June 23, 2022

Importance of Data Security (Part 1)

Importance of Data Security (Part 1)

Data security is not a luxury or aforethought anymore. A growing number of data-driven companies with the likes as Alphabet, Meta, Microsoft, Apple, and Amazon view data as one of their most valuable assets.

In an increasingly digital world, businesses today recognize how critical data security is in maintaining their reputation, safeguarding the integrity of their employees, and protecting their customers’ privacy.

In this 3-part series, we give you in-depth knowledge on data security and its importance, the level of centralization in data management, and weighing the issues of privacy in centralized data management systems and how blockchain comes to the rescue.

What is data security?

The term data security refers to a set of policies and procedures that protect vital information. This involves protecting electronic data from unauthorized access, corruption, or theft. In addition, data security encompasses any aspect of information security, imparting physical security to hardware and software and administrative and access controls to software applications.

Cloud services and scattered data

The security narrative is incomplete without cloud services since a majority of businesses switch from on-premise hardware to the cloud.

One of the fastest-growing segments of IT is public cloud services. While the cloud opens the door to more applications, helps foster collaboration between teams, and improves data management, security remains a major issue when utilizing cloud services.

Most compute capacity and data crunching is rented from Amazon's public clouds with the annual revenue of Amazon’s AWS hitting $71 billion. In fact, AWS had its best year-on-year

performance in the fourth quarter last year, according to Brian Olsavsky, chief financial officer for parent company Amazon.com. Data integrity within cloud storage is a major concern for individuals and companies alike. Enterprises that often use centralized cloud storage providers (CSPs) to store their data often cannot see through how these providers monopolize the market and lock in their customers to rigid storage plans.

Gartner Inc. reports that worldwide spending on cloud-computing infrastructure services rose by about 32 percent last year to $59.2 billion and that it is expected to reach $106.8 billion in 2022. Dealing with multiple service providers, however, can be complicated. According to industry officials, each has a unique way of dealing with the underlying technology, such as storage or networking, and moving data between clouds can be difficult.

Threats in cloud storage

Many organizations have been shifting more core business to cloud platforms thanks to the rapid development of processing and storage technologies. However, all these benefits are contingent on the third party meeting its share of responsibility for the business data's security, integrity, and accessibility. The concerns regarding cloud security can be categorized into:

  1. Data security concerns faced by cloud providers, such as cyberattacks, malicious insiders, and external sharing of data
  2. Data security concerns faced by customers

Importance of data security

Most companies benefit from using, acquiring, saving, and exchanging data. It is vital that companies and organizations protect their proprietary data - including confidential client information, financial transactions, knowledge archives, and infrastructure. Some of the primary reasons which highlight the importance of data security include:

  • Continuity of operations: Data is an important asset for most business decisions and operations, which must be protected from corruption and unauthorized access from within and outside the company. The security of data entails routine backups and the availability of copies of original data in the event of lost or inaccessible information, thus ensuring business continuity.
  • Prevent unauthorized access: In the absence of security, companies are essentially making data stored in computers, smart devices, peripheral equipment, and networks vulnerable to hackers. An increase in security measures, like additional layers of security, can help prevent unauthorized access to business systems and equipment.
  • Prevent data breaches: Data breaches result in several negative consequences for businesses, such as loss of public trust, impact on business profitability, legal consequences, and financial costs.

The extent of such breaches can be greatly reduced if personal credentials are not stored on a company's central database where consumers are compelled to give up their right to privacy by providing their email addresses, phone numbers, Social Security numbers, credit card numbers, and more to their accounts. There have been numerous breaches of personally identifiable information, including names, passwords, and even static biometrics as a result of centralized processing. As privacy and sovereignty become increasingly important, we can see a shift toward decentralization. In terms of technology and organization, how do we design cloud systems that integrate decentralized information systems in a way that allows the user's privacy laws to be respected? More in the second part of the Data Security Series.