As a kid, keeping a secret meant not telling anyone else information that a friend chose to share with you and trusted you to protect. In the digital era, protecting customer and employee sensitive data works similarly. Although establishing privacy controls and maintaining data protection are more difficult when managing complex IT environments, the principles underlying your data protection initiatives remain the same.
When you understand privacy risk management across the data lifecycle, you can build customer trust and maintain a strong compliance posture.
What is privacy risk management?
Privacy risk management is the set of technical and administrative controls reducing the likelihood that someone will experience harm because a company processes their personal data. Privacy risk management focuses on protecting digital and non-digital data across its entire lifecycle, from the time a company collects it through disposal.
The National Institute of Standards and Technology (NIST) Privacy Framework notes that cybersecurity and privacy risks often overlap. Cybersecurity risks arise from cybersecurity incidents that lead to a loss of data confidentiality, integrity, or availability. Meanwhile, privacy risks arise from privacy events caused by data processing.
According to NIST, the data lifecycle includes data:
- Collection
- Retention
- Logging
- Generation
- Transformation
- Use
- Disclosure
- Transmission
- Disposal
Why is privacy risk important?
Since companies collect, transmit, process, and store more data than ever before, privacy risk is important to ensuring customer trust and achieving revenue targets.
Customer trust
While customers are willing to share their personal data, they increasingly consider a company’s data use and protection policies. A 2022 report by McKinsey found that
- 46% buyers often or always consider another brand if the one that they are considering purchasing from is unclear about how it will use their data
- 56% of buyers make online purchases or use digital services only after making sure that the company has a reputation for protecting its customers’ data
- 40% of all respondents stopped doing business with a company that was not protective of its customer data
To build customer trust and prevent churn, companies must prove that they implement privacy risk mitigation controls.
Compliance fines
Recognizing the increased number and severity of data breaches, legislative bodies and industry organizations established new data privacy compliance mandates. With each new law, the requirements become more stringent. Some examples of key privacy compliance requirements include:
- Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule (1996): focusing on protected health information
- General Data Protection Regulation (GDPR) (2018): establishing extraterritorial jurisdiction
- California Privacy Rights Act (CPRA) (2020): giving customers the right to sue for damages
Each regulation applies penalties for compliance violations. In some cases, like with certain HIPAA violations, the enforcement can include incarceration.
Legal costs
New laws give data subjects the right to sue companies for harm caused by privacy incidents. For example, under the CPRA, consumers have the right to institute a civil action to:
- Recover damages up to $750 per consumer per incident or actual damages, whichever is greater
- Injunctive or declaratory relief
- Any other relief the court deems proper
When companies need to defend a lawsuit, they also incur attorney fees and administrative costs.
The Data Lifecycle and Privacy Risk Management
Understanding the types of controls that protect data privacy can help you mitigate risks.
Collection and Disclosure
Privacy risk mitigation begins when you initially collect data. To implement the appropriate technical and administrative controls, you must plan your data collection in advance so that you:
- Collect for necessary purposes: most laws require that you only collect the data that you need
- Minimize the amount you collect: request the least amount of data necessary to achieve your objective
- Provide an opportunity to opt out: ensure data subjects give affirmative consent by knowing what you collect and who you share with
- Monitor third-party data processors: ensure third-parties’ privacy risk management practices align with your risk tolerance
Retention, Use, and Transmission
Since you store and transmit sensitive data, you need to implement the appropriate privacy controls here, too. This means that you:
- Enforce the principle of least privilege: provide the least amount of user access necessary so that people can engage in critical job functions
- Encrypt data-at-rest: implement appropriate cryptographic protection for all locations that store sensitive data
- Encrypt data-in-transit: implement appropriate cryptographic protection for all networks transmitting data
Generation and Transformation
Protecting data privacy also means ensuring that you maintain its accuracy and give data subjects the ability to review their data. This means that you:
- Provide a right to review: give data subjects the ability to request and review their personal information
- Provide a right to correct: respond to data subject requests to correct data by fixing inaccuracies
- Monitor user access: ensure users do not make unauthorized changes to data
Logging
Some of the log data that your systems generate include protected information. When implementing technical and administrative controls, you need to consider the IT and security personnel who review your system logs. This means that you:
- Manage permissions to log management tools: apply principle of least privilege to all operations, DevOps, and security team members
- Redact message fields: ensure operations, DevOps, and security teams cannot view personally identifiable information (PII), health information, or financial data contained in logs
- Define retention periods: set different retention periods for PII to maintain compliant
Disposal
To mitigate privacy risks, you should implement appropriate data disposal practices for digital and non-digital data. To implement the appropriate data disposal controls, you should:
- Provide a right to be forgotten: give data subjects a way to request that you delete their information
- Automate digital data destruction: set data deletion and destruction processes according to compliance-based timeframes
- Delete data stored in log archives: review log archives regularly to ensure protected information is deleted according to compliance requirements
Graylog Security: Centralized Log Management for Privacy Risk Management
With Graylog Security, you can implement the technical security and privacy controls necessary to mitigating risk. Our cloud-native solution and out-of-the-box content enable you to get immediate value from your logs, reducing the total cost of ownership and empowering your teams. Built with privacy in mind, Graylog offers a robust set of features so that you can extend your privacy risk management program to your log management solution, filling in an often-overlooked gap.
With our simplified audit and compliance reporting capabilities, you can communicate your technical controls’ effectiveness, giving management the information they need to meet their governance requirements.
To see how Graylog can help you manage privacy risks, contact us today.
