Handling data responsibly is no small task, especially for industries ranging from retail, to financial services, to SaaS that can deal with large amounts of sensitive information.
Companies in potentially high-risk verticals face some pretty unique challenges when it comes to staying privacy-compliant and maintaining user trust. The stakes are high with the risk of fines and other penalties, loss of brand reputation, and more.
It’s easy to feel overwhelmed by strict regulatory requirements, policies of tech platform partners, and others that businesses rely on, combined with the need to stay ahead.
But you don’t have to tackle these challenges alone. By being proactive, you can manage privacy compliance effectively and protect your organization’s reputation. Below, we’ll break down some of the biggest hurdles and share strategies for addressing them in a way that works for your company.
What industries face the greatest compliance challenges?
1. Ecommerce and retail
The ecommerce and retail sectors collect vast amounts of personal data daily, including names, addresses, payment details, and browsing habits. With the increasing prevalence of online shopping, these businesses handle an unparalleled influx of sensitive information.
While customer data is invaluable for personalizing shopping experiences, it also makes retail companies prime targets for hackers.
Key privacy risks in ecommerce and retail
- Data breaches caused by insufficient security protections
- Invalid consent mechanisms for collecting and processing data
- Cross-border data transfer issues for global online stores
How to stay privacy-compliant
- Implement robust cybersecurity measures like encryption to protect payment data
- Use compliant cookie consent banners with valid consent choices to provide required information and secure permissions for data use
- Conduct regular privacy audits and due diligence when technologies, operations, and regulations change, especially when expanding into new markets with stricter privacy laws
2. Healthcare and life sciences
The healthcare sector has some of the most stringent data privacy regulations due to its handling of highly sensitive protected health information (PHI). Global frameworks like HIPAA in the United States and the GDPR in Europe require healthcare organizations to manage, store, and protect patient data.
Key privacy risks in healthcare
- Failure to adequately secure patient data storage systems
- Sharing patient data with vendors or research partners without proper consent or safeguards
- Compliance gaps in telemedicine platforms, which have grown in use rapidly in recent years
How to stay privacy-compliant
- Use anonymization techniques to ensure identifying details are stripped from PHI when shared for research, unless explicit user consent is obtained
- Audit and document all third parties with access to medical records
- Integrate privacy by design into all new technologies or telehealth services deployed
3. Technology and SaaS
Software-as-a-service (SaaS) platforms often operate across international borders, storing and processing endless streams of data in the cloud. These companies not only manage their own data privacy responsibilities, but often share data with a variety of third parties in the course of operations.
Key privacy risks for technology and SaaS
- Lack of understanding of global requirements for data transfers
- Complexities in managing user consent across regions with varying regulations
- Security vulnerabilities related to integrations with third-party APIs or services
How to stay privacy-compliant
- Invest in compliance certifications like SOC 2 or ISO 27001 to reassure users of their data protection capabilities
- Implement consent management platforms with geotargeting to adapt to region-specific regulations
- Continuously monitor data storage systems to ensure no inadvertent cross-border data flows
4. Financial services
From banks to fintech startups, the financial industry has always been a high-value target for bad actors. It’s essential for financial companies to responsibly handle account records, transaction histories, credit details, and other data.
Like in healthcare, financial services tend to be highly regulated by multiple laws, like the Graham-Leach-Bliley Act (GLBA), including with regards to data privacy requirements.
Key privacy risks in financial services
- Mishandling personally identifiable information (PII) like Social Security numbers
- Fraud risks arising from insufficient security protocols
- Noncompliance with anti-money laundering (AML) laws and Know Your Customer (KYC) requirements
How to stay privacy-compliant
- Leverage AI-based fraud detection systems to reduce human error
- Encrypt sensitive information both at rest and in transit
- Regularly train employees on privacy compliance and phishing awareness
5. Media and advertising
Digital media and advertising have become increasingly reliant on user data to create hyper-personalized campaigns. However, with third-party cookies being phased out and stricter privacy requirements going into effect, media companies are grappling with new regulatory hurdles.
Key privacy risks in media and advertising
- Misuse of tracking technologies like cookies without user consent
- Noncompliant sharing of data with ad-tech partners
- Use of dark patterns in consent mechanisms
How to stay privacy-compliant
- Adopt cookie-less tracking methodologies that focus on zero- and first-party data
- Ensure advertising technologies (ad tech) partners operate under the same compliance standards
- Provide clear, easily accessible options to opt-out of targeted advertising
What are the consequences of privacy noncompliance?
Failing to comply with privacy laws’ requirements can have dire consequences. Beyond hefty financial and operational penalties, privacy compliance failures cause lasting damage to brand reputation and consumer trust. For example:
Financial penalties: GDPR violations can incur fines of up to EUR 20 million or 4 percent of annual revenues, whichever is higher, for repeat or particularly serious violations. Under the CCPA, companies can face fines of USD 7,988 for intentional violations or for violations involving minors.
Loss of customer trust: Data breaches erode consumer confidence, driving customers to switch to competitors.
Loss of business opportunities: Damaged brand reputation can also scare off potential partners, advertisers, and investors.
Legal liabilities: Noncompliance can result in costly lawsuits and settlements where the law allows for it, especially in class action claims.
How can businesses address privacy challenges?
No matter your industry, addressing privacy compliance proactively can protect your business and customers. Here’s how:
- Conduct data audits regularly: Identify what personal data you’re collecting, via what mechanisms, where it’s stored, who has access, how it’s used, and how long it’s retained.
- Implement a consent management platform (CMP): A CMP automates privacy compliance requirements and helps to ensure that user consent preferences are honored across your platforms.
- Train your team: Equip your employees with knowledge of privacy best practices, regulatory requirements, and security standards, and refresh the training periodically.
- Monitor regulatory changes: Stay updated on evolving privacy laws and the policies of tech partners to ensure your compliance measures are up to date.
- Automate operations checks: Use AI-driven tools to detect potential privacy compliance issues in real time.
Take the next step in safeguarding privacy
Privacy compliance is no longer optional. Whether you’re in finance, healthcare, retail, or advertising, your company’s ability to handle data legally and transparently can determine your success. Customers value their privacy, and companies that prioritize protecting it and their data will stand out.
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