Do you know that the average global cost of data breaches associated with personally identifiable information reached 4.46 million dollars in 2023? This is according to an IBM report called Cost of Data Breach 2023.
The increase can be attributed to the value of consumers’ personally identifiable information PII. According to the Open Business Council, the average value of a customer’s personally identifiable information is $175, making it valuable to hackers.
By reading this article, you will better understand personally identifiable information and its importance to consumers and businesses. In addition, we will also distinguish between sensitive and non-sensitive PII and talk about PII compliance within the regulatory framework.
Key Takeaways
- Always use a strong password for each account you create
- PII information is data that can be used to identify the consumer
- Businesses that fail to encrypt the data of their consumers can be fined under the GDPR act
Defining PII
PII stands for personally identifiable information. PII is any information that can be used to identify a consumer. The information can be used as one data set or with a combination of other identifiers.
Information identifiers can either be direct or indirect. An example of direct identifiers are the consumer’s name, address, or social security number. Indirect identifiers are subjects such as the job title or zip codes. They also include GPS coordinates, medical records, and browsing data.
Personally identifiable information PII can be identified based on the context of sensitivity.
For example, an IP address is not necessarily considered a PII. However, if the IP address is combined with other data sets, such as the consumer’s name, it becomes a PII.
Forms and Categories of PII
There are several forms and categories of personally identifiable information. The classification is important because it helps to manage and protect personal information effectively. The most common type of PII is personal identifiers. Personal identifiers include names, email addresses, social security, and phone numbers.
Other forms and categories of personally identifiable information are:
- Biometric data: This information captures biometrics such as the face and fingerprints. It also includes retinal scans.
- Online identifiers: An example of this is IP addresses and online identifiers such as cookies that can track the consumer.
- Financial information: This category includes financial information such as credit card numbers and private bank details.
PII can also be categorized into demographic data such as age, gender, race, and ethnicity. How diverse is personally identifiable information?
- Education sector: The education sector has a lot of personally identifiable information, such as student transcripts and biometric data. Identifiable information can also be sourced from usernames and passwords found in e-learning platforms.
- Social media platforms: Facebook and Twitter have many consumer PII such as their names, addresses, and photos. Messages and posts can also create a rich set of PII, which can be used to identify the consumer.
- Healthcare: Personally identifiable information PII that can be found in the healthcare industry include medical records and patient portals. Medical records can reveal information such as the names and addresses of the patients. In addition, patient portals can also reveal the patient’s username and password.
- Finance: In finance, PII data, such as the routing and account numbers, can be found in your bank details. In addition, PII data can also be found in nicknames and business accounts. The information can also be found in credit card purchase receipts and tax filing documents.
The Role of PII in Modern Society
Personally identifiable information plays a big role. For starters, it makes it easy for businesses and consumers to interact commercially. For example, a bank requires your PII data to meet KYC requirements and give out loans.
Apart from traditional banking, PII is also used by online service providers to get a digital passport for the consumer. The information is obtained through usernames, passwords, and payment details.
PII data is also used for verification and enhancing government and private services. For example, you must provide your social security card or driver’s license to verify your identity.
PII is also used by businesses such as Google and apps to tailor consumer experience depending on their purchasing or browsing habits. For example, Google gives your information to advertisers so businesses can create more accurate and targeted adverts.
Businesses, especially HR departments, use PII data to enhance their operations. HR uses this data to know their employees and evaluate their workforce.
PII is also used in the travel and transportation industry. The information tracks consumers who book holidays, flights, and accommodation. The type of PII used for this transaction includes passport details and driver’s license information.
Intersection of Technology and Personal Information
The intersection of technology and personal information has resulted in new opportunities and challenges, especially in PII compliance. Technology also reshapes how personally identifiable information is collected, stored, and processed.
An example is big data and analytics. Big data technologies process large amounts of information to predict purchasing behavior. Depending on race and location, big data and PII information can also determine consumer purchasing power.
The use of technology has raised concerns about data breaches and identity theft. As a result, there has been an increase in demand for PII compliance to protect consumer data. This has resulted in the establishment of several PII compliance laws.
One of these laws is the Gramm-Leach-Bliley Act, which protects consumers’ financial information. Businesses that fail to comply with the Gramm act can be fined $100,000 per violation.
Another important PII compliance law is the Children’s Online Privacy Protection Act {COPPA}. Businesses that violate COPPA laws can be fined up to $40,000 per violation. The law protects the privacy of children under the age of 13 years.
Understanding PII Sensitivity
Not all PII data is equal. Some types of information are deemed too risky to share because of the negative financial and legal consequences it might have. Data is often context-dependent. For example, an average email address can be considered non-sensitive. However, it becomes sensitive if the email address belongs to the Department of Defence.
Sensitive PII is information that, if disclosed to the public or misused, can result in serious harm, discrimination, or privacy violations. Examples of sensitive information include social security numbers and financial records such as bank account details and credit card numbers.
Non-sensitive PII is information that does not pose an immediate risk to the consumer if disclosed. An excellent example of this is email addresses, names of the consumer, or phone numbers.
Implications for Mishandling Sensitive PII for Individuals and Businesses
Mishandling sensitive data has several implications for businesses and consumers. One of the implications is identity theft and fraud. Identity theft occurs when someone steals your information, such as your social security and credit card numbers.
Sometimes, identity theft can occur because a business fails to encrypt consumer information. As a result, the business can be penalized under various laws, such as the California Consumer Privacy Act.
As a consumer, mishandling your sensitive PII can result in serious privacy violations. This can result in emotional distress or even harm your reputation. For businesses, this can result in legal action under various laws such as the CCPA or HIPAA.
Businesses and consumers have an ethical responsibility to properly use PII. These responsibilities include setting up security measures such as access controls and encryption. When dealing with minors, businesses must provide informed consent.
Regulatory Landscape
PII compliance is critical because it ensures businesses comply with relevant laws. Examples of laws set up to ensure PII compliance are:
- General Data Protection Regulation: This law was set in the European Union to protect the rights of consumers and their personally identifiable information.
- California Consumer Privacy Act: This regulation applies to businesses operating in California. It gives consumers power over their private data and the power to demand their information to be deleted.
- Personal Information Protection Law: The law was enacted in 2021 in China, regulating how Chinese-based businesses process and use personal information.
- Personal Data Protection Bill: This is an Indian bill that includes principles similar to the GDPR. It aims to protect Indian consumers’ personal information.
Other laws enacted to ensure PII compliance include Kenya’s Data Protection Act of 2017 and Brazil’s privacy law, Lei Geral de Protecao de Dados Pessoais.
Legal definitions surrounding PII will vary depending on the country or state. However, it is generally acceptable that PII is any information used to identify a consumer. Most jurisdictions worldwide have created data protection frameworks based on transparency, accountability, and security.
Therefore, when navigating the world of regulatory compliance, you must factor in the above. To be safe, consider obtaining consent from consumers before processing their data. In addition, factor in data subject rights. Data subject rights include accessing, rectifying, and deleting, and delete information.
Compliance requirements also require businesses to be transparent and report data breaches immediately.
Importance in Privacy and Security
Personally identifiable information PII holds excellent value for consumers and businesses. However, with great power comes great responsibilities. Proper use of PII information is not just a legal obligation but also an ethical and moral one. Consumers and businesses need to ensure the privacy of PII data through effective management.
Many things are involved in effective management, including minimizing data exposure. This reduces the risk of the information being accessed by third parties. Minimizing data exposure will also require businesses to adhere to data minimization principles.
Another effective management strategy is to provide informed consent to consumers. This gives consumers power over their data and also builds trust.
It is important to note that there is a critical link between PII and personal security. Failure to protect your private data may result in identity theft. In addition, you can also become a victim of financial fraud, harassment, or stalking.
The implications of inadequate PII protection include reputational damage and regulatory consequences. Reputational damage is caused when consumers lose trust in a business’s capacity to protect their data.
PII in Business Operations
PII is integral in customer relationship management in several ways. One of them is consumer identification and personalization. Businesses can accurately identify their consumers using metrics such as name, contact details, and phone numbers.
In addition, PII makes it possible for businesses to make data-driven decisions that positively impact their operations. For example, businesses can make informed strategies that increase their competitiveness by analyzing consumer preferences and purchasing habits.
PII is also used to create loyalty programs because businesses can track the purchasing habits of their consumers and reward them.
Businesses should adopt transparent PII practices to enhance trust with consumers. One strategy for enhancing trust is having clear privacy policies and consent mechanisms. The policies should inform the consumer of the type of information being collected and processed.
This is important because it enables you to build trust with your consumers, leading to a stronger relationship.
Another strategy is implementing robust security measures to protect personally identifiable information. Robust security measures include encryption, access controls, and secure storage.
Lastly, trust can be built by creating transparent data breach response protocols. Data breach response protocols are a guideline of what is done when a data breach is detected. Creating data breach response protocols demonstrates accountability and helps mitigate reputational damage.
Business Consequences of Neglecting PII Compliance
One main consequence of neglecting PII compliance is that your business might be slapped with a lawsuit. These lawsuits are not cheap. For example, Meta was once fined more than 1.2 billion euros for GDPR violations.
Another consequence is that you risk damaging the reputation of your brand and eroding customer trust. This may cause a decline in market share and reduced loyalty.
Also, neglecting PII compliance can disrupt business operations, resulting in loss of business. The aftermath of a data breach includes investigations and remedial actions that hold up crucial resources.
The Digital Footprint: PII in the Digital Age
If you look carefully, PII information is everywhere. When browsing the internet, you will use cookies. Cookies will track your web journey, including visited websites, search queries, and preferences. Advertisers use this information to deliver target Ads.
PII information is also found in e-commerce and online transactions. Online transactions involve exchanging personal information such as your name, credit card details, and address. Online retailers use this data to optimize their marketing strategies and increase sales.
PII has evolved due to new technologies such as Big data and social media platforms. Today, PII is more than just a name and an address; it includes identifiers such as an IP and social media handles. This has resulted in the need for more comprehensive data protection laws.
Social media platforms contribute to digital footprints through user-generated content such as posts and videos shared online.
Similarly, businesses use big data to extract trends from PII for targeted marketing and personalization.
Businesses need to balance convenience and privacy. Balancing includes implementing privacy settings and giving consumers power over their data. Other things that businesses can do include data minimization and creating consent.
Educating Individuals on PII Awareness
Consumers need to be educated about PII because it enables them to make informed decisions about the type of information they should share. This prevents exploitation, especially by big businesses that make money using PII.
Educating consumers about their PII is also essential because it protects them from identity theft. This is because they will undertake proactive measures to safeguard their private data. Lastly, it becomes safer to browse the internet when you know what digital footprints are.
When browsing the internet, there are certain things that you should do to protect your PII. These are:
- Creating strong and unique passwords for each account
- Using privacy settings or VPN to remain anonymous
- Reading and familiarizing yourself with phishing attempts
- Learning about secure online protocols like HTTPS and SSL certificates
This information can be gotten through formal, informal, and online resources.
Navigating Ethical Dilemmas
Businesses often struggle with ethical dilemmas in collecting and processing PII information. This is often a result of the need to collect tons of data to maximize profits while at the same time not infringing on the rights of the consumer.
When collecting information, businesses must adhere to ethical practices such as obtaining informed consent. This helps consumers know that their information is being collected. Another ethical practice is to limit the amount of information being collected. This prevents misuse of the collected data and promotes trust.
Businesses should also ensure that sensitive information is encrypted and protected from data breaches.
When implementing ethical PII strategies, there is always a conflict between the business and the consumer. This should not be the case because there can always be a balance. The balance can be created by creating a transparent system and openly communicating with the consumer.
Another way to create balance is to implement robust security protocols that assure consumers that their information is safe. Lastly, a balance can be created by having consent and opt-out mechanisms.
A good case study of ethical PII decision-making is when a hospital seeks consent from a patient to share their medical record with a research facility.
Another example is when a Smart City surveillance project balances the need for public safety with ethical considerations about privacy infringement.
Closing
Businesses have a moral, legal, and ethical obligation to protect the rights of their consumers. However, balancing business and consumer interests can be challenging. However, don’t worry because we have come to the rescue.
We have years of experience dealing with personally identifiable information and with legal frameworks that govern consumer data. We will help you balance business and consumer interests and protect you from hefty GDPR fines.
Give us a call today and start your journey in PII compliance!
FAQs
1. What is PII management?
PII management handles PII information to ensure the process complies with privacy regulations.
2. What is the best way to handle PII data?
The best way to handle PII data is by minimizing data collection, implementing robust security protocols, and obtaining informed consent.
3. What is an example of PII data?
An example of PII data is your full name, social security, and credit card details. PII data can either be sensitive or less sensitive.
4. What measures can I take to safeguard my PII online?
Some measures to safeguard your PII online include using strong passwords, learning about phishing, and being mindful of what you share online.
