropriately at all times. To achieve this, firms must take a layered approach to their information security, ensuring that data is protected wherever it is located and however it is accessed.

A key area to consider that impacts both security and privacy is how data is shared across the network, between employees and with external partners. Data privacy regulations will have explicit guidelines about who should have authorized access to information and when it is not acceptable to move data between different parts of the network – and the fines handed out to the likes of Meta show just how seriously they take this.

From a security perspective, accessing and transferring data through unsecured networks – such as personally-owned devices, consumer cloud storage services or via public Wi-Fi – are all challenges that must be addressed. It can be easy for hackers to take advantage of these less defended endpoints to both enter a network and exfiltrate data.

A key challenge when it comes to protecting personal data is finding the right balance between security and ensuring that everyone has the access they need to actually do their jobs. Overly-sensitive security measures may result in a large number of false positives that prevent employees from performing legitimate activities, while on the other hand, too open an access policy can make data privacy breaches far too easy.

While tools such as multifactor authentication and zero trust can help with this, it also pays to take advantage of emerging technologies such as artificial intelligence and machine learning to improve information security. Tools that can build up a picture of what normal activity looks like will be better able to step in and block anything outside the ordinary without compromising on the chain of security or running the risk of disrupting genuine work activities.

Managing the different demands of both data privacy and data security is a complex challenge for businesses, and one that requires a range of both technical solutions and strong employee awareness. 

To make this easier, there are a few key tools that should be must-haves for any organization. Among these are effective network monitoring solutions that are able to keep a close eye on exactly who is accessing data across the business and what they are doing with it, and raise alerts if any unusual or suspicious behavior be detected.

In an increasingly complex environment, it’s vital that firms are able to monitor every part of the network, including cloud computing and mobile devices that may be outside the traditional perimeter. 

Therefore, on-device tools that do not require information to be sent back to a central server for processing will be highly beneficial in both protecting against cyberthreats and ensuring privacy, as there will be no unnecessary transferring or decryption of data.

In addition to outward-looking perimeter defenses like antimalware and email security, solutions that protect your network from data theft are a must. Specialist anti data exfiltration software, for example, is vital for any comprehensive data protection plan. This works on any endpoint and can automatically block any suspicious data transfer activity that would otherwise see data leaving the network.

When coupled with other solutions, from antimalware to a comprehensive user education program, this helps ensure that any potential threats to data security or privacy – be it cybercriminals or employees misusing user data – can be identified and blocked before they have a chance to do damage.