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Customer data protection for small business: what you need to do

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This guide outlines what small businesses need to know and do for customer data protection.

As a business owner, you have a legal and moral responsibility to keep safe any sensitive information you’ve gathered for transactions. Especially now that people use electronic cash transfers and digital wallets to pay for goods and services, their exposure to cyber threats has increased significantly.

It falls upon you as an entrepreneur to ensure that customer data is well protected from theft, fraud, and sabotage. The challenge for customer data protection has become even more complicated as fraudsters are developing more sophisticated ways to steal customer data and cause system leaks.

Losses from these scenarios may cost you thousands of dollars and that’s not including the reputational impact they may bring. It pays to invest in beefing up your cyber defenses and position your business as a trustworthy brand.

Key tips for customer data protection

Here are a few tips to keep in mind as you give customers peace of mind:

1. Know what threats you’re facing

First off in customer data protection, you need to be aware of the most critical cyber threats targeting small businesses in your industry. Malware remains to be a significant threat that can be easily countered but some are relatively new for which most small businesses are not adequately prepared.

With the introduction of advanced AI, hackers can use generative AI platforms with deepfake and voice cloning capabilities to mislead business owners and employees into giving up login credentials and eventually, pulling out sensitive customer data. 

Aside from this, ransomware is also a major threat you shouldn’t overlook in customer data protection. It involves hackers who hijack your business’s hardware and lock important files unless you pay a ransom.

Ransomware is usually triggered when you click on suspicious emails that lead to a download portal and automatically install software designed for that purpose. Learning about these and many more should help you make the right decisions on how you can better secure sensitive customer data.

2. Do a security audit on your small business

Learning about the latest threats is the first step in customer data protection. Now, you need to know how better prepared you are to combat them.

The only way you can do this is by conducting a cybersecurity audit on your small business. This involves checking whether you have all the right defenses installed, including updated software, firewalls, cloud backup, and data encryption tools.

You should also check whether your current security setup is compliant with pertinent customer data protection laws such as the Health Insurance Portability and Accountability Act and provisions under the General Data Protection Regulation.

The audit should also focus on whether your business is applying best practices in terms of physical security. Based on the audit report, you may want to transfer your servers, central data center, and other assets to a more secure location within your establishment.

More importantly, you need to find out if your business is falling short in terms of protecting against the latest threats. You may need to employ a professional to conduct the customer data protection audit but it’s a necessary expense to ensure customer data doesn’t fall into the wrong hands.

3. Use advanced authentication procedures

For the most part, data breaches are often caused by a lack of procedures for validating the identities of your customers. If you own an online store that requires visitors to create an account before purchasing, make sure you have all the right customer data protection tools in place to safely store sensitive information such as credit card numbers, and prevent unauthorized access.

Through this, you can easily vouch for the people who use your website and prevent cases of fraud and identity theft. Consider providing users with the option to use two-step verification that involves one-time passwords sent directly to a customer’s phone in real time.

It’s also important to encourage customers to use stronger passwords containing numbers and special characters as a mitigating measure against brute force attacks. You should also have secure verification procedures in place for signing up new customers.

If you run a car dealership, you can use a driving license scanner to capture essential information offline and finalize a sale. Taking the time to learn about these verification tools can reinforce your business’s security posture and ensure customer data protection compliance.

4. Train and manage your employees

The exposure of customer data is sometimes a result of human error and negligence on the part of the people managing your business’s information-gathering processes. The best way you can ensure customer data protection is by requiring employees to undergo training on cybersecurity best practices. Focus on teaching them how to keep their work accounts safe and identify different forms of cyberattacks.

Effective access controls are also crucial in preventing breaches that happen within your establishment. When you form a dedicated IT team for your small business, provide it with the means and tools it needs to manage employee accounts and monitor online activities. This helps establish a sense of accountability and transparency, especially in investigating a possible breach that may have been an inside job.

Summary

No matter how small an operation you run, your business will suffer immensely if it fails to keep customer data safe. Use these customer data protection tips and be prepared for anything.

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