Why is it Important to Focus on Data Protection Policy in IoT?

3 min read Mar 03, 2021

Today, IoT supports billions of devices and trillions of messages over the cloud, and the routing and processing of data and information essentially need to be completely secured and protected. With the evolution of digitalization and widespread use of social media platforms, it is obligatory to ensure that robust security protocols and efficient data protection policies in IoT are implemented at all layers. Privacy is foremost when it comes to IoT, and of course, no one wants to keep their data and records at stake and pay a hefty price for sharing it on the internet. IoT’s common challenges are lack of user awareness, improper device updates, and widespread device sharing. 

IoT or the Internet of Things is rapidly gaining immense popularity. It is used in all industry verticals, be it education, communication, logistics, fin-tech, healthcare, business development, and much more. In a survey conducted by the Centre for International Governance Innovation, around 8 out of 10 people are concerned about their private information may be bought or sold. This concern of online privacy has increased exponentially over the years. According to a paper supported by Consumers International, over 72% of users believe that the significant reason for consumer data privacy is that too much personal data is being collected online. 

IoT is emerging and facilitates the supply chain networks globally with the exchange of goods and services. A data protection policy is crucial to ensure that the architect is resilient to data authentication and attacks. Measures for client privacy and access control are implemented by major companies considering an adequate legal framework established by the legislator and implemented and supplemented by the private sector organizations. According to the specific needs of the industry, companies can augment the privacy policies to encompass the right to information, the rules of the IT-security-legislation, and various other provisions that support or prohibit the use of mechanisms of the IoT with the establishment of a task force including researchers and legal advisories.

Drive Market Differentiation with Data Protection Policies

For optimized customer experience, sound data protection policies are required. The increasing amount of data collected by B2C companies acts as a double-edged sword. The data you use for analytics, and understanding the consumer behaviors, can also be used for malicious reasons. The onus is on the company to handle the data in a secured manner. In recent years, data breaches have become more severe and frequent. Earlier, people had to face inconvenience due to violations in credit card numbers and wait to get new credit cards. Personal data like images, videos, financial and medical histories are all exposed and prone to data theft and manipulation. AI-based Deepfakes is used to create convincingly fake videos and audio clips and is one of the recent technology threats that are gaining attention globally. With increasingly daunting security threats, consumer-facing industries must revamp their data protection policies to gain back the waning customer trust in IoT business.

  • Gaining Trust

As organizations deploy more advanced technologies, public trust is at a standstill and is gradually eroding. Organizations must collect only relevant personal data for the given interaction and convey data management’s maturity to their users, using a conservative data privacy policy. Creating a map of data that is used inside or outside the organization helps define and support clear policies about where and how the user data is used. With increasing diversity in the marketplace and challenging user requirements, consumers avoid doing business with a company that has unclear data policy and practices. Internal research at McKinsey found that 85% of consumers avoided doing business with a company that lacked trust in its security practices. Also, seven out of ten consumers were rigid that they would stop doing business with a company if it shared sensitive data without other parties without their permission.

  • Clarity of Data Protection Policy

Consumers who don’t have enough choices can end up choosing companies that avoid practicing or ignore security or privacy protections. It is often unclear how an IoT device gathers, stores, and uses consumer data. This is a big challenge for cyber-security specialists as well. The significance of clarity of data protection policies is crucial and merely sharing license agreements is not enough. It is essential to communicate the data privacy policy to the users effectively. If the company partners with another company, the revised user policies must be conveyed to the users, if modified, with notifications or alerts. An excellent approach to gain users’ trust is to remind them regularly what data is being collected and offer them an opt-out option. This strategy also makes your customers more comfortable. Some healthcare agencies are focused on informing consumers when and how their data is used. Most countries deploy a centralized approach to unify medical records and notify patients when their information is accessed by doctors, insurance companies, or other healthcare professionals. It gives a sense of self-protecting the data. 

Final Thoughts

Data protection policy plays a crucial role with the advent of IoT devices in all spheres of life, including smart cities, e-healthcare, automated and remote equipment management and monitoring, next-generation connected cars, supply chain optimization, and much more. B2C companies must work on implementing data protection policies at different layers to gain the trust of consumers and gain a competitive edge in the industry.

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Anil Rana

Anil is a dynamic professional who primarily focuses on digital asset management and business analysis. With over 14 years of experience, Anil works closely with requirement gathering, analysis, estimation, design, development, testing, and production support while supporting business solution software and analyzing business operations for top global enterprises. He possesses multiple certifications that include Certified Scrum Master and Certified Product Owner.

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