The Business Case for Privacy and the Cost of Mishandling Data
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Privacy compliance carries real cost, but mishandling personal data can be far more expensive in fines, breach costs, and lost consumer trust. Privacy is increasingly viewed as a core business priority that drives loyalty and earnings.
Almost every business handles personal data, and those handling sensitive data (medical, financial, children's) face a higher bar. Businesses operating globally face cross-border data issues governed by multiple privacy and security regimes.
Compliance is costly: an IAPP-EY survey found companies reported spending more than $1 million per year on GDPR compliance after the GDPR took effect in 2018. The ITIF estimated in 2022 that if all 50 states enacted privacy laws, yearly out-of-state compliance costs could reach roughly $100 billion per year.
Mishandling data can be even costlier. IBM found in 2022 that the global average cost of a data breach exceeded $4 million, with higher costs in health care and financial industries. Studies link consumer trust to purchase decisions; Edelman found ethics matter more than competence in building trust, and Cisco's 2022 survey found roughly 75 percent of consumers would not buy from a business they did not trust with their data.
Viewed through the lens of trust, privacy is a core business priority that can increase consumer loyalty, improve brand perception, and lead to higher earnings - not merely a cost center.
Key terms - quick answers
What is “Sensitive data”?
What is “Surveillance capitalism”?
What is “Duty of loyalty”?
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