New privacy laws are forcing companies to catalog the data they have on consumers. Here's how vendors are helping them meet a key deadline.
- Privacy laws in California and the European Union are forcing companies to take stocks of the mountains of data they have on customers. But many aren't even aware of how much information they have.
- Vendors are using machine-learning-powered products to automatically catalog data, an improvement over the physical audit that companies used to rely on consulting firms for.
- Once that's done, organizations can assign different sensitivity levels to data. Social security numbers, for example, will likely have a stricter classification than email addresses, meaning fewer employees can access the information.
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Privacy laws in California and the European Union, along with efforts underway across corporations to overhaul their tech capabilities, are forcing companies to take stock of the massive amounts of data they have stored.
The problem? Many organizations aren't even aware just how much is actually kept in different databases across the firm. Now, CEOs and boards of directors are rushing to try to catalog all that information and, given the immense amount of data, are needing to bring in vendors to help accomplish that task.
Businesses "don't even know what data they have," Satyen Sangani, CEO and cofounder of Alation, a data services company in Redwood City, California, told Business Insider. "They don't even know what data exists about these consumers."
Alation is one of a slew of vendors that help companies like Safeway Albertson, eBay, and General Electric create and curate "data catalogs" - think a warehouse of data that is structured in a common and searchable format. Others include Waterline, Okera, and Privacera, all of whom, in speaking to Business Insider, described the accelerated pace under which firms are tackling the data organization challenge due to new or incoming legislation. California is introducing its privacy law in January, while the European Union implemented its own measure last year. Broader digital transformation and the race to implement machine learning are also pushing enterprises to a crop of data service shops.
'As the fines begin to roll out, people are getting really worried': New privacy laws have organizations on the ropes
California's law effectively empowers consumers to have greater control of their personal data online by requiring companies to, among other things, allow users to prohibit organizations from selling their information.
Companies are scrambling to ensure compliance ahead of its January implementation. Okera, one of the vendors who offer data security services, is fielding new calls just a few months before. Even with the pending deadline, however, some firms are waiting to see how aggressively the law is enforced - under the measure, consumers can sue for $750 per violation - or whether further guidance is provided.
"A lot more people are talking to us. The challenge is people are not yet acting on it," said Amandeep Khurana, CEO and co-founder of data privacy firm Okera. "Some aspects of the law are not clearly defined … which is preventing people from making big decisions."
California's measure is the nation's first sweeping privacy law, though others could soon follow. It is similar, though not exactly the same, as Europe's General Data Protection Regulation. While that statute took effect last year, it is leading to a bump in inbound calls to data security vendors - particularly as more companies like Marriott or British Airways are subject to penalties.
"As the fines begin to roll out, people are getting really worried," Waterline founder Alex Gorelik told Business Insider. "It's a real nightmare."
That is where companies like Alation and Waterline are stepping in. "Manually, it just doesn't work," Gorelik said. "People are now spending real money to address it."
As consumers become more empowered, companies need to track data better
Machine learning tools can automatically wade through millions of rows of information and automatically code different lines based on the inputs that companies provide - like addresses, social security numbers, or even t-shirt size.
Once that data is tagged, companies can go back and assign sensitivity levels to huge groups of information. Social security numbers, for example, would be ranked a higher sensitivity than email addresses or t-shirt sizes. That can help determine how widely to allow access within the organization.
Often companies will open these databases for employees to use to test new AI-based applications. Products like Okera's create unique dashboards for each worker based upon what their access level is. The landing pages vary, but often allow users to search in a similar manner to a web browser for broad categories then view top-line summaries of what data is included, as well as specific data fields.
While a small segment of employees may have access to the more confidential information, a wider swath is likely to be able to view and use a category like home addresses for testing advanced applications that rely on location data, like programs that help telecommunications companies decide where they should put new 5G towers based on where the signals will be most effective.
The new privacy laws also require companies to have a business justification for collecting data from customers. Pizza companies, for example, must obtain consent before it can use your address for marketing purposes. The database tools allow companies to easily tag those when consent has been given to use data for reasons other than the stated purpose.
Consumers can request an audit of what data a company has stored on them. Being able to automatically assign customer information to data makes that task much easier. Now, instead of having to spend weeks pulling from various databases, an organization can pull up all the stored information by selecting a specific user.
For many organizations, this is the first time they are undergoing the effort of cataloging all their data. Vendors can help make that task much easier and leave companies to focus on the larger issues, like figuring out how to use that customer information or other data to generate new revenue.