Data privacy vs data security: Key differences explained

The importance of data has sparked a digital gold rush, where organizations are eager to collect as much as possible to improve their operations, customer experience, and especially their bottom line. However, data’s great value brings significant risks, which is why privacy and security regulation are essential for protecting this valuable asset. Privacy determines who has the right to access information and how it can be used, while security defends it against unauthorized use or theft.

As digital technologies that can collect vast and often sensitive amounts of personal data advance, the importance of data privacy and security continue to evolve as well. Early data management focused on security to protect sensitive information from physical threats or unauthorized access. However, the proliferation of social activities and business on the internet, and the resulting proliferation of personal data online, have increased the importance of privacy as a separate but equally critical concern.

Milestones like the introduction of the General Data Protection Regulation (GDPR) in 2018 emphasized individual rights to control personal data. Meanwhile, escalating security threats, such as high-profile breaches and cyberattacks, have highlighted the need for stronger protections to maintain security and trust in the digital era. Together, privacy and security form the foundation of ethical and responsible data practices.

What is data privacy?

At its core, data privacy involves individuals’ rights to control how their personal information is collected, shared, and used. It emphasizes transparency and accountability in handling data to respect users’ choices.

Key principles of data privacy include:

• Consent: collecting data only with explicit (and ideally granular) permission
• Purpose limitation: using data only for specific, clearly defined purposes
• Data minimization: collecting only the information necessary to fulfill stated purposes
• Data accuracy: Keeping personal data complete, accurate, and up to date
• Security safeguards: Protecting data from breaches and misuse
• Openness and transparency: Informing users about how their data is handled and protected
• Individual participation: Providing individuals the right to access, correct, or delete their data

Laws like the GDPR and the California Consumer Privacy Act (CCPA) codify these principles, requiring organizations to build trust by respecting privacy rights and meet various requirements.

What is data security?

Data security refers to the measures and practices used to protect data from unauthorized access, breaches, or misuse. It focuses on safeguarding information — with increased measures for more sensitive data — to maintain trust and prevent harm.

Key principles of data security include:

• Confidentiality: restricting access to authorized individuals
• Integrity: preventing unauthorized modifications or alterations to data
• Availability: making data accessible to authorized users when needed
• Accountability: holding organizations responsible for protecting their systems

Standards such as the NIST Cybersecurity Framework and ISO/IEC 27001 provide guidelines for implementing security measures that protect against threats and align with global best practices.

Data privacy and security use cases

Understanding the roles of privacy and security is only part of the equation. In practice, they address distinct yet interconnected challenges, creating a foundation for responsible data management.

Data privacy and security in Healthcare

In healthcare, privacy governs how sensitive patient records are collected, accessed, and shared. Regulations like the GDPR give patients the right to know who views their data and why. Security, on the other hand, protects these records from breaches using encryption and secure storage, critical for privacy compliance with the GDPR and targeted regulations like Health Insurance Portability and Accountability Act (HIPAA).

Data privacy and security in Ecommerce

For ecommerce businesses, privacy involves enabling customers’ to opt out of use of their personal data for targeted advertising and profiling, among other uses. This aligns with the CCPA’s focus on transparency, even though under the CCPA consent is not required for most instances of data collection and use. Security protects stored data, such as payment information, using tools like firewalls and tokenization. Together, privacy and security maintain trust to protect revenue and brand reputation while meeting legal obligations.

Data privacy and security in Finance

In banking, privacy dictates how sensitive information like account information and transaction histories are accessed internally or shared with third parties. Security safeguards financial data with encryption and fraud detection systems. These measures help to protect against breaches while complying with broad data privacy laws, as well as sector-specific regulations, such as PCI DSS.

Emerging challenges in data privacy and security

As organizations implement evolving strategies to manage data privacy and security, they face a rapidly changing environment shaped by new challenges and trends, as well as customer expectations.

AI and data processing

Artificial intelligence has transformed how businesses analyze data, providing valuable insights that drive personalization, improve customer experiences, and optimize operations. However, AI’s reliance on large datasets introduces ethical concerns, including for automated decision-making. For instance, AI algorithms used in hiring processes may inadvertently reinforce biases present in the training data, leading to unfair outcomes. Similarly, predictive analytics in marketing can blur ethical boundaries by making assumptions about individuals based on patterns without their explicit consent.

Another issue is the lack of transparency in how AI models process data (and if consent was ever obtained for the data access). Known as the “black box problem,” this lack of explainability makes it difficult for businesses to prove compliance with regulations like the EU AI Act and GDPR, which require organizations to justify decisions made using personal data.

Addressing these challenges involves adopting practices like using privacy-preserving AI techniques, including federated learning and differential privacy, to minimize risks while maintaining the benefits of AI-driven insights.

Cross-border data transfers

For global businesses, transferring data across borders is essential for seamless operations, but regulatory requirements create significant hurdles. The Schrems II ruling in 2020, which invalidated the Privacy Shield framework between the EU and the US, left companies scrambling to find compliant alternatives. Many organizations turned to Standard Contractual Clauses (SCCs) or Binding Corporate Rules (BCRs) as stopgap solutions. However, these mechanisms require extensive legal documentation, increased oversight, and robust security practices to meet GDPR standards.

Compounding the issue is inconsistent data protection laws across countries. While the GDPR provides a comprehensive framework, other regions, like the US, may rely on a patchwork of state-level laws and sector-specific regulations. These discrepancies can create operational inefficiencies and legal risks for companies managing global data flows. For instance, a cloud-based service provider storing data in multiple jurisdictions must navigate varied and sometimes conflicting rules, increasing compliance costs and complexities, and thus increased risks with both customers and regulators.

Evolving data privacy and protection regulations

Privacy laws are not static; they continue to evolve as governments respond to new technologies, emerging risks, and consumer demands. For example, the California Privacy Rights Act (CPRA) introduced even more strict requirements than its predecessor, the CCPA, including the establishment of the California Privacy Protection Agency (CPPA) to enforce compliance. Businesses must now provide greater transparency around data usage, offer easy to use opt-out mechanisms for data sales, and handle sensitive personal information with enhanced care.

Similarly, laws in other regions, such as Brazil’s LGPD and India’s DPDP, demonstrate a global trend toward stricter privacy protections. Adapting to these evolving regulations requires businesses to stay proactive by monitoring legal developments and implementing scalable solutions like consent management platforms (CMPs) that can adapt to changing requirements.

Future trends

As noted, regulations and technologies are always changing, so companies need to keep evolving as well to protect their customers’ data, their operations and reputations, and to meet legal requirements for their data handling.

Zero trust security models

Zero trust security models are rapidly gaining traction as organizations prioritize identity verification over traditional perimeter-based defenses. Unlike legacy systems that assume trust within a corporate network, zero trust frameworks require all users and devices to be authenticated, authorized, and continuously validated, regardless of location or access point.

For instance, a remote employee accessing sensitive files would need to verify their identity through multi-factor authentication (MFA), while the device they’re using would be monitored for compliance with security policies. This approach reduces risks from insider threats, compromised credentials, and phishing attacks. Businesses adopting zero trust models benefit from enhanced resilience against cyber threats and increased confidence in their security practices.

Consumer awareness

Consumers today are more informed about the value of their data and their data rights than ever before, driven by high-profile privacy scandals and growing regulatory enforcement. This awareness has shifted expectations, with individuals demanding more control over their personal information and greater transparency from organizations they interact with. For example, consumers increasingly expect clear opt-in/opt-out mechanisms for marketing communications, detailed explanations of data usage, and assurances that their information is handled responsibly.

This trend is reshaping marketing and operational strategies. Businesses that embrace Privacy-Led Marketing, such as providing detailed cookie banners or personalized privacy and preference dashboards, are better positioned to build trust and foster loyalty. By meeting consumer expectations, companies can turn privacy into a competitive advantage while meeting legal requirements.

Automation in privacy management

Managing privacy compliance manually is no longer sustainable as the volume of data and complexity of technologies in use and regulations grow. Automation tools are becoming indispensable for streamlining processes like consent tracking, data subject access requests (DSARs), and data mapping. For example, a consent management platform (CMP) can automatically record and store user permissions, providing businesses with a clear audit trail to demonstrate compliance.

Similarly, automated workflows for DSARs enable organizations to respond quickly to user requests for data access, correction, or deletion. These tools not only save time and resources but also reduce the risk of errors or gaps that could lead to regulatory penalties. By investing in privacy management automation, businesses can efficiently manage compliance while focusing on delivering value to their customers.

EU vs. US approaches

The approaches to data privacy and security differ significantly between the European Union (EU) and the United States (US). While the EU emphasizes individual rights and comprehensive frameworks, the US relies on state-level and sector-specific regulations. Understanding these distinctions is essential for navigating global data protection requirements.

EU data privacy and security approach

In the EU, data protection is guided by laws and frameworks like the GDPR and the ePrivacy Directive. These regulations focus on:

• upholding individuals’ rights to control their data
• implementing strict standards for consent, transparency, and data use
• applying consistent rules across all member states, creating a unified framework

This comprehensive approach emphasizes the EU’s prioritization of individual privacy and accountability for all organizations handling personal data.

US data privacy and security approach

The US adopts a more fragmented strategy as it does not yet have a federal data privacy law, leaving regulation up to the states and to specific industries. Examples include:

• Health Insurance Portability and Accountability Act (HIPAA): governs data privacy and protection in the healthcare sector
• Video Privacy Protection Act (VPPA): protects consumers that use online streaming services
• State-level data privacy regulations: protects consumers and their data in specific states, and outlines responsibilities for companies doing business in those states

This approach results in varied requirements depending on the industry and/or jurisdiction, creating unique challenges for businesses operating across multiple states.

Businesses can navigate differing regulatory frameworks by adopting tools like consent management platforms that adapt to regional requirements with tools like geolocation functionality, creating privacy policies and data protection measures aligned with both global and local standards, and addressing the challenges of cross-border data transfers. These flexible practices help organizations meet legal obligations while protecting sensitive information.

Best practices for supporting data privacy and data security

Navigating complex regulatory frameworks is only part of the equation. Businesses must adopt proactive practices to strengthen both privacy and security, and maintain comprehensive data protection. Individuals need to advocate for their rights and make their expectations for data privacy and protection known to businesses and government representatives.

Data privacy and security best practices for businesses

• Conduct regular data audits to identify risks, update operations, and maintain privacy compliance.
• Incorporate privacy by design principles into processes and systems.
• Use secure technologies and tools, such as a consent management platform, to manage data responsibly.

Data privacy and security best practices for individuals

• Advocate for clear and transparent consent options when sharing personal data.
• Protect personal data by following best practices, such as creating strong passwords and monitoring data use.
• Exercise data privacy rights, like those for correction or deletion.

With these approaches, privacy and security can work together seamlessly to safeguard sensitive information in today’s digital environment.

The role of technology in data privacy and security

Adopting best practices for data privacy and security often relies on leveraging the right technologies. As data management becomes more complex, innovative tools and techniques play a critical role in helping organizations protect sensitive information while complying with regulations.

Technologies such as encryption and anonymization provide robust defenses against unauthorized access by protecting data at rest and in transit. Similarly, consent management platforms (CMPs) empower businesses to handle user consent transparently and efficiently, supporting compliance with regulations like the GDPR and CCPA.

Emerging solutions, such as Server-Side Tagging, provide secure ways to manage data tracking while minimizing vulnerabilities. Tools for cookie compliance, including consent banners and cookie policy management, further demonstrate how technology supports privacy by design, aligning with legal requirements and building user trust. By integrating these technologies into their workflows, organizations can establish a comprehensive approach to managing both privacy and security effectively.

The cost of getting it wrong

Neglecting data privacy and security comes with significant consequences that go beyond financial losses. Regulatory fines and other strict penalties, consumer distrust, reputational damage, and loss of growth and partnership opportunities can cripple organizations, often with lasting effects.

Regulators have fined a variety of tech companies, including app providers, like when France’s CNIL fined Apple and video game developer and distributor Voodoo over app consent violations.

Other landmark GDPR fines have been in the hundreds of millions, even topping a billion Euros in the case of Meta, which has been fined multiple times for violations of the regulations requirements.

Though the largest fines, on companies like Meta and Google, are the ones that grab headlines, many smaller organizations have been fined as well. Regulators are not giving a pass to organizations that collect and use personal data, even if they are small businesses and not influential platforms. Which is necessary, as breaches continue to be exposed.

In early 2024, National Public Data, an online background check and fraud prevention service, experienced a significant data breach. This breach allegedly exposed up to 2.9 billion records containing highly sensitive personal data of up to 170 million people in the US, UK, and Canada.

Failing to address data privacy and security comes at a steep price, as seen in high profile breaches and regulatory penalties that erode trust and financial stability. These incidents underscore the critical need for businesses to prioritize both privacy and security as interconnected pillars of comprehensive data protection.

Building trust with customers

As businesses increasingly rely on data to personalize customer experiences and drive decision-making, data privacy and security have become indispensable for demonstrating dedication and fostering trust. For marketers, this shift is an opportunity to align ethical data practices with customer expectations, creating meaningful and lasting relationships.

Why privacy matters to marketers

Today’s consumers are more informed about their data rights and increasingly expect transparency from brands. Research shows that mishandling personal data is a key reason customers disengage from companies. This makes privacy and security essential components of modern marketing strategies, beyond compliance requirements.

For marketers, adopting strong privacy and security practices offers distinct advantages.

• Building trust: transparent data practices enhance credibility and strengthen brand loyalty
• Driving engagement: customers are more willing to share information with brands they trust, enabling even better and more personalized customer experiences
• Standing out: ethical and transparent data practices differentiate brands in competitive markets

The growth of Privacy-Led Marketing

Marketers are increasingly adopting Privacy-Led Marketing, strategies that emphasize transparency, consent, and ethical data use to build highly engaged and long-term customer relationships. This approach not only supports regulatory compliance but also builds customer confidence in how their data is handled.

Key components of Privacy-Led Marketing include:

• Consent-driven personalization: Using a CMP to collect, secure, and manage consent, preference, and permissions data.
• Clear messaging: Providing users with plain language explanations of how their data is collected and used.
• Data minimization: Limiting data collection to only what’s necessary for specific campaigns to reduce risks.

How Usercentrics supports Privacy-Led Marketing

Usercentrics empowers businesses to align marketing efforts with ethical data practices. Our powerful CMP:

• simplifies consent collection and supports compliance with the GDPR, CCPA, TCF, Google Consent Mode, and other global regulations and frameworks
• easily integrates into marketing workflows and existing tech stacks, enabling data-driven personalization without compromising user trust
• provides detailed reporting to document compliance efforts, delivering transparency to internal and external stakeholders

By integrating tools like Cookiebot CMP or Usercentrics Web CMP into their workflows, marketers can respect consumer data preferences and legal requirements while achieving their goals, creating a balance between personalization and privacy.

A sustainable future for growth built on trust

As privacy regulations grow stricter and consumers demand greater transparency, marketers must evolve. Embedding data privacy and security into marketing strategies is no longer optional, it’s vital for creating authentic connections with customers. It also helps that marketers now have access to the highest quality consented data right from their customers, which is invaluable for high performance campaigns. With privacy-first practices and innovative solutions like those from Usercentrics, businesses can thrive in a data-driven future built on trust.