Data Privacy vs. Data Security: Key Differences and Operational Overlaps

As is often the case with related terms, it’s tempting to use the terms data privacy and data security interchangeably. They sound similar, so why not swap them in and out as you will? Here’s why. They mean different things. Yes, they’re dealing with the same subject area. But they’re distinct from each other.

We’ll examine what both terms mean and their important differences. We’ll also see how they overlap. 

So, let’s get into it. 

» Data Privacy

The word privacy refers to the right of an individual not to have their equilibrium, well-being, or confidentiality disturbed by an unauthorized party. It’s the right to an undisturbed personal sphere. Data privacy, in particular, refers to the proper usage of data concerning an individual, and the observation of certain key rules. That sounds fairly simple, right?

Well, not really. Several key behaviors are covered by the expression ‘proper usage of data’. These include the care for data handling, storage, and processing. They also include how an individual can access their data. 

Depending on where you are in the world, there are some aspects of legislation in which the right to privacy controls are enshrined. 

Data privacy

In Europe, it’s the GDPR (General Data Protection Regulation), an umbrella term that covers a raft of data privacy regulatory requirements covering the EU and the UK. Companies have to adhere to its rules or face severe fines. See below for more information on this. 

In the US, it’s not so simple. There’s no over-arching item of legislation that covers all data privacy. Instead, there’s a tapestry of national legislation that covers specific sectors, such as HIPAA (the Health Insurance Portability and Accountability Act) and FCRA (the Fair Credit Reporting Act). 

As well as this, the American landscape features some state-level legislation, such as the CCPA (California Consumer Privacy Act), and its amendment, the CPRA (the California Privacy Rights Act). 

Only three states have complete data privacy protected by law: California, Virginia, and Colorado. Several other states have specific areas covered or are currently bringing more comprehensive laws into being.  

There are many areas of data privacy, but the most important one is that companies are only allowed to handle data that has been expressly given to them by an individual for a given purpose. Nothing can be implied, and nothing is entailed. Anonymity must be allowed where possible. And when the purpose has been completed, the data must be deleted. 

» Why Does Data Privacy Matter?

Two main reasons.

1. The individual’s benefit:

As our digital footprint has become ever more extensive, there are more touchpoints regarding elements of our lives we might prefer to keep private. The more we use online businesses, the stronger the trace of ourselves that is out there waiting to be misused by an unscrupulous body. 

This is why data privacy laws have been introduced. Without them, an individual wouldn’t necessarily be assured of confidentiality. Is it a serious concern? You bet. In the first half of 2022, over 53 million people in the US were affected by data breaches

Some of these breaches will be relatively trivial affairs, but some will involve highly personal data, the exposure of which can be damaging in all kinds of ways. 

2. The organization’s benefit

Put bluntly, companies and other bodies had better protect privacy, or they’ll be fined massively. Especially in the US.

Cost of a data breach

Image sourced from blog.netwrix.com

Even if a company’s based outside the protected territory, it may still be liable for fines following improper data use. For instance, if a Japanese company’s actions compromise the privacy of a UK citizen, they can be held accountable for this and may have to face a fine. 

Apart from the financial impact of the data privacy fine, there’s the injury to the company’s profile. If they’d like to be synonymous with a shoddy lack of care, this is an excellent way of achieving this makeover. Consequently, it makes sense for a company to pay adequate attention to its data privacy operation. 

Moreover, a company failing to treat data properly contributes to a generalized lack of trust in all such bodies. For our net-reliant systems to work correctly, there must be buy-in from users. If users don’t trust the systems, they won’t use them. This means that the systems will eventually flounder. This will be to nobody’s benefit – user or business. 

So data privacy must be protected and promoted. 

» Data Security

Data security

Data security is about how an organization prevents data from being misused or accessed without authorization. So, it’s how data privacy is ensured. 

This means that data security is entirely made up of the security solutions that an organization has in place that govern the use of data once it has been acquired. 

So, what this means in practice is spreading behavior among the staff, such as remembering to log out and not leaving any device that gives access to data unattended. It can also mean using tech such as SignDoc to ensure that documents are trusted.

What’s important to grasp is that there might be a tremendous emphasis placed on data security in theory: the company may prioritize it as an absolute priority. But this will mean nothing if the actual processes, i.e. what happens to that data, are substandard. So, you must expend a good deal of effort to ensure all staff understand and comply with data security rules.

An important part of this is seeking input from staff on their data security experience. Their valuable feedback can assist in the formulation of improved procedures. 

But, with the best will in the world, systems can fall by the wayside. Companies having unrealized principles are nothing new. But, as we’ve seen, they can be calamitously expensive mistakes with matters to do with data. 

» Why Does Data Security Matter?

Simply because, without it, data privacy is shot. For the tenets of the GDPR etc., to have any hope of succeeding, organizations have to put in place procedures and techniques that will allow data the protection it’s supposed to have. So, adequate security mechanisms are a must. 

Moreover, once the procedures are visibly in place, it becomes clear that the organization values data protection. This will seep into the customer experience. When this happens, it inculcates understanding in customers when they see that data issues are being taken seriously so that they will tolerate enhanced ID checks, for instance. 

Why does data security matter

It will also encourage constructive behavior in staff. Suppose it’s made clear that regulatory compliance is expected across the board regarding data security. In that case, it will seep into the company culture, and positive change will result. Conversely, if there’s a casual attitude to data security in evidence in the upper reaches, it will rapidly spread throughout the organization. 

For instance, a senior manager is known to be a bit of a security nightmare, with their specialty using the word Password as their password. No apparent sanction seems to be applied due to this manager’s errant ways, so it appears the company views them as relatively trivial. 

Consequently, more and more staff become similarly casual in their approaches to data security, with the net result being breach in data privacy that are painful to all concerned. 

So, the lesson here is consistency. Data security must be adhered to by all elements of the organization, from cleaner down to the CEO, and all processes must be, from completing payroll to using a contract generator free from the possibility of access by an unauthorized user.  

» Differences Between Data Privacy & Data Security

So, we’ve covered the main difference. Let’s look at three other specific distinguishing features. 

1. Different safety goals

Different safety goals

Data privacy is all about the handing over of data, in the first place, to a (hopefully) trusted body. If data privacy rules have been followed by everyone concerned, then the risk of data being sold is minimized. Often, you can trace data selling to disgruntled employees, so it’s vital to ensure that the data is accessed only by those in the organization who have authorization.

On the other hand, data security is all about the rules and procedures that prevent that data from being accessed primarily by external threats. Consequently, good data security protocols are aimed at keeping data safe from hackers. 

2. Privacy = users’ domain; security = organization’s domain

Users determine what data they’re sharing and with whom they’re directly sharing it. This means that, as far as data privacy is concerned, it’s much more about the user than the organization. Once that data’s been shared, however, it’s no longer the user’s preserve, at which point it becomes more in the organization’s remit of procedures aimed at protecting data security. 

Often, a user will be given the opportunity of dictating the level of information sharing (i.e. the exact level of data privacy) that they’re happy with. It is then incumbent on the organization to ensure compliance with those wishes through robust data security practices. 

3. Legislation

The data legislation tends to cover data privacy, not data security. In other words, the result is protected, but how companies get there is down to them. 

» Where They Overlap

Before putting in any data security protocols, you must assess exactly what data your organization needs to acquire from an individual. Once you know that, you’ll have a clearer idea of the data privacy situation. For instance, if you need your customer’s contact details and their purchase history, this information must be kept private. 

This data privacy requirement then feeds into data security. If you have their contact details and purchase history, what procedures need to be put in place to protect them from unauthorized access? Or if a company has submitted a software project proposal to you, how should you ensure that business’s data privacy?

Additionally, your data privacy remit should require you to think carefully about whether you need all the data you thought you did. 

For instance, if you’ve been assuming that information about likes and dislikes is a crucial part of a customer’s record, but it turns out you’ve been doing nothing with this, you can get rid of this data. This then feeds into data security as, along with less data, comes (potentially) less need to follow certain procedures. 

» Because Data’s Worth It

Here’s a nice short way to think about the differences between the two. Data security is a vital enabling part of data privacy: in other words, privacy can’t exist without security. 

However, security can exist without privacy. How? Because all the procedures might be in place to give security, but if the data’s been handed over without proper permission, privacy’s compromised. 

If a user specifies that their buying history is only to be looked at to produce in-house personalization marketing, and instead, it gets sold to another organization entirely, then it doesn’t matter how many password protocols are being used; that privacy’s left the building. 

The truth is there should be overlaps. For data, confidentiality to be given proper priority and for the level of risk of unauthorized access to be reduced, data privacy and data security should work together. 


Author Bio: Yauhen Zaremba – Director of Demand Generation

Yauhen ZarembaYauhen is the Director of Demand Generation at PandaDoc, an all-in-one document management tool for almost all types of documents including this PandaDoc commercial proposal example. He’s been a marketer for 10+ years, and for the last five years, he’s been entirely focused on the electronic signature, proposal, and document management markets. Yauhen has experience speaking at niche conferences where he enjoys sharing his expertise with other curious marketers. And in his spare time, he is an avid fisherman and takes nearly 20 fishing trips every year.

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