What is Data De-Identification, and Why do I Need it?

Data de-identification allows companies to use, share, and sell high-quality data freely. Let’s break down all the benefits: 

• Adherence to data privacy laws: Data privacy regulations mandate the rules for collecting, storing, sharing, and managing PII. Data de-identification and anonymization are necessary to comply with strict data privacy regulations. These regulations, such as GDPR in the EU and CCPA in California, impose severe penalties for non-compliance. By ensuring your data is de-identified, you can avoid hefty fines and maintain your operations without legal interruptions. Moreover, regulatory compliance is not just about avoiding penalties but also about fostering a culture of respect for user privacy, which can enhance your company’s reputation.
• Reduced costs of compliance: With automated de-identification software, you can apply standardized techniques consistently across your datasets. This further reduces the costs of privacy compliance and risks of financial penalties for regulatory violations. Automated solutions minimize the need for extensive manual oversight and labor, thereby cutting down operational costs. Standardized techniques also ensure that your compliance measures are uniformly applied, reducing the risk of human error, which can lead to costly breaches and compliance failures. Investing in automated de-identification tools can thus provide significant long-term savings.
• Lowered impact of data breaches: The cost of an average data breach has risen from $3.62 million in 2017 to $4.45 million in 2023 (according to an IBM report). By de-identifying your datasets, you will greatly reduce the potential harm if attackers gain access to your databases. De-identified data is less valuable to cybercriminals because it lacks the personal identifiers that are often the target of attacks. Even if a breach occurs, the impact is minimized, as the compromised data does not reveal personal information. This reduction in potential harm also translates into lower legal and remediation costs following a breach, further protecting your company’s financial health.
• Extra protection of PII: You can prevent unauthorized access to and malicious misuse of data by using only de-identified datasets. It’s important to note that the risk is from malicious agents and those who handle data daily — such as software developers, testers, data analysts, and service providers — who can unintentionally compromise data. By de-identifying data, you mitigate the risks associated with insider threats and accidental data exposure. This practice not only safeguards sensitive information from external attacks but also from internal mishandling. It creates a safer data environment, ensuring that PII is protected at all stages of data handling and processing.
• Improved operational efficiency: By reducing the need for extensive protection measures, you facilitate access to the data for your employees. A reliable process actually speeds up product development cycles, research, and business operations. With fewer restrictions on data usage, employees can access and utilize data more freely and efficiently, leading to faster innovation and quicker decision-making processes. This increased accessibility can significantly enhance productivity and enable more agile and responsive business operations, ultimately providing a competitive edge in the market.
• Elevated customer trust: Customers are more likely to use your services and share their personal information if your reputation isn’t tarnished by data leaks, civil lawsuits, and compliance fines. Building and maintaining customer trust is crucial for long-term success. When customers know that their data is handled responsibly and securely, they are more inclined to engage with your services and products. This trust can lead to increased customer loyalty, higher retention rates, and a better overall brand image. 
• Enhanced sharing and collaboration: De-identification allows you to safely share data with your employees, business partners, and other third parties without breaking privacy regulations. This capability is particularly valuable for collaborative projects, partnerships, and research initiatives that require data sharing. De-identified data can be shared across different departments and organizations with reduced chances of compromising privacy, enabling more effective and cooperative efforts. It also enhances compliance with data-sharing agreements and the overall quality of collaborative outputs.
• Additional revenue streams: You can use de-identification tools to build a data marketplace for monetization purposes. Many businesses will pay for high-quality data for testing, AI algorithm training, or research. For example, thanks to our platform, Erasmus Medical Center sells synthetic data to healthcare and medical research companies. Creating a data marketplace not only opens new revenue opportunities but also maximizes the value of your data assets. By providing de-identified datasets, you can cater to various industries’ needs for data-driven insights. This diversification of revenue streams can significantly boost your company’s financial performance and resilience.

Because privacy requirements differ in certain jurisdictions and sectors, de-identification tools have to meet several regulations. Advanced de-identification solutions are designed to accommodate varying legal standards and offer customizable options to ensure compliance across different regions.