For brands and ecommerce businesses, responsible customer data management matters more than ever. From the European Union’s General Data Protection Regulation (GDPR) to the California Consumer Privacy Act (CCPA), the California Privacy Rights Act (CPRA), and China’s Personal Information Protection Law (PIPL), as well as similar privacy laws and data privacy mandates in Brazil, South Africa, Thailand, and Canada, pressure is mounting on organizations everywhere to implement systems and processes that ensure secure data collection and management.

Why data governance and compliance matters

Companies that don’t comply with data privacy regulations do so at their peril. Failure to prioritize data compliance can lead to major penalties — maximum fines of up to 4% of the company’s previous financial year’s worldwide annual revenue for GDPR breaches and up to 5% of its annual revenue for a PIPL breach, or $2500 for every unintentional CCPA violation and $7500 for every intentional CCPA violation.

But the repercussions are not just financial. In an era when 48% of US consumers say misuse of their personal information has caused them to lose trust in a brand, your brand’s reputation is also at stake.

So, what can your organization do to avoid a costly data breach?

Knowing that your customer data is stored in a secure, centralized repository is a great place to start. For this reason, a customer data platform should be considered foundational to your data compliance strategy.

A CDP is a prebuilt system that creates a unified customer database by collecting data from multiple sources such as servers, customer relationship management (CRM), social media, and email, creating individual profiles, and making these accessible to other systems in a way that prioritizes data security.

Let’s take a closer look at how the customer data platform’s various use cases ensure your organization not only complies with data privacy regulations but also helps to foster customer loyalty and improve retention.

Removing data silos

To comply with data privacy regulations, companies must be transparent about the types of data they collect and how it’s collected. This process is complicated when a business’s systems and touchpoints are fragmented and siloed.

As a key functionality, CDPs help streamline and centralize infrastructures by eliminating data silos and providing a single source of truth that provides greater visibility and control over consumer data.

This is crucial when managing consumer compliance inquiries that require organizations to locate source data without delay so that deletion requests can be fulfilled within a given timeframe.

Unifying customer data

Unlike data management platforms (DMPs) which rely on third-party data, the customer data platform uses first-party data to identify and consolidate customer actions, building an accurate, unified customer profile and is designed to collect data from all channels and sources including transactional, demographic, and behavioral data.

As part of the identity resolution process, customer data platforms track every customer interaction throughout the customer journey, where it has taken place, and attribute this action or customer behavior to the right customer profile, aggregating the information in the same place.

Having this information in one location makes it possible to unify and assemble a complete set of personal data which can be reviewed, corrected, and exported when required.

Connecting with data sources

By connecting with data sources, the CDP collects data from source systems and may also feed data back to them. This allows CDP operators to keep up with any updates in the source systems and ensure their connections are not malfunctioning. The process also helps to support data privacy requirements including data correction and deletion which require connections to customer data repositories.

Providing a single customer view

Data privacy regulations including GDPR and CCPA require businesses to comply with the right to be forgotten. By providing a single customer view of individual customers, a customer data platform makes it possible to delete a customer’s profile in one click. Subject access requests (SARS), even large, multiple requests can be carried out at short notice. Non-essential information can also be removed if necessary, without the need to delete all data.

Privacy by design

According to GDPR requirements, systems need to be designed with privacy in mind. This means that organizations must implement technical and organizational measures that support data protection principles.

A CDP meets these requirements by centralizing access to a customer’s personal data and sharing this data with other systems, without these systems directly accessing each other’s data. In doing so, the customer’s data privacy remains intact.

Sitecore CDP and customer data compliance

Sitecore CDP is an advanced customer data platform that takes a privacy by design approach to enable your business to track real-time behaviors as customers interact with digital touchpoints such as websites, mobile apps, and email messages, with or without capturing the customer’s PII (information that directly identifies individuals).

By elevating the customer experience while providing the peace of mind that customer data is protected, and marketing activities are compliant with privacy regulations, Sitecore CDP enables organizations to build the types of standout marketing campaigns that drive customer engagement and retention.

Discover more about how a customer data platform can help your organization build loyalty and trust or get to know the advanced capabilities of Sitecore CDP.

Fiona Hilliard is a Content Marketing Manager at Sitecore. Connect with her on LinkedIn