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Promising numbers: Privacy as an investment

At times, we are asked what an investment in privacy management truly yields. Obviously, organizations want to take their moral responsibility and comply with applicable legal norms to protect the rights of their customers and employees. However, privacy management is not just a moral obligation: it is one of the most promising and secure financial investments you can make as an organization.

In early 2020, American IT giant Cisco Systems published a Data Privacy Benchmark Study, based upon a double-blind study of 2800 professionals in 13 countries. Its core message: privacy has become a critical business imperative, with almost all organizations reaping significant benefits from privacy investments. A number of findings really stood out, and confirmed the value that conducting a sound, comprehensive and forward-looking and privacy policy brings to organizations.

A small summary of the major findings:

  • For every euro spent on data privacy, organizations are getting €2.70 worth of improvements to their data loss mitigation, agility, innovation, customer loyalty and other key areas. This creates an average ROI of 270%.
  • Over 70 percent of organizations say they receive significant business benefits from privacy, such as operational efficiency, agility, and innovation.
  • Most organizations get very positive returns on their privacy investments. For more than 40 percent, benefits are at least double their privacy spend.
  • 82 percent of organizations see privacy certifications such as ISO 27701 and Privacy Shield as a buying factor when selecting a product or vendor. 

Obviously, these are convincing numbers from any point of view. They show how investing in establishing and maintaining a decent framework of privacy management does not only benefit organizations in the long run, but directly help establish and solidify relationships with customers and vendors. Many organizations won’t even consider doing business with companies which are unable to demonstrate their compliance with privacy laws, and investors are increasingly aware of the value of structural privacy compliance.

A 2019 research sheds light on the importance to consumers of a proper protection of their privacy rights. It found that:

  • 84% of the respondents cared about their privacy. Of this group, 80% was willing to spend time and money to protect their data. Finally, 48% of this group, making 32% of the original group, had switched companies or providers over their data policies or data sharing practices.
  • 67% of consumers believed that how companies treated their privacy reflected how they treated them in general.
  • 61% of consumers stated it wouldn’t buy a product or service at a company when they didn’t trust how their data would be used.

All in all, these researches paint a promising picture to organizations which commit to proper privacy law compliance. Though continual investments are required, these are vastly exceeded by their yields.


Remko Mooi

Remko Mooi promoveert momenteel aan de Tilburg Law School. Hij is afgestudeerd in het Internationaal en Europees Handels- en Investeringsrecht, en in de Geschiedenis.

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