For small organizations (and even big ones for that matter), keeping up with the latest data protection regulations is a tremendous challenge. More than 79 percent of businesses surveyed report that they are having trouble meeting the new requirements in a timely manner, required by law.
In light of this, many firms find themselves in a state of panic. New regulations, such as GDPR, HIPAA/HITECH, and DFARS, are already in effect. But many companies still aren’t following them and are at risk of fines, lawsuits, damaged reputations, and loss of competitive advantage.
In this post, we discuss first why regulatory compliance is so important and then what your business can do individually to meet the required standards.
What is the importance of compliance?
Unfortunately, the majority of firms simply aren’t prepared for this deluge. While a large majority are aware of the changes coming down the pike, only a small percentage have in-depth knowledge of practical changes they need to make on the ground. And even fewer are actually carrying them out.
Data compliance is exceptionally important for companies in both the US and around the world. According to IBM, the average cost of a data breach worldwide is 3.86 million USD per event. In the US itself, the figure is closer to 8.14 million USD.
The cost of breaches emerges from a variety of sources. One issue is the loss of reputation. If customers lose trust in your ability to keep data secure, it takes its toll on your brand. You could find your business shrinking at the expense of your rivals.
Another issue is the fines and penalties that government departments are doling out. In HIPAA breaches, for instance, the fine you receive is proportional to the number of data records you lose. So the higher it goes, the bigger the fine you pay.
Then there are the competitive costs. When hackers steal your data and hold it to ransom, you lose the ability to leverage it to out-compete your rivals.
From this discussion, it is clear that the costs of failing to keep pace with data standards are tremendous. So organizations need to do everything in their power to make sure that they stay up to date. Ideally, they should be in a position where they are going beyond obeying the letter of the law and following it in spirit as well.
Ticking off all your obligations is one approach. But that won’t serve your business in the long run. The only way forward is to jump right in and immerse yourself in the world of compliance today. That way, you’re much more likely to benefit your business and stay on the right side of the law.
What can you do to stay current on compliance standards?
So how do you actually go about remaining current on compliance standards? What processes can you implement in your organization?
As with any major project, the process of staying up to date with compliance standards begins with research. You need to know and understand what’s coming down the pike, your obligations, and how to practically meet them.
Figuring this out yourself, of course, isn’t easy. But, fortunately, there are plenty of resources available that can help.
Many enterprises subscribe to blogs that stay abreast of digital security issues. Here’s a rundown of some of the most popular you might want to consider:
- TechTarget: SearchCIO. This blog focuses mainly on the issues that CIOs face in organizations surrounding privacy and data theft prevention.
- Global Privacy & Security Compliance Law Blog. This blog focuses on the progress of various data protection laws through legislatures across countries. It covers new requirements and how they might affect your business.
- GDPR: Report: This blog focuses on the latest news about data protection with a small and medium-sized business focus. It is a division of the Data Protection World Forum.
- Ico. The blog of an official data protection body that provides industry-by-industry information on changes to compliance laws.
- Privacy Matters: A news publication that covers in-depth data protection regulation topics.
You can also get the basics of data compliance from the government institutions setting the laws in the first place.
Enroll In Compliance Training And Seminars
Reading about compliance rules and how to follow them, however, will only get you so far. You also need a practical “working” knowledge of how these laws operate, and what you can do to obey them.
Achieving this requires enrolling multiple stakeholders in your organization in training and seminars.
Data protection education covers a vast range of topics designed to help you smash threats and keep your data more secure. For instance, training teaches you how to practically implement data protection regulations in your business, including those passed outside of your jurisdiction.
It also gives you the tools to thwart various scams that might lead to a costly data breach. You’ll cover things like password management, how to operate activities securely online, phishing risks, PCI-DSS training, and public WiFi usage policies for BYOD devices.
More importantly, you’ll also learn basic privacy principles – things you should know, regardless of what the law says. Learning about privacy at a fundamental level allows you to become more flexible and adaptable. It lets you see threats you wouldn’t see if your education was superficial.
Appoint A Compliance Officer Or Hire A Compliance Expert
A data protection officer is someone who is responsible for overseeing an enterprise’s data protection strategy and implementation. They make sure that the organization complies with its data protection requirements. You can either bring the data protection officer function in-house or farm it out to a specialist third party.
Compliance officers have the following general responsibilities:
- Ensuring that your enterprise honors customer requests to erase or see copies of data you hold on them
- Conducting regular audits to ensure that your organization is following compliance standards according to the law
- Training people in your organization to ensure that they remain compliant at all times
- Maintaining records of compliance efforts for future audits
- Responding to requests concerning how you’re using individuals’ personal data
- Being a point of contact between your firm and the regulatory authority overseeing compliance
Data protection officers face substantial challenges as they conduct their work. The most significant hurdle is figuring out how to put best practices in place in their organizations. Enterprises are like large ships: turning them around and sailing in a new direction is an immense challenge.
They’re also starved for resources. Around 23 percent of data compliance officers say that they do not have what they need to ensure compliance around the clock. A further 13 percent say that they do not have the support of management.
Keeping up, therefore, requires commitment from the organization at all levels. Management has to get behind the idea fully if compliance is going to happen on a large scale.
Nothing in business happens without a budget. But, unfortunately, too few enterprises are allocating the resources necessary to allow compliance to happen properly. As a group, they are vastly underestimating the material resources required to ensure that they are abiding by the law.
A PwC study, for instance, found that 88 percent of organizations spent more than $1 million to get ready for GDPR. And around 40 percent said that they spent more than $10 million in anticipation of the new rules.
When planning a compliance budget, you need to segment it into three components:
The IT budget is usually the biggest slice of the pie because it involved retooling applications for opt-in consent.
Budgeting for legal expenses is important too. Corporate policies, for instance, need to realign in light of data legislation.
Lastly, cybersecurity needs to become part of the equation. Companies need to improve their incident response, data protection, and data government. They also need to find out precisely what data they actually own, and where it is located.
If new data protection laws make anything clear, it’s that companies require “continuous oversight” of their systems and networks. Compliance isn’t a one-off event. It’s an ongoing process that involves careful monitoring of your systems and structural changes to your enterprise.
Just like marketing and finance, data compliance isn’t something you can “tack on” to your operations and hope it will stick. It needs to grow organically within your business as your other departments do. If it doesn’t come from within, your organization will eventually fall foul of costly breaches, fines, brand damage, and a shrinking customer base.