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If your business collects data from your customers online or stores data digitally, ensure you encrypt your data. Data encryption is an effective way to protect your business’ sensitive digital data, but unfortunately, many still do not take advantage of this safeguard. As our capabilities online grow, so do the internet’s inherent risks. Accordingly, businesses need to adapt to that landscape. This article will explain what data encryption is and why you should encrypt your business’ data.

Protection Against Cyber Threats

First of all, if you operate online in any capacity, you need to be aware of online security risks for your business. For example, you may be transmitting information via your website, or storing your business’ data in a cloud service. Your business should conduct a security assessment to identify potential cyber threats in your business and implement safeguards to mitigate such risks. You can outline this process in a cybersecurity policy.

It is a good idea to make sure you have safeguards against problems such as the following:

  • privacy and data breaches;
  • malware;
  • phishing scams;
  • denial-of-service attacks; and
  • insider threats.

Encryption is a safeguard that is particularly effective and relatively straightforward to set up.

What Is Encryption?

Encryption refers to a security method that takes a readable piece of data, such as a list of your customers’ phone numbers, and turns it into a scrambled and unreadable code. If you were to look at an encrypted data file, it would look like a string of random letters and numbers. 

Only the person with the particular key to that data can understand it once they have applied the key. The key will be an alphanumeric password or passphrase that you can input into the software or program that manages the encryption, and it will descramble the data for you.

Data encryption is beneficial because it can stop unwanted third parties from:

  • reading your sensitive data;
  • changing your data;
  • using your data; and
  • stealing the content of your data.

Do I Need to Encrypt My Business’ Data?

If you store or deal with any sensitive or personal data, then you should encrypt it. If you want to ensure your business is operating safely online, and handling customer information securely, you need to protect the information you transmit online.

Even if you are not tech-savvy, or your business is relatively small, encryption is still a good idea. Malicious third parties will target weaker systems with their cyberattacks, no matter what information the system protects. You would be at a significant disadvantage if sensitive customer information got into the wrong hands. You could face significant losses, both in finances and reputation.

Tip: Say someone steals your work phone with sensitive business data on it. If that data is encrypted, it reduces the risk of a third party reading it.

Data Encryption and Customer Privacy

If your business deals with your customers’ and employees’ personal information (such as email addresses or financial details), you have certain obligations around how you handle that information. 

In particular, you need to ensure you safely store any personal information. You also need to ensure you safely receive and transmit personal information on your website. If a customer thinks you have not implemented adequate security measures to protect their privacy, they can complain to the Privacy Commission. Under these circumstances, there could be legal fines for your business. As such, it is a good idea to encrypt your data because you are complying with your privacy obligations imposed by the law. 

How Can I Encrypt My Data?

To encrypt your data, identify what information is critical for your business and would cause significant issues if it got into the wrong hands. What qualifies here can vary, but you should ensure you encrypt any of your business’ intellectual property and personal information. Make sure you limit access to who has your encryption keys and update software as needed.

There two key points when you should encrypt your data.

Data in Transit

If you want to encrypt data in transit, you need to get a security certificate and key for your website, indicated by the HTTPS in the URL or a padlock icon. This measure will prevent malicious actors from interfering with transactions or data transmissions as they happen on your website. Your IT service provider can help you with this process.For example, when customers purchase products through your website, they are transmitting sensitive financial details. When they go through online payment, the page where they do this should have an appropriate security certificate.

Data Storage

Even if you may not transmit sensitive data online, if you store it in a digital database, you should encrypt it before any uploads take place. Most of your devices should provide this kind of encryption service, as well as the storage software you use. 

For example, if you operate using Microsoft devices, they should have their own inbuilt encryption service. If not, Windows has a standard encryption program called Bitlocker that you can use.

Key Takeaways

If you operate online in any capacity, you should encrypt your business’ sensitive data to avoid litigious issues in the future. If you would like more information or help with data encryption at your business, contact LegalVision’s New Zealand IT lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

What is encryption?

Encryption refers to a security measure you can use for your business. When a dataset is encrypted, it is scrambled into unreadable code that only the person with the corresponding key can read.

Does my business’s data need to be encrypted?

If you handle sensitive data or personal information, you should encrypt that data. Data encryption is an effective data security measure against leaks or data breaches.

What data should I encrypt?

Identify information at your business that would cause issues if it got into the wrong hands, such as personal information. You should encrypt this information.

What is a denial-of-service attack?

A denial-of-service attack is a cyber-attack designed to prevent access to a service or system by stopping it or shutting it down.

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