Every business relies on data to one extent or another in order to keep its operations stable. From sales and marketing to R&D and customer service; all departments need access to accurate information to help drive various initiatives throughout the year.
However, the more data a company collects and stores, the greater the risks posed. An increased digital footprint typically means a higher likelihood that cybercriminals will want to steal it. There is also the issue of maintaining data integrity as larger collections of information are shared between systems and databases.
Because of these potential risks, it’s important that companies take the time to prioritize data risk management in a number of areas while aligning their initiatives with core business objectives they’re trying to achieve.
What are the Common Data Management Risks Businesses Face?
- Cybersecurity Challenges – Digital security is always a top priority for businesses. If businesses aren’t regularly evaluating and improving their digital defences, there is a much larger chance of data becoming compromised in a data breach. Even something as simple as an outdated firewall could enable a ransomware attack that brings an organization’s operations to a complete standstill.
- Non-Compliance Issues – Depending on the industry your business serves, you may very well be subject to various regulatory compliance bodies such as HIPAA or HITRUST, CCPA, or GDPR. These regulations are in place to make sure that all companies work in the best interest of customers, employees, and the general public when collecting and storing digital information. Failing to remain compliant with outlined standards can result in heavy fines and can also lead to reputational damage.
- Lack of Data Integrity – As data is transferred to and from on-premises systems and cloud-based applications and services, the integrity of the information is more likely to come into question. If information is regularly updated manually, errors can become common. This can create significant risks depending on the type of information being used, especially if it is relied on to help the business make “informed” decisions on how to grow effectively.
- Financial Setbacks – The business’s economic health is often tied to how well it can manage its data. If information is corrupted or stolen, the leadership team might make critical decisions based on wrong intel. Outside of immediate revenue losses, there may also be significant expenses associated with restoring large datasets or recovering from corrupted filesystems.
- Damage to Brand – Rightly so, customers have an incredibly high expectation of the businesses they engage with, especially when it comes to their data privacy. If that trust is broken due to negligence or insufficient due diligence in security planning, it can create several public relations and legal issues for the business.
- Major Operational Disruptions – Data issues are rarely restricted to just one department. Whether it’s a failed server, major security breaches, or simple human error, any of these issues can ripple across the entire business and cause significant operational disruptions.
Core Elements of Data Management
With so many data management risks businesses face in tracking, how can they ensure they’re staying ahead of them rather than chasing them down?
This is where having a strategic risk management framework in place becomes critical. To do this, businesses need a few fundamental elements.
Business Objective Alignment
Security measures shouldn’t fight against your business goals – they should be designed to support them. To do this, it’s critical to identify where data enters your core business systems and assign a value to it.
It’s important to note that not all data is created equal and doesn’t need to be treated the same way. By ranking your sources, you can prioritize the core data elements of your business, such as proprietary information or customer financial info.
Regular Vulnerability Checks
The worst time to find a security hole is during an attack. Running vulnerability assessments on your networks and environment regularly, at least twice a year, should be a goal you set for the company.
If you are in a highly regulated industry (like healthcare or defense), or if you have just installed new storage technology, you might need to check even more frequently to ensure everything is locked down effectively.
Another way you can ensure this is by working with penetration testing teams that can help you validate the integrity of your current security measures and help you identify potential gaps you may have missed.
Risk Mitigation Protocols
As you start identifying potential weak spots in the business, the next step should be to introduce an effective plan to address them. This typically involves a mix of technical tools, physical security, and administrative rules.
It’s important never to forget the human element. Your employees are often the first line of defense when it comes to security and data integrity enforcement. Training them how to spot a phishing attempt or handle sensitive files correctly makes them part of the solution rather than an unexpected liability.
How to Integrate Data Risk Management Into Current Workflows
Building on a Compliance Framework
A good data governance and compliance framework takes the guesswork out of handling information safely and efficiently. It gives a clear blueprint that defines who is responsible for what. When everyone knows their specific role in data stewardship, fewer things fall through the cracks.
This also means keeping an eye on your infrastructure to ensure it meets ethical and legal standards. When regulations change, updates need to be communicated clearly and immediately to both your internal teams and any third-party vendors you work with.
Introducing Strict Security Protocols
Security should always be baked into your daily routine. This includes things like enforcing strong password policies, using Multi-Factor Authentication (MFA), and bringing in outside security teams to help evaluate and stress-test your defenses.
Data encryption is also a critical element that most businesses should be using. Whether your data is sitting in a database or being regularly transferred to and from third-party services, encryption ensures that even if someone steals it, they can’t read it.
Designing and Testing an Incident Response Strategy
Having a playbook you can follow if and when things go wrong is also essential. An incident response strategy defines exactly what happens during a breach. This includes who identifies the problem, how you investigate the root cause, and the steps needed to get systems back online if they’ve become compromised.
Communication is key here, however. Your plan should clearly outline who talks to stakeholders, legal teams, and the public so that the recovery process is fast and organized.
Make Data Risk Management a Critical Part of Your Business
Your strategy for reducing risk should always be in lockstep with your company’s strategic growth plans.
By adopting the strategies discussed, you’ll ensure your business isn’t just ticking compliance boxes but instead builds a strong foundation for its data security.
