How do Companies Process Sensitive Data and Why is That Important?



Keeping information secure from any theft activities in the digital world is necessary. But unfortunately, with everything going online, the digital world seems to be just as dangerous as the real world, especially when storing your personal information. 

These issues will often arise when a company fails to ensure proper security measures and when companies don’t process sensitive data properly. You would be surprised that only in the United States, 67% of users don’t actually even know about any data privacy rules. 

Well, let’s not wait any further because, in this article, we will find out how companies process sensitive data and why it’s essential. 

How do companies process sensitive data, and why is it essential to do so? 

Employee data 

Employee data is quite similar to customer data. Similarly, you have to gather their name, addresses, social security numbers, and even banking information. Moreover, this is considered sensitive information and is an essential part of the organization to store it.

Employee data and any other sensitive data stored within an organization can cause huge issues. For instance, imagine some hacker breaks into your database and hacks all of your private employer data; this won’t only cost and disturb individual lives but also cost you financially and even cost your brand reputation. 


GDPR and CPRA compliance 

The GDPR and CPRA are both the largest privacy policies globally and have brought many amendments to the private data world. Hence, the GDPR accounts for all companies doing business within EU borders or residing in it. On the other hand, the CPRA holds companies accountable within Californian borders and those who do business within these borders. If you want to learn more about the CPRA, you can check more about Osano’s information on the CPRA

Moreover, since more people are using the internet each year, there is also more data being stored, which means that we must comply with privacy regulations. Every country worldwide has its own privacy policies, and those who don’t follow them will usually face huge fines and lose their level of brand reputation. 

Note: here is an example of a privacy policy regarding how a company collects private data. 

Private data is starting to become global

Even though we mentioned the CRPA and GDPR, it doesn’t mean they are the only privacy policies globally. One of the primary ones is also located in China, Saudi Arabia, Canada, India, and Australia. As for now, China and Saudi Arabia have approved a new privacy law passed only last year. 

Moreover, global privacy control (GPC) is becoming quite strict in the real world, and to be honest, there are always new questions regarding it. However, some privacy regulators don’t fully agree with the idea of consumers fully regulating their data on their own whenever they visit a brand new website. 

The GPC wishes to create brand new data functions and standards that won’t complicate any processes for consumers or companies trying to comply with privacy policies. Moreover, each country worldwide has its own privacy regulations and different approaches to privacy data. 

You know better than us when you receive a promotional email with your private data. This occurs when you visit a new site and accept cookies from them. However, even when you receive emails, you have the chance to unsubscribe from these emails and request these sites to remove your personal data from their site entirely. 

In short, privacy policies are amended each year, and we must comply with new regulations each time they are approved. 

Companies must know where their data is 

An essential step in providing adequate data protection is knowing what kind of data is being stored and where. When you succeed in identifying this, you can make better-informed decisions regarding measures that need to be taken to protect this type of data. 

Many large organizations worldwide use data discovery tools to scan company networks to see if they possess any sensitive data. Whenever they find out that this company doesn’t have the right to keep this type of data, they’ll delete it or encrypt it. Since there is a rise in privacy policy compliance requirements, controls are also rising. 

Intellectual property and trade secrets 

Almost every company worldwide has proprietary information stored in its database, and it comes in different forms. For instance, it can be stored with a third party or in a document management system. 

Taking the example of sensitive data, it also includes data regarding product specifications, competitive research, and more. Moreover, when you have a third party storing your sensitive data, it may sometimes be an issue. Why so? Because if that data gets breached, it’ll affect you as well, which can turn catastrophic quite quickly! 

Cloud data protection 

You may commonly hear about data being migrated to the cloud; however, there are many rises in concerns about this. While cloud-based storage does pass all the green lights on security checks, many large companies still feel that data isn’t fully secure when stored, thus, making organizations and companies feel insecure. 

Standard practices large organizations use are tools firmly specialized in cloud data protection or even encrypting sensitive data before it’s transferred to the cloud. 

Industry-focused data


Depending on the industry you are operating in, there are many examples of sensitive data you are required to protect. For example, those in the retail sector need to focus on protecting their customers’ payment data; a marketing agency needs to focus on protecting the data of their clients, and more. 

You need to know that customers most of the time aren’t aware that they provided you with their personal information. For instance, customers may not know that their data is stored through a third party, and may be more at stake. 

For example, Facebook in the UK was recently sued for exploiting the private data of more than 44 million users. Hence, The social media giant had to pay a fine of more than two billion pounds

Educating employees on sensitive data

If you are running a large organization or company, it’s more important to have your employees know about how sensitive data is processed within the organization than anything else. In fact, according to a study by Forbes, 85% of data breaches included some human aspect to it, meaning that it could be someone within the organization who did it. 

Most large corporations worldwide continuously inform their employees about data breaches and have internal security policies, providing them with clear instructions, guidelines, and even training to ensure they are not going against the organization’s rules concerning private data. 

Organizations will tend to use data loss prevention software to ensure enforcement and restrict unauthorized access to sensitive data. Moreover, the levels of sensitive data can be controlled by specific users within the organization. Hence, sometimes data breaches might not be an external threat but an internal one. However, the key to protecting sensitive data is the proper member training, and here are a few ways you can do so: 


  • Share your data security policy with your employees: it’s essential that your employees know your data security policy and comply with security standards when handling this data.

  • Post reminders: set reminders about data security policies whenever sensitive information is used. 

  • Give rewards: whenever you see that your team feels better about their hard work, give them a reward when they comply with data privacy regulations within the organization. 

  • Give warnings: you never know when the next data breach might happen, but before anything happens, warn your employees what happens if they violate security policies and take action if they fail to do so. 

Case study: The prosecution of AA Ireland Limited 

In late 2017, an individual filed a complaint to the DPC against AA Ireland Limited for receiving suspicious marketing text messages. Simultaneously, he informed the DPC that he had only recently had a motor insurance renewal quotation from his current insurer but was looking for a more competitive one. The company he found was AA Ireland Limited. 


Moreover, the agent from AA Ireland Limited promised that the individual’s data wouldn’t be used for any marketing purposes. Furthermore, while discussing with the agent from AA Ireland Limited, the individual found out that the quotation was much higher than the one from his current insurance company. Thus, his final choice was that he wouldn’t proceed any further with the quotation offered from AA Ireland Limited. What was the leading complaint? The individual told the DPC that he informed AA Ireland Limited that he longer wanted to receive any marketing promotional messages after his final decision. 


However, even after he filed a complaint, AA Ireland Limited continued to send promotional messages, mentioning that they offered a discount on their quote. This continued to happen even one day after. Moreover, the individual didn’t respect this and said that it was a breach of their promise since it happened after he filed a complaint. 


Furthermore, AA Ireland Limited agreed that they had breached the complainant’s request and should not have sent a promotional message after it. However, the DPC had previously warned them too many times, and this was the last strike. So, the DPC decided to take measures and initiated prosecution proceedings against AA Ireland Limited. Thus, AA Ireland Limited had to pay fines and cover prosecution costs according to the Probation of Offenders Act

Under which conditions do companies process sensitive data? 


To better answer these questions, we will take the GDPR as an example. Here is the following condition in which the GDPR allows you to process sensitive data: 


  • The collective agreement requires your company to process data following GDPR regulations and even for individuals regarding social security, social protection law, and employment fields. 

  • Interests of the person or a person who is legally or physically incapable of giving consent are at risk.

  • You are a non-profit organization or foundation with a political or religious purpose that processes data about your members or those in regular contact with your organization. 

  • Data gathered is processed for medical purposes, medical diagnoses, and more.

  • Data is processed for public interest purposes in public health in compliance with the EU and national law. 

  • Data is processed for historical or scientific research cases or even statistical ones. 

To read more about national law privacy laws, you can click here

Wrapping it up 

That’s all for this article. This was our full explanation of how companies process sensitive data and why it’s essential to do so, especially in this day of age. Private data has never been more important and has never required so much compliance. Overall, the digital world is changing quickly, and requirements to adapt to it are becoming more strict. 

Since there are more users on the web, getting sensitive data stolen also increases. After all, your organization is held accountable for any fraudulent activities with sensitive data. Thus, it isn’t easy to deal with it, especially if you fail to comply with them and have to pay hefty fines after!  

Take into account what kind of data you store, educate your employees about it, and monitor what is done with the data. The last thing you want to happen with your information is for it to be stolen and sold to a third party! 




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