Why prioritising data privacy is essential for small businesses

data privacy
Data security infographic internet technology background – Shield protects information privacy from threats / dangers online – viruses, cyber crimes, hacking – Internet security concept illustration

Australia is home to over two million small businesses, and if the 18 months have taught owners one thing, it’s the importance of embracing digital technologies to alleviate the impacts of lockdown. As more business owners are innovating and turning their traditional brick and mortar stores into digital platforms, a growing reliance on the internet increases online risks.

Data privacy is a defining issue for the business community today, particularly with the rising uncertainties of the proposed changes to the Privacy Act. Unfortunately, confusion reigns supreme amongst these small-business owners, as it is still too easy to overlook their responsibilities when it comes to data privacy. To avoid the potential threats and cost consequences of data privacy issues, small-business owners must understand the importance of their digital transformation and become educated as well as aware of the action steps necessary for data protection.

Awareness is vital

The first action for small-business owners to take is to become aware of the data security threat, the risks and the responsibilities. A data breach can have severe reputational and financial consequences. However, in a recent study by Zoho, only 44 per cent of businesses have a defined, documented and enforced policy regarding personal data collection and usage disclosed through their business. One in three (34 per cent) businesses either don’t have a data privacy policy or don’t know if they do. The remaining businesses only have an informal or unenforced policy or have not read their policy.

It is becoming increasingly important that small-business owners take the time to become familiar with the new requirements; however, this must go hand in hand with industry and policymakers having the duty to guide and provide support. This way, business owners are provided with the safeguards needed to protect their businesses and customers using it.

Action items

It is time to take theory and put it into practice, and whether mandatory or not, small-business owners must comply with the responsibility to protect their data, business and customers. Presently, businesses earning over $AUD 3 million are to be compliant with the Data Privacy Act. This does not protect Australia’s over 2 million small-business owners, nor safeguard their business. Establishing a data privacy policy will ensure that business owners are actively thinking about, and acting upon, their responsibilities.

With defined, documented and enforced policies, owners can understand their data responsibilities of third-party platforms they use, such as social media and Google and ensure they are compliant with government regulations.

Australia is a nation of entrepreneurs who should be celebrated and encouraged for their survival during a pandemic. Inevitably, operating a business in any industry in a COVID-normal world will be dependent on collecting more data, for health and safety measures as well as for competitive advantages. With more awareness, education and action, small businesses can focus less on data privacy and more on what they do best.