When you want to protect data from being known or accessed by other parties, you resort to encryption.
In computer terms, encryption is done by converting data into a secret code which only those who are authorized to receive can understand.
You see, while your data is on its way to, say, your bank's website, the info can be intercepted by hackers. If it's not encrypted and contains your bank account number, password, and fund transfer details, imagine what cybercriminals can do with it.
When the said data is encrypted, however, hackers will not be able—or at least find it much harder—to decipher what is being sent and where it's coming from.