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Data Security Basics in the Virtual World Digital risk management is an integral part of managing just about any 21st-century business. Essential security strategies to keep your operation safe

By Rakesh Soni Edited by Matt Scanlon

Opinions expressed by Entrepreneur contributors are their own.

Starting a business can be a harrowing time. Aside from dealing with the financial aspects of a company, one also has to also ensure that systems involved in its operations are free from risks. Businesses, at present, are increasingly dependent on technology to collect and store consumer information. This shift has been marked by vulnerabilities in the security and integrity of databases. Therefore, enterprises have taken to implementing several protocols to ensure data security.

What does data security entail?

The market for cybersecurity reached just over $170 billion in 2020, according to data security and software company, Varonis Systems. Its concept is straightforward: the process of incorporating protective measures into an enterprise's databases, with the goal of preventing an individual from gaining unauthorized access to sensitive consumer information. Data security also plays a role in preventing an enterprise from being vulnerable to legal trouble.

Related: 4 Statistical Reasons Data Security Should Be a Top Priority for Small Businesses

Variants of data security

Data protection involves the use of several policies or methods. These can change depending on the industry and the magnitude and sensitivity of information being recorded. Methods include:

Masks: Bots and other malware tend to congregate in areas that store high volumes of data. The process of data masking prevents it from being visible to unwanted visitors. For example, sensitive bank information of a consumer can receive a mask to prevent unauthorized personnel from accessing it.

Encryption: This is among the most common methods of ensuring security. It involves the application of a code that unlocks a "compartment" of data. This code is kept confidential and is only known by few individuals.

Erasing: Static data is a perfect target for malware and security breaches, as the presence of data in one particular region for an extended period can be revealed to a hacker. Therefore, they can easily carry out a planned attack and infiltrate security measures. By erasing, one can lessen the burden on a database as well as protect the consumer.

Data Resilience: Some malware functions on the principle of destroying information present in a database. Therefore, it is essential to make data "resilient". This is done by creating copies of the data or backing it up so as to replace lost information if needed.

Minimization: The larger the data packets or databases are, the greater the challenge in managing them. Therefore, one should look to minimize incoming or already existing data so as to be able to manage it better.

Related: Everyone is a Target. Your Business Needs to Take Security Seriously

Security risk assessment: Meaning and working process

Although the above technologies could greatly enhance security, it is always better to be safe than sorry. So, in addition, one needs to carry out frequent assessments, with the aim of ensuring that all loose ends are tied up during the implementation and operation of any security measures. The process of assessing also involves identifying and working to incapacitate potential breaches, and involves four steps:

Identifying Threats: Assessing data areas which a bot or malware would gravitate towards.

Assessing Situations: If a threat is found, the team or individual will have to assess the situation and determine the best course of action.

Mitigating Threats: The approach or solution arrived at in the previous step will undergo execution in this one, including the assessing team working to stem the growth of the malware.

Preventive Measures: Finally, the team will look to prevent future occurrences. It does so by putting improved practices or measures in place.

Compliance and legalities

Governing bodies from around the world have been noticing the widespread collection and use of consumer information. Therefore, to mitigate the chances of its unnecessary collection, there are legalities in place. Rules regarding required data security measures differ depending on the volume of data as well as its kind. Regulatory methods/pieces of legislation include:

Health Insurance Portability and Accountability Act (HIPAA): This U.S. law, signed in 1996, principally applies to security standards used in medical institutions. Under this act, the capabilities of a healthcare establishment will be reviewed with respect to the collection and protection of consumers' information. It requires these institutions to focus on the following requirements:

  1. Monitoring parameters: Monitoring the accessibility of databases from an external source. That includes possible data breaches.
  2. Written record: There should be a record of files and data stored in databases.

General Data Protection Regulation: The European Union imposed this set of regulations to check for data security vulnerabilities in 2018. It works to protect personal data. Key provisions include:

  1. Classification of data: An enterprise should ensure that it tracks what data is being stored. In order to achieve this, such an enterprise will have to classify it accordingly.
  2. Governance of data: A business owner is required to put forward a plan for governance of data to better deal with security breaches.

Sarbanes-Oxley Act: This 2002-instituted U.S. federal law requires companies to carry out annual assessments and audits regarding data security measures, including a detailed report outlining various aspects of data security.

Failure to comply with any of these regulations depending on the geographical location of the business, and could lead to to hefty fines.

Related: How Much Does Cybersecurity Really Cost?

Don't be unprepared

A security breach or leak of consumer information can have devastating consequences for a business, not least because it results in bad blood between it and customers. Therefore, to conduct risk-free business, operations have to carry out two activities: frequent assessment of current security protocols, and constant search for methods that could enhance security measures. Doing so allows businesses to give consumers the security they need and deserve.

Rakesh Soni

Entrepreneur Leadership Network® Contributor

CEO of LoginRadius

Rakesh Soni is the CEO of LoginRadius, a leading provider of cloud-based digital identity solutions. The LoginRadius Identity Platform serves over 3,000 businesses and secures one billion digital identities worldwide.

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