The Risks of Mishandling Data

6 min

When companies mishandle data,
the consequences can be dire.

When businesses fail to prioritize data privacy...

1. They become vulnerable

When companies make products that aren’t designed with privacy in mind, those products are inherently weaker than they could be. That puts those companies — and their customers — at risk by opening them up to more potential privacy incidents.

2. Their reputations suffer

With data breaches affecting organizations with increasing frequency, consumers are savvier than ever about their private information. They expect the companies that collect their data to be more transparent and responsible in their use of that data. Any businesses that aren’t will lose people’s trust and loyalty.

3. They lose money

Dealing with data privacy issues is expensive. In fact, research shows that data breaches are becoming more costly every year. A 2018 study by the Ponemon Institute shows that the average cost of a breach is nearly $4 million. That’s about $250,000 more than the average cost of a breach in 2017.

4. They risk breaking laws

There are legal requirements for maintaining data privacy. Failing to comply with these regulations can lead to even more (legal) costs.


This sheet outlines some of the most basic American and European data privacy legislation.

Prioritize data privacy so your company doesn’t suffer from:


1. Increased vulnerability
2. Reputational damage
3. Lost revenue
4. Legal repercussions

Time for a quiz.

Tony and Petra are starting a new advertising agency. They’ve set up everything they need to launch the business, with one exception: they haven’t figured out how they will manage their clients’ personal information.


Tony is growing impatient and wants to get things moving. What should Petra communicate to him?

Quiz 1 of 1

What should Petra communicate to Tony?

a
That she agrees. They should launch the agency and take care of any final details as they go.
b
That if they don’t establish strong data privacy practices now, they could risk losing a lot of customers and money in the future.
c
That if they don’t establish strong data privacy practices now, they will look bad if and when clients ask them about their information policies.
d
That in this day and age, every business decision has to be a data decision. So they shouldn’t launch the agency yet.

A is the least responsible course of action. Answers C and D aren’t entirely wrong, but the most complete, convincing, and correct answer is B.


Tony and Petra need to take data privacy seriously now, or risk any number of potentially serious consequences later.

Lesson complete

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