What is Customer Privacy?

Customer privacy, or consumer privacy, is the protection and management of the confidential information of customers. Consumer privacy plays a very important role in transactions and provides security on the customer end. Almost all commercial enterprises use customer privacy so that they can assure their customers that their data is safe.

Importance of Customer Privacy

For any enterprise, customer trust is the highest priority, so they have a strong incentive to maintain exclusive access to customer data. Organizations can use security techniques to protect their customers' data and information. The rules and regulations of consumer privacy are intended to prevent individuals from losing their privacy as a result of consumer privacy failures.

Gaining and retaining your customers' trust is critical to expanding your business. That can be a challenging sell in today's times when data is presented to be purchased, exchanged, and sold daily. When people trust you, they are more likely to share their personal information with you. However, if they lose that trust, everything could come crumbling down around you. Customer confidentiality has always been paramount. It has the power to sway your business, disrupt customer satisfaction, and damage your image.

Privacy Issues of Consumers

Consumer privacy issues happen when personal information is misused or stolen. The law requires a privacy policy to safeguard customers' data. Some issues are provided below:

• Techniques like phishing and pharming are used by fraudsters to get sensitive information from vulnerable sources.
• Hacking is an unauthorized attempt to bypass the security mechanisms of an information system.
• Some websites use advertisements like flashing banners to distract users with misleading images, like fake error messages designed to look like they come from the user's OS.
• Some sites attach malware to the systems of unsuspecting users.
• Malware attacks that breach the security model.

In the early 2000s, the rise of big data, artificial intelligence, and internet service aided in recasting customer data privacy concerns. The Portal for Privacy Preferences Project of the World Wide Web Consortium was created to provide an organized mechanism for online consumers to expose confidential information to companies, as data gathering was generally unauthorized.

Privacy Policy

A consumer privacy policy outlines the way an organization handles its customers' data. It is used to protect personal information. Different organizations have different privacy policies; for example, a healthcare privacy policy will be different from a business's policy.

Privacy policies are based on the concept of personal privacy or individual privacy, which has been cited as an essential right in several court cases despite not being officially stated in the United States Constitution. When defending a wide reading of the Bill of Rights, the Ninth Amendment is commonly mentioned. It's used to protect information confidentiality. Despite this, the United States currently lacks a clear legislative framework for privacy protection at the federal level. Attempts to create one have been made; none, however, has been a success.

A nationwide initiative, for example, was reversed by the federal government in 2017. This necessary decision helped to improve data privacy protection by requiring internet service providers to comply with certain standards, such as obtaining customers' consent before using their information for marketing and advertising purposes. Another comprehensive federal consumer privacy measure, the COPRA (Consumer Online Privacy Rights Act), was submitted in late 2019, but many anticipated that its acceptance would be difficult.

Data Protection

Data protection refers to a set of tactics and practices that you might employ to ensure your data's privacy, availability, and integrity. It is also known as data security or information privacy. A data protection strategy is required for any company that collects, handles, or keeps private information. In the event of a breach or disaster, an efficient plan can help decrease the risk of loss of data, robbery, or damage.

GDPR

The General Data Protection Regulation (GDPR) is a fundamental concept in Europe's digital privacy laws. The European Commission announced steps for data protection reform across the EU in January 2012. They wanted Europe to be "prepared for the modern age." After nearly four years of deliberation, the Commission agreed on what it meant and how it would be enforced.

GDPR is one of the most important reforms. All member states' organizations are subject to this EU framework. It has far-reaching consequences for firms and people across Europe and even beyond.

"Europe's digital future can only be built on trust. People may be certain that they have control over their personal information thanks to strong common data protection rules," said Andrus Ansip, the vice-president for the Digital Single Market, in December 2015, when the amendments were approved.

The GDPR is important because it improves the protection of European data subject rights. This law explains what companies must do to safeguard these rights. It secures an individual's privacy rights.

Customer Relationship Management

Customer Relationship Management, also called CRM, is a set of technology and techniques for managing consumer contacts and relationships. Businesses can use a customer relationship management system to keep track of their customers. The system collects and analyzes data and customer interactions across the customer lifecycle.

The goal of CRM is to improve business relationships. CRM helps companies to stay connected, streamline procedures, and increase profitability. CRM systems gather information on customers from a variety of channels (or points of contact) between them and the business.

CRM programs contain so much customer data that they might be a goldmine for hackers. If your CRM data is hacked and made public, it can undermine consumer trust in your organization and harm your business. So, sometimes CRM is not safe for companies.

Common Mistakes

Generally, people don't understand the work of GDPR. Those who know the rules are more likely to say they understand data protection and have more faith in the organizations that handle their personal information. As a result, GDPR should be viewed as a chance for responsible marketers and companies to re-establish public trust and confidence.

Context and Applications

This topic is very useful for both undergraduate and postgraduate courses, mainly for:

• Bachelor of Technology in Computer Science
• Bachelor of Technology in Information Technology
• Masters of Businnes Administration in Customer Relationship management

Related Topics

• Customer Relationship Managament
• Managing and Sharing customer data

Practice Problems

1. Which of the following is correct about GDPR?

a. The GDPR covers organizations outside the EU that provide items / solutions to EU citizens.
b. The GDPR only applies to organizations based within the EU.
c. The GDPR covers any processing of personal data of people in the EU, regardless of whether the organization concerned is based in the EU.
d. None of the above

Answer: a. The GDPR covers organizations outside the EU that provide items/solutions to EU citizens.

Explanation: The GDPR is important because it improves the protection of European data subject rights. This law explains what companies must do to safeguard these rights. It covers organizations outside the EU that provide items/solutions to EU citizens.

2. What is the full form of GDPR?

a. General Data Protection Regulation
b. General Data Privacy Rule
c. General Data Privacy Regulation
d. None of the above

Answer: a. General Data Protection Regulation is the full form of GDPR.

Explanation: The full form of GDPR is General Data Protection Regulation. It is the fundamental privacy law of Europe.

3. What is CRM?

a. CRM manages company's relationship with customers.
b. CRM manages relationship between customers.
c. CRM manages company's relationship with other companies.
d. None of the above.

Answer: a. CRM manages the company's relationship with customers

Explanation: As the name customer relationship management (CRM) indicates, its function is to manage the relationship between customer and company.

4. Security protection for a personal computer includes ___________.

a. Locks and cables
b. Software
c. Internal components
d. All of these

Answer: d. All of these

Explanation: A personal computer contains locks and cables, software, and internal components for security purposes.

5. The term refers to hidden codes or numbers used to secure electronic gadgets.

a. Passwords
b. Back up
c. Biometric data
d. Private words

Answer: a. Passwords

Explanation: A password is a word, phrase, or string of characters that is used to distinguish an authorized user or process (to grant access) from an unauthorized user. To put it another way, a password is used to prove one's identity or to grant access to a resource.