The Battle for ATTENTION: Will AI Save The Advertising Industry in a Privacy-Driven Economy?

5 Hidden Costs of Data Non-Compliance

By SCUBA Insights

When it comes to data security and privacy regulations, non-compliance is not cheap. Your brand is most likely well aware of recent, record-breaking fines levied by GDPR regulators and other governing bodies. But what about the hidden costs of non-compliance? Although they may not elicit the same initial sticker shock as fines, these hidden costs can be just as damaging to your brand’s bottom line.


Read on to learn about the hidden costs of data non-compliance and how to avoid them.


Challenges of a privacy-first world

Whether it's governments passing stringent data security laws or tech titans such as Google phasing out third-party cookie collection, it’s become increasingly clear that we now live in a privacy-first world. Some of the common challenges brands may face as they adjust to this new normal include:


  • Poor data literacy: Brands that empower all employees to identify potential compliance violations through data democratization efforts have an edge over their competitors. Yet, poor data literacy is still a major issue for 81% of organizations.


  • Antiquated data management systems: Brands that rely on legacy technologies may not realize they are storing or exporting data illegally, such as EU or other location-restricted individual data, until it's too late.


  • Limited bandwidth: Not every brand is equipped with the most robust security and IT teams to fully execute and ensure data compliance. Even for those that are, staying on top of constantly changing legal definitions can be a serious time and financial drain.

Brands will lose more than just money & ROI

Data compliance is no simple task. Rather than engage in lengthy data democratization efforts or phase out problematic technologies, some brands may be tempted to ignore this privacy-first culture shift, continue to do business as usual, and eat the fine. However, brands must consider the less obvious, hidden costs of non-compliance:


1. Lawsuits and legal fees: In 2012, 21 consumers filed a class-action lawsuit against Facebook for allegedly tracking user activity after leaving the site and selling this data to advertisers. This lawsuit would drag out for another decade, until Facebook (now Meta) finally settled in February 2022 for $90 million. Few companies can afford to settle such expensive class-action suits, let alone litigate for over a decade.

2. Data breaches: Data security compliance doesn’t just protect consumers, but brands as well. When brands fail to meet compliance regulations, they make themselves more vulnerable to risks and threats, which can lead to data breaches. A recent IBM study found data breaches cost brands with compliance failures $2.3 million more per incident than data security-compliant brands.

3. Business disruptions and downtime: Whether a brand ceases operations for a compliance violation or is forced to go offline due to a data breach, the resulting downtime can be seriously expensive. A single hour of downtime can cost mid-size companies an average of $100,000 an hour–and some of the largest companies reported losses of $5 million every hour.

4. Damaged reputation: As Warren Buffet once said, “It takes twenty years to build a reputation and five minutes to ruin it.” A data compliance scandal could tarnish a brand's image for years to come, making everything from hiring, to employee retention, and marketing outreach much more difficult.

5. Lost customer and stakeholder trust: Once customer trust is lost, it can be extraordinarily difficult to regain their confidence. According to Adobe, 71% of respondents would stop buying a product if the company betrayed their trust. Losing stakeholder trust can be even more devastating–a Deloitte study found that companies can lose 26% to 52% of their market value after losing stakeholder trust.

Protect your data & customer trust with Scuba

From risking data breaches to a tarnished brand reputation, brands must ensure their data and processes are both secure and compliant. Investing in customer intelligence platforms, like Scuba Analytics, can help brands mitigate non-compliance fines and hidden costs. Boasting robust security and strict compliance adherence, Scuba’s customer intelligence platform provides a real-time analytics solution for brands wishing to stay data privacy and security compliant.


  • Privacy-by-design: Data privacy is our priority. Scuba operates entirely behind a customer's cloud, giving you complete control of your data.


  • Top-tier compliance: In addition to supporting GDPR compliance, Scuba is SOC 2 Type 2 certified, IS0 27001 certified, IS0 27018 certified, and Privacy Shield certified.


  • Best-in-class infrastructure design and maintenance: In addition to our on-call SRE team, Scuba offers rapid software and regular infrastructure updates for a more secure, scalable, and reliable environment for your data.


  • Integrate third-party or event data: Scuba integrates disparate third-party and event data, making it easier for brands to differentiate and isolate security flaws from integration flaws.


  • Reduce the need for custom ETL workflows: Scuba automates the data management process, liberating brands to better monitor their data security.

Want to learn more about how Scuba can help your brand avoid the hidden costs of data non-compliance? Request a demo today or talk to a Scuba expert.

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