What is the Data Minimization Principle and what are the benefits

data minimization principle

In the age of big data, companies are leveraging data and analytics to get valuable insights for making intelligent business decisions and staying on top of the competition.

With the Internet of Things and digitization, it is getting easier for companies to collect tons of consumer data and keep it for future use.

However, some companies tend to save a lot of useless data. Doing so increases the risk of privacy breaches and makes it costly and difficult to retrieve and manage.

This is where data minimization comes in. Read on to find out about the data minimization principle and its benefits to your business.

Provisions of Data Minimization

The data minimization principle refers to the practice of limiting the collection of personal information to data that is relevant and necessary to accomplish a specific purpose.

It is part of the EU’s General Data Protection Regulation (GDPR) which mandates businesses to collect data that is relevant, adequate, and limited to what is necessary, with regards to the purpose for which it is being processed.

Meaning you should not collect or store any information that is excessive or adds no value to the purpose of its collection.

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According to the GDRP, individuals also reserve the right to have you delete any personal data that is unnecessary for your purpose.

However, data retention for longer is permissible for future statistical purposes. Note that the data minimization principle is also incorporated in other laws such as the 2018 California Consumer Privacy Act (CCPA) and the 1998 Data Protection Act.

When collecting and processing personal information, it is essential to understand the provisions of the law concerning data minimization to ensure compliance.

You can work with a law expert to help you familiarize yourself with data protection regulations to avoid legal problems and promote better data handling.

The data minimization principle comes with numerous benefits for your business. Note that data’s value reduces quite fast, making it unnecessary to store information for longer than you need it.

It is, therefore, in your business’s best interests to only collect relevant and adequate data and discard any information that doesn’t add value to your goals.

Here are a few benefits that your business gets to enjoy by adopting data minimization.

benefits of data minimization

1.Reduces Costs

Data minimization allows you to collect and store only the data you need. You, therefore, spend less on data collection and storage, which leads to savings.

2.Reduces Data Theft

Collecting large amounts of data, especially personally identifiable information (PII), exposes your business to substantial risks in case of a data breach.

Data minimization can help you reduce data theft by decreasing your data footprint that requires security. The principle also allows you to limit the number of records that may be affected in case of a data breach, thereby protecting your business against costly fines.

3.Adherence to the GDPR compliance

Infringements of GDPR provisions can lead to fines up to €20 million, or 4% of total worldwide annual turnover, whichever is higher.

However, compliance is not just about avoiding fines, there are numerous benefits of complying with applicable data protection laws, like maximized efficiency, digitalization, improved customer experience, improved risk management, better marketing, a better quality of data, and more.

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4.Better data management

The less data you have in your systems, the less time you need to retrieve it. It is also easier to manage small amounts of data instead of hoarding large amounts of data with no value.

Lastly, your employees will always be confident that the data they use at any given time is accurate and current if you regularly delete obsolete information.

5.Faster Response to Data Requests

The law gives consumers and individuals the right to request the deletion of their data. It also requires businesses to respond to requests within a specific timeframe.

With fewer data to work with, you can respond promptly to data requests from consumers and avoid legal problems.

6.Improved Customer Trust

Gathering too much personal information from consumers can lead to mistrust and even loss of clients.

According to a study, about 84% of consumers refused to engage a business because they demanded too much personal information.

Since data minimization promotes proper handling of data and limits the amount of information you collect, it inspires customer trust. This, in turn, leads to better customer retention.

Relevant, adequate, and limited

With the growing information infrastructure, more data protection laws are likely to be put in place to safeguard consumer data.

Adopting data minimization in your business prepares you for future regulations, if any, and makes it easy to align your company with them whenever necessary.

While collecting data is becoming easy, it also comes with legal responsibilities to ensure the safety and privacy of customer information.

As a business, you should implement adequate measures to ensure you only collect the data you need and discard it when it’s no longer valuable. Doing so ensures you stay compliant with data regulation laws and minimizes your data footprint.

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