CIPT (Certified Information Privacy Technologist) Practice

Which of the following is a potential risk of inadequate data security?

1. Enhanced customer loyalty

2. Data breaches, loss of personal information, legal penalties, and reputational damage

3. Increased data accuracy

4. Efficient data management

The correct answer is: Data breaches, loss of personal information, legal penalties, and reputational damage

The selection identifying potential risks of inadequate data security is accurate. Inadequate data security can lead to severe repercussions, including data breaches where unauthorized individuals gain access to sensitive information. This loss of personal information not only jeopardizes individuals' privacy but also can result in significant legal penalties against organizations that fail to protect data adequately. Furthermore, incidents of data breaches can severely damage an organization's reputation, eroding customer trust and potentially leading to financial losses from both public relations efforts to recover that trust and from litigation that may arise as a consequence. In contrast, the other choices represent outcomes that are not associated with the risks of poor data security. Enhanced customer loyalty and increased data accuracy typically stem from robust privacy measures and effective data management practices rather than risks associated with inadequate security. Efficient data management also relies on security measures to protect the integrity of data and maintain stakeholders' trust. Therefore, focusing on the consequences of inadequate security illustrates the importance of having strong data protection practices in place.