Data security: how to protect customers from cyberthreats

What is data security?

Just as you would store valuable documents or items in a safe, digital data security serves a similar purpose. It aims to protect sensitive information, the so-called crown jewels of a company, from unauthorized access, misuse, loss, or theft. This includes customer data collected to offer your product or service, or the source code of the software you develop.

Imagine you have an online store where customers enter their details to make a purchase. The last thing you want is for such a customer database to fall into the wrong hands, right? Data security helps with that. It ensures this information is securely transmitted and stored on your servers, away from prying eyes.

This does not just involve encrypting data during transmission, but also securing storage on your systems. This is done with passwords, firewalls, and other technical measures to keep unwanted intruders out.

Data security is part of a larger picture: information security. This encompasses everything from protecting physical documents to securing emails. But data security is perhaps the most crucial piece of the puzzle when it comes to protecting customer information. Therefore, as a company, it is crucial to take this seriously to maintain customer trust and comply with laws and regulations.

Risks of poor data security and customer database management

Poor data security policies can have devastating consequences for your business. Not only does it endanger the security of sensitive information, but it can also lead to financial losses, reputation damage, legal issues, and even bankruptcy.

One of the most common risks of poor data security is a data breach. This can range from unauthorized access to sensitive customer information to accidentally releasing confidential data due to internal errors. Data breaches can cause serious harm to the company, both financially and in terms of customer trust.

Financial loss is also imminent with poor data security management. A data breach can cost you dearly. In addition to direct costs such as fines and compensation for customers, your company may also face long-term financial consequences. Reputation damage, for example, is a long-term consequence of poor data security. If customer data is not safe with your organization, word spreads fast. When customers feel that their data is not secure with a company, they are likely to do business elsewhere. This can lead to long-term reputation damage and even a significant decrease in the value of your company. Companies can face legal consequences as a result of data breaches and privacy breaches, and this can be quite costly: fines from the Data Protection Authority - certainly not to be ruled out in such situations - can amount to as much as 4% of your annual turnover.

European guidelines on customer data

Guidelines have also been established at the European level for handling customer data. The European Union has developed legislation that provides a legal framework for protecting your customer database. The most recent and well-known of these is the NIS2 Directive. This directive, formally titled the Directive concerning measures for a high common level of security of network and information systems across the Union, is not only important but also highly relevant. The new directive aims to strengthen the cybersecurity of businesses and organizations in the EU. This is an upgrade from the first NIS directive that came into effect in 2016, which aims to help member states and critical infrastructure defend against cyber attacks.

For companies, the NIS2 directive means they must comply with certain security standards and reporting requirements. This applies especially to companies considered providers of essential services, such as energy, finance, healthcare, and transportation, as well as digital service providers such as online marketplaces and cloud computing companies.

Specifically, companies under the NIS2 directive must take measures to prevent and mitigate cyber threats. This includes implementing security measures, conducting risk assessments, and reporting serious incidents to national authorities. They are also expected to collaborate with other companies and governments to share information about cyber threats and take joint action to improve overall cybersecurity. In short, this means that as a company, you must invest in cybersecurity and data security. This includes updating and maintaining software, installing firewalls, and training employees to recognize and prevent threats.

Data security and data governance

Data security and data governance are often mentioned in the same breath. Both are important components of data management. However, they focus on different goals.
With data security, the focus is primarily on protecting customer data and other data from threats. Think of hackers, data theft, or unauthorized access. It is about the technological measures you take to protect data, such as encryption, firewalls, and access controls. The focus is on securely storing and transferring data. On the other hand, data governance focuses more on managing the data itself, including aspects such as quality, consistency, and usability. Think of establishing and enforcing policies, procedures, and standards for data management within an organization. This includes defining data terms, assigning responsibilities, and implementing data management processes. The ultimate goal is to ensure that the data is accurate, reliable, and consistent.

Protecting customer data: where to start?

It is clear by now: protecting your customer database is of great importance. This protects the privacy of your customer and ensures a trust-based relationship. But where do you start with protecting your customer database?

It all starts with creating awareness among all employees about the importance of data protection. Through training and awareness campaigns, employees can learn how to handle customer data safely, such as recognizing phishing emails, securely handling passwords, and avoiding sharing sensitive information.

Moreover, not all customer data is equal. It is therefore important to classify the data internally based on sensitivity level. Think of personally identifiable information (PII), financial data, or medical data. By classifying data, you can internally apply the right security measures based on the level of risk.

Managing access is another important part of data security. Only grant the employees who need it for their work access to the customer database. Use strict access control mechanisms, such as role-based access control (RBAC), to ensure that only authorized users have access to certain data.

Having your data security in order is simply impossible without using the right systems. Therefore, make sure you implement systems that continuously monitor and quickly detect suspicious activities - this can prevent a lot of potential problems.

Protect your customer database with data security

Data security is not a luxury. In fact, handling customer data securely is your duty as an entrepreneur. Your customers want to be sure that their personal data is safe in your hands. It is your responsibility to ensure this, otherwise, it can have serious consequences for your reputation, financial situation, and the value of your company. Fortunately, there are many ways to do this, as you have read above. In any case, make sure you work compliantly with laws and regulations and try to stay one step ahead of cybercrime. You increase the likelihood of this by collaborating with partners who have their cybersecurity well in place and can demonstrate it with relevant certificates, such as the ISO 27001 certificate, or (for SMEs) the equally highly regarded CYRA certificate.

WoodWing holds the ISO 27001 certificate; WoodWing Xtendis also achieved the coveted NEN 7510 certificate in 2023.