Data security protects digital information from unauthorized access, use, disclosure, or destruction. You probably have a better grasp of baseline data security practices than you realize.
Would you be willing to put your sensitive data— bank account information—in a form on an unsecured web page without that little lock symbol in the browser bar? For a real-world example, would you let a stranger watch you enter your pin code into an ATM? Or do you leave your front door unlocked on a busy street with valuables inside your home?
If your answers to these questions are a reasonable, “absolutely not,” then you already understand how crucial data security practices are for every startup.
Leaving your business open to risk is unnecessary when data security practices are so accessible today and nowhere near as bewildering as they once were. This guide will equip you with solutions to protect your startup from data security risks; no prior experience or expertise is required.
9 Best Data Security Practices Startups Need to Incorporate Now
Whether you run an e-commerce site, SaaS, or sell handmade goods on social media—you need to establish a security baseline for your business. As a startup, you create a treasure trove for hackers to target every time you collect and process customer information. If you strategically minimize risks, you can confidently protect your data.
All right, so what is a security baseline? A security baseline is a set of standards used to establish protocols, or a system of rules, to protect a system from cyberattacks. These guidelines effectively insulate your data on applications and devices from unauthorized access, loss, or destruction.
Strong security practices—like secure socket layer certificates (SSLs)—bolster customer trust in your business and allow you to sleep soundly at night. In our eyes, that’s a win-win.
Everyone can benefit from these safeguards whether you have 1,000+ employees or operate a sole proprietorship. Use the following data security practices to clarify your startup’s security needs.
1. Establishing MFA controls
Multi-factor authentication is a process of confirming the user’s identity by requiring two or more different forms of identification. This security feature protects your account from unauthorized access.
Instead of a straightforward password standing between your data and potential threats, MFA adds additional hurdles, making your data more unattractive for rogue operators to access. These hurdles typically fall into three domains: something you know, have, or are. A password/PIN, authentication app/USB token/security badge, and fingerprint/biometric are respective examples. As a result, MFA is more secure than passwords alone and an easy data security practice to set up.
2. Principle of Least Privilege
The Principle of Least Privilege means that not every user in your startup needs access to every server, application, or program. Instead, access to data is on a “need-to-know basis.” This security rule means that users should only have access to the specific data and programs they need to do their jobs.
Preventing unauthorized access to sensitive data helps reduce the risk of malware infections by limiting the number of programs and files available for hackers to exploit in the first place.
3. Basic Social Engineering
Closely related to the previous practice, social engineering is another common weak point in startups. Criminals “phish” or “spoof” (take advantage of) someone to gain access to a system, stealing data or money in the process. Verizon’s 2022 Data Breach Investigations Report (DBIR) reported that phishing is responsible for 36 percent of all data breaches, making it a top security concern.
The way to prevent scammers from accessing your data is through education during onboarding. Learn best practices and what to look out for, and teach people at every level in your business to recognize and avoid phishing attacks. The slogan “if you see something, say something” works well for this. If an email, text, phone call, link, or social media message looks off—it probably is and should be reported.
4. Reducing Attack Footprint
Monitoring your network traffic is one of the most important things you can do to ensure your network is secure. One way to reduce your cyberattack footprint is to block all traffic except the country you do business within.
You should monitor your network traffic regularly and flag suspicious connections or packets being sent. You can use tools to monitor your network traffic, such as Wireshark or NetWorx.
Be sure to regularly review the users, third-party vendors, and programs that access your network, culling any connections that are no longer relevant. Performing quarterly access reviews can help you keep a tidy shop. The more robust your security protocols are, the less of an easy target your startup will be.
5. Anti-malware and Antivirus Programs
Use anti-malware and antivirus solutions that come built-in on your Mac or PC. Set up regular software update schedules or allow for automatic updates during off hours. It is also vital to keep your software, hardware, and devices up to date. Putting off updates can leave your data vulnerable to attack, so try not to minimize that update window—again—without updating.
Regularly updating your devices can help you avoid malware, spyware, and viruses and improve their performance. Keep your web browser of choice, like Google Chrome, updated for the same reasons.
6. Mobile Device Protections and Considerations
Should certain aspects of your business be accessible from employee phones? When are downloads of specific files allowed? What about access to the front-end development of your website? These questions are essential to ask when creating data security baselines for startups.
The results will be different for each business. For example, allowing employees to access a work customer relationship management (CRM) tool from their phone but restricting logins to sensitive data servers may make sense for one startup but not another.
7. Cloud-based Backups and Managed Cloud Storage
Cloud-based online storage is an affordable, secure way to prevent data loss in case of accidents, attacks, or natural disasters. Allowing a cloud storage provider to back up and manage your databases can help safeguard them. Learn how to use it responsibly and effectively to protect your data in the event of natural disasters or malware attacks.
8. Password Complexity and Refresh Cadence
In the past, the industry recommendation for changing passwords was quarterly or every 90 days. But the National Institute of Standards and Technology (NIST) issued Digital Identity Guidelines in 2017 that firmly disagreed with this idea.
The content of this report escaped the radar of many tech professionals for years. Still, the NIST stated that there’s no need for passwords to “be changed arbitrarily (e.g., periodically)” unless there is a reason to do so, like a data breach or user request. The previous standard resulted in employees writing their continually changing passwords in insecure places, such as on a sticky note or in a note-taking app on their phone, posing an even more considerable security risk.
Create unique passwords with 12 to 15 random, nonsequential characters and encourage using secure password managers. Password managers minimize data leaks and streamline this data security protocol altogether. Here is a helpful tool that estimates the time it would take to crack your password of choice.
9. Leverage Vendors for SOC2 Compliance
Service Organization Control 2, or Soc2, is a set of criteria for managing customer data developed by the American Institute of CPAs (AICPA). SOC2 involves adhering to five Trust Services Criteria (TSC) when handling customer information:
- Security – Using robust data security practices, you must protect customer data against unauthorized access.
- Availability – The customer must be able to access your system, product, or service as outlined by a service level agreement (SLA.)
- Processing Integrity – You must monitor the data processing and maintain quality assurance procedures to ensure the processing integrity of customer data.
- Confidentiality – Confidential data intended only for the customer or startup must be restricted to those parties and processed or stored using encryption, firewalls, and access controls.
- Privacy – The way you collect, use, retain, disclose and dispose of customer data must align with your privacy policy notices and generally accepted privacy principles (GAPP).
The SOC-2 compliance process can be expensive and frequently out of reach for small business owners. If it sounds like a lot to manage, it certainly is.
You can use SOC2-compliant vendors such as DocuSign and Stripe to leverage the controls of a much larger and more mature organization. Remember that Soc2 is required more or less if your app or service is cloud-based. Cloud-based applications must be SOC-2 compliant to be market viable. Customers today won’t accept anything less.
The Secret Ingredient: Data Security Builds Customer Loyalty
Infusing baseline security practices into the fabric of your startup is achievable and does not require expert-level experience, technical knowledge, or a huge budget to achieve. Furthermore, prioritizing strong security practices can cultivate strong customer trust in your brand as a by-product of that focus.
At Lumos, we can help you grow and diversify your small business loan portfolio with the help of innovative data analytics and advisory services. Our cloud-based, customizable platform uses 3.5 billion small business and macroeconomic data points to unearth rich insights from your untapped reservoirs of data, enriched with curated external sources.
We’re strategic, collaborative industry leaders ready to help you build the best practices of model risk management architecture and data governance. If this sounds exciting, schedule a demo with us to discover how we can elevate your risk analysis and help you make strategic decisions for your startup.