Market Problems Aside, Companies Are Planning Privacy Spending Spree
A new report from FTI Consulting shows that organizations plan on sinking more money into privacy in an effort to satisfy a growing number of privacy regulations and avoid the public backlash associated with a data breach.
May 19, 2020 at 11:30 AM
3 minute read
In-house privacy budgets may be seeing a dramatic increase as organizations look to safeguard against the regulatory and public scrutiny associated with data breaches. On Tuesday, FTI Consulting released a new report, titled "Future Proofing Corporate Data Privacy," which indicated that many respondents were prognosticating a serious hike in privacy-related spending potentially directed toward underfunded initiatives such as employee training.
The FTI survey is comprised of responses from 500 leaders working inside large, U.S.-based companies, 97% of whom indicated they would be increasing their spend on data privacy over the next 12 months, with an average increase of 50%. Additionally, one-third of respondents indicated that they would be increasing data privacy budgets by a factor of between 90% and 100%.
While privacy regulations such as the General Data Protection Regulation and California Consumer Privacy Act are certainly upping the ante, there are other, less formal incentives in the mix as well. Chris Zohlen, a managing director at FTI Technology, referenced pressures stemming from the general public as another point of concern for organizations.
"Many of these companies obviously don't want their name in the paper in a negative view or connotation. … The email [to consumers] that says 'we may have had a breach of your information,' no one wants to be that company," Zohlen said.
But while companies may have a common objective in mind, exactly how the money being funneled into those privacy budgets will be spent likely varies from organization to organization. On the tech side of the spectrum, for example, Zohlen indicated that solutions designed to help departments organize and respond to data subject access requests are popular. However, some organizations may not average enough of those requests to make such an investment worthwhile.
Zohlen also flagged data management tools that can help companies scan, track and locate personal data within its systems. "A lot of the work done thus far has been sort of surveys and interviews and questionnaires and asking people in the organization how the information flows," Zohlen said.
Aside from tech, talent and staffing may be another common outlet for privacy-related spending. According to the survey, 57% said they had appointed in-house staff designated for privacy compliance and incident response. Still, COVID-19′s impact on the economy could potentially freeze any ongoing hiring efforts in their tracks.
"We've got quite a few clients that have opened job requisitions for privacy individuals that have essentially been frozen," Zohlen said.
But he does expect companies to begin filling those positions again once the economy begins to improve. Human resources in general may be an area ripe for privacy-related investments. So far, the money sent in that direction has been relatively sparse, with the survey claiming that only 17% of privacy-related spending is earmarked for training. Furthermore, 78% of respondents either strongly or slightly agreed that their organization needed to do more to communicate its data privacy compliance protocols.
"It's probably one of the biggest sort of areas for improvement because so many breaches and exfiltrations of data, while not totally privacy related, are from insiders accidentally," Zohlen said.
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