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Customer Data Security: 10 Best Practices for Ensuring Safety and Trust

Tony Caccavo, Esq. is a former educator, attorney, and the CEO of TeamPassword, a password management company. He believes cybersecurity tools and information should be made accessible, to better protect individuals, companies, and society at large.

March 29, 202410 min read

Cybersecurity

During historical gold rushes, panners and miners flocked in droves, hoping to make their fortunes. In the online age, however, the high-value resource of the day isn’t gold; it’s information.

Data-driven insights help businesses connect with their target markets. This means better products, more effective ads, and adjusting your business model.

That said, businesses aren’t the only ones that benefit from data collection. Malicious actors can use sensitive data for all kinds of purposes, from harassment to financial and identity theft. They may even threaten businesses directly with denial of service or by holding information for ransom.

That’s why you need to know everything you can about customer data security.

[Table of Contents]

The Prevalence of Customer Data Today

You might not think of your business as being particularly data-driven, especially if it’s a brick-and-mortar store selling physical goods. Yet, even these companies collect valuable data, such as credit card details from non-cash transactions.

These days, even small organizations use data-driven insights to increase conversions and reduce customer churn. The kinds of customer data you collect can vary widely. Along with transactional info like card details or email addresses, this can include:

  • Demographic information, such as age, gender, and employment

  • Purchase, subscription, or content viewing histories

  • Medical information

  • Information on friends and family

Why Strong Cybersecurity is Essential

It’s essential to have appropriate data security measures for your business. For one thing, you have a moral duty of care to protect sensitive data relating to both your customers and employees. This is especially important for anything considered Personally Identifying Information (PII).

Then there are the legal consequences of failing to provide customer data security and adhere to relevant privacy regulations. This includes state and sector-specific laws like the Health Insurance Portability and Accounting Act.

International businesses must also adhere to the European Union’s General Data Protection Regulation (GDPR). Fines for violations can reach tens of millions of dollars or even a percentage of global financial turnover, which can lead to significant financial losses.

Image Sourced from Statista

The Rise of Cybercrime

As computer and IoT technologies continue to advance, so too do the ways in which people break the law. Hackers, scammers, and other malicious online actors keep developing more complex ways of breaking into systems or tricking people. 

These include:

  • Phishing scams via email and social media

  • Malware to steal data or compromise systems

  • Ransomware to lock users out of devices or networks

  • Direct hacking attempts

  • Distributed Denial of Service (DDOS) attacks

As such, the ways businesses secure their customer data need to keep up to protect their business from a potential data breach.

10 Customer Data Security Best Practices

Now that we’ve established the various threats, let’s talk tactics. Given how cybersecurity has advanced over the years, you might think you simply need good security software. But technology alone is not enough.

Don’t get us wrong: having the right tools is essential, but there’s more to it than that. Effective habits for data management and protection are equally as vital.

1. Regularly Audit Data and Stick to the Essentials

In theory, the longer your business operates, the more data it’ll build up. While this can be useful for things like market research, it also poses a problem. The more data you have, the more damage will be done when it’s leaked or stolen.

That’s why you need to conduct regular data audits, which serve two functions. First, they’re a form of virtual spring cleaning. It’s an opportunity to discard old data that’s no longer relevant, like personal details for a customer who unsubscribed from your service years ago.

Second, data audits help you to review the forms of data you’re collecting and your motivation to do so. If there isn’t a coherent reason for collecting a particular kind of information, get rid of it. By focusing strictly on the data you need, you minimize the risk to customers.

Free to use image sourced from Unsplash

2. Form an Effective Data Privacy and Usage Policy

Your organization’s usage and privacy policy forms your first line of defense in effective data protection. This includes everything from data access management protocols to security requirements for employees to use unique passwords.

As for creating a cybersecurity policy, start with the objectives behind it: what you’re protecting and why. Then evaluate the risks and potential security threats as well as specific compliance requirements.

You should also make sure your written policy is as jargon-free as possible, so that your people understand it.

3. Train Staff and Inform Customers About Cybersecurity Practices

The point of a cybersecurity policy is that even non-tech savvy employees can understand it. But they still need to be trained on best practices.

Teach your team what makes for strong authentication security, how to spot things like phishing scams, and anything else they might need to know. 

Cybersecurity training helps employees to identify risks and threats. In turn, this means they’ll be less likely to land your business in hot water by making costly mistakes.

Let’s look at what this means in practice. Say you run a private medical organization and need to maintain a HIPAA compliant call center. You should explain to your staff not to share confidential medical details with anyone other than the patient.

Image Sourced from Dialpad

Beyond training any employees who take calls and manage data using this platform, you should also educate clients. Let them know what privacy measures you take to keep their data safe, and teach them how to use the platform securely.

If every user knows what information can and cannot be shared and with whom, then any unusual requests or behavior will be flagged, thereby mitigating the risk of a security breach.

Emphasizing customer data security practices isn't just the right thing to do; it's also great for your brand. It projects reliability by showing the public you take guarding their private data seriously.

4. Encrypt All Data

Now, let’s look at some of the most critical cybersecurity techniques, starting with data encryption. 

Encryption is the practice of converting sensitive data into a meaningless mess of useless code or text. The only way to revert the data into a usable form is to pass through layers of authentication like passwords or biometrics.

These security measures work as a key that unlocks the information you’re accessing. Different types and distinctions of data encryption include:

  • Bit-length encryption for emails and other communications

  • File-level encryption to protect systems and servers

  • Symmetric and asymmetric (private-key and public-key) encryption

5. Use Multi-factor Authentication

Strong passwords might be enough for your personal computer or streaming service accounts, but not for professional data protection. That’s why you need to implement multi-factor authentication for all employees.

Users should provide two or more different kinds of security evidence to access data. Different forms of secure authentication include:

  • Password protection

  • Temporary security codes sent to a preset email

  • Secret security questions

  • Biometrics (such as fingerprints or facial recognition)

6. Build a Comprehensive Cybersecurity Infrastructure

So far, we’ve touched on a couple of important tools and methods for ensuring security. But, if you’re serious about preventing data breaches, there are several more boxes you’ll need to tick:

  • Anti-adware

  • Anti-spyware

  • Virus protection and anti-malware

  • Firewalls

  • Pop-up blockers

  • Vulnerability scanning tools

  • Endpoint detection and response tools

Let’s say you run a web domain registrar service like Only Domains, and you recently onboarded numerous new customers through .com.qa domain registration. Due to gaps in your cybersecurity infrastructure, sensitive client data gets stolen.

Now, those businesses and their websites are at risk – all because you didn’t shore up your anti-malware systems. That won’t just negatively affect them, but also the trustworthiness of your brand.

Free to use image sourced from Unsplash

7. Keep all Software Updated

Cybercrime and cybersecurity are locked in a perpetual arms race. If programmers find a way to close a gap in virtual security, criminals respond by finding new workarounds. 

Of course, it’s easy to think of this in terms of the big developments like the rise of multi-factor authentication, social media-based phishing techniques, or the impact of AI on both sides.

All too often, though, the small advances matter just as much. That’s why you need to keep all software updated on a regular schedule. You never know when the latest patch will fix a small but dangerous gap in your security.

8. Limit Data Access

Sometimes, your own people can be your worst enemy. Perhaps they’re a malicious actor trying to actively leak sensitive information or maybe they’re just prone to mistakes. Either way, you need to know how to prevent insider threats or at least mitigate their impact.

Limit access to sensitive data based on the Principle of Least Privilege. In other words, only allow people to access data that is demonstrably essential for their work.

9. Maintain Secure Data Back-ups

So far, we’ve talked about how to protect against phishing, malware and hacking, but what about mistakes and technical problems?

It isn’t only the theft of data that can cause problems. Lots of businesses depend on regular access to their databases to be able to provide services, so what happens when your server goes bust?

Some data may be replaceable, but a lot of it isn’t. Regular back-ups ensure you’ll never be without your company’s vital data, even in case of disaster.

Of course, accidents aren’t the only reason to keep back-ups. If hackers use ransomware to hold your systems hostage, back-ups mean you can still provide essential services while you resolve the issue.

10. Use a Password Manager

Password managers provide one secure location to store your online account login details. Some even allow you save other data such as credit card information, secure notes, and even encrypt attachments. 

While most browsers include a password manager, these can only be used by an individual. Saved records cannot be saved and shared with others, which limits their usefulness for a company or organization. 

However, there are passwords managers, like TeamPassword, that are built specifically for teams. TeamPassword, and other password managers like it, allow users to share saved records with groups, thereby providing easy access to company accounts that multiple people need to access. 

Password managers are an essential tool for any business as they allow administrators to control who has access to which accounts, safely encrypt login details and other saved data, provide logs for audits, and often include MFA. 

Take a Multi-faceted Approach to Data Security

If you only take one lesson from today’s blog, let it be this: There’s no cure-all magic solution to cybersecurity issues.

For one thing, an effective customer data security plan should make use of the full range of tools available – anti-malware, multi-factor authentication, data encryption, and so on.

But remember that software is only half the battle. You must also have a comprehensive cybersecurity policy and ensure employees and clients engage with it.

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