Chatbots and Data Protection: How Businesses Should Manage Digital Risks

Nino Qurasbediani, Certified Data Protection Officer of the German Academy of Civil Servants (dbb akademie) Professional Member of the International Association of Privacy Professionals (IAPP), shares her insights into the challenges and strategies businesses must adopt to ensure the secure use of chatbots. With the growing adoption of chatbots for streamlining customer interactions, the risks associated with data protection have become a pressing concern. In this interview, Nino discusses the potential vulnerabilities and offers actionable strategies for businesses to mitigate these risks effectively.

Today, we see more companies using chatbots to improve service and simplify communication with customers. However, how protected is personal data when working with chatbots? What are the risks, and how can they be managed?

Technological progress and data protection risks often develop in parallel. Chatbots undoubtedly improve business processes, but their use requires a thoughtful approach to data protection. While chatbots simplify processes, managing them demands special attention, as they serve as channels that may inadvertently expose sensitive user data if not properly secured.

What type of personal data sharing can be considered the riskiest when working with chatbots?

The greatest risks arise when chatbots handle sensitive information, such as financial, medical, contact, or identifying data. These risks are compounded when chatbots store and analyze data for extended periods. Unsecured systems are particularly vulnerable to attacks, especially those lacking safeguards like two-factor authentication. For instance:

1. Unsecured financial transactions: Users may share financial details over unsecured channels, increasing the risk of data breaches.
2. Collection of biometric data: Chatbots using voice recognition technology process sensitive biometric data. If not adequately protected, this data can be misused, such as for identity theft.
3. Inappropriate profiling: Chatbots may profile users based on behavior, potentially leading to inaccurate recommendations or decisions.

You’ve mentioned in previous interviews that a strategic approach to data protection is essential. What specific strategies would you recommend to businesses using chatbots? How should these risks be managed?

When advising businesses, I emphasize an integrated approach combining technical, legal, and corporate culture measures. Key strategies include:

1. Data minimization: Collect only the information necessary for business processes. For example, a transport company should not request a user’s criminal record or legal address to book a service.
2. Compliance with legislation: Document data processing policies and make them accessible to users. For instance, implementing a chatbot consent functionality that requests user approval before collecting data can enhance transparency.
3. Data encryption: Encrypt and anonymize data to minimize risks in case of breaches.
4. Access control: Implement Role-Based Access Control (RBAC) to limit system access to authorized personnel.
5. Security technologies: Use two-factor authentication and regularly test security systems for vulnerabilities.
6. User education: Inform users about safe chatbot practices, such as avoiding sharing sensitive data and recognizing phishing attempts.
7. Information security standards: Adopt internationally recognized standards like ISO 27001 to demonstrate commitment to data security.
8. Data retention policies: Define retention periods and automate data deletion after inactivity.
9. Incident management plans: Prepare a documented procedure to handle data breaches effectively.

What do you think is the main mistake businesses make when using chatbots?

The most common mistake is underestimating data protection during the technology implementation process. Companies often focus on chatbot functionality but overlook their responsibility to safeguard user data. Violations of data minimization principles, insufficient security measures, algorithm bias, lack of a monitoring framework, and inadequate user education are all prevalent issues.

If a business owner is reading this interview, what is one important piece of advice you would like them to take into account?

My primary advice is: “Data protection should be an integral part of your business strategy.” Chatbots should not only simplify processes but also serve as secure, transparent communication channels. Prioritize user trust and data security above all else. By addressing the risks associated with personal data processing, businesses can protect their reputation and maintain user confidence in today’s digital landscape.

Trust is a business’s most valuable asset. Prioritizing robust data protection measures ensures not only compliance but also fosters customer loyalty and strengthens brand reputation.