Data compliance is a process that identifies the applicable governance for data protection, security, storage and other activities and establishes policies, procedures and protocols ensuring data is fully protected from unauthorized access and use, malware and other cybersecurity threats.
Data is typically generated, managed, stored, secured, accessed, used, modified and destroyed. Standards and regulations define how to ensure that data is securely managed in all phases of its existence. Compliance with the many different standards, regulations, frameworks, legislation and practices is critical, and governance is essential.
Why is data compliance important?
Public and private sector organizations have a fiduciary responsibility to protect the information they use to manage their businesses. Availability of relevant standards, regulations, and other governance rules and practices that deal with the security, privacy and protection of data ensures that data can be securely managed and protected.
These activities are important in the IT security audit process, which devotes a lot of time examining all aspects of how data is managed. Failure to demonstrate compliance with the relevant data governance procedures can result in unsatisfactory audit findings that have to be corrected.
Benefits of data compliance
Compliance with data standards, regulations, and other governance rules and practices helps ensure that the confidentiality, integrity and availability of an organization’s data, databases and other relevant information are protected. Unauthorized access to mission-critical data could result in damage to the organization’s reputation, loss of revenue and loss of business. However, compliance can be achieved with the help of dozens of available resources, like security technologies, antivirus software and anti-ransomware software to protect all forms of data.
Some examples of data compliance:
- Implementing policies for data storage and maintenance
- Creating data access controls
- Training employees on data privacy and security
- Establishing procedures for data sharing and transfer
- Setting up systems for data archival and disposal
- Utilizing encryption to protect data
- Establishing security reviews and audits
How Data Security Compliance Differs From Data Compliance
While similar, data security compliance and data compliance have different focuses and objectives. Data security compliance, for example, primarily deals with how data is protected from breaches, loss, and unauthorized access. Data security compliance addresses the measures and standards that an organization implements to ensure that its data is safe and secure.
Data security compliance, once again, typically involves encrypting data, controlling user access, and establishing reliable backup systems. Data security compliance is critical for avoiding potential cyber threats and demonstrating compliance with data protection laws. Data compliance, by contrast, refers to the adherence to laws and regulations that govern the collection, storage, processing, and management of data. These rules not only cover data security but also data privacy, data sovereignty, data transparency, and more. For instance, the General Data Protection Regulation (GDPR) in the EU regulates how organizations must handle personal data of individuals, including provisions on obtaining explicit consent for data collection, providing clear information on how data is used, and giving individuals the right to access or delete their data.
So, while data security compliance focuses on the technical and operational aspects of protecting data from unauthorized access and breaches, data compliance has a broader scope and covers the all-encompassing legal, ethical, and regulatory aspects of managing and handling data. Essentially, data security compliance can be seen as part of the larger umbrella of data compliance. Both are equally important and interconnected in maintaining an organization’s overall data governance strategy.
Data Security Compliance: a Priority for Modern Businesses
Data security compliance touches every aspect of a business, from legal to reputational to operational. Hence, it is a mission-critical business obligation that can significantly impact a company’s success and longevity. Here are just a few examples of just how critical data security compliance is for organizations:
- Legal Compliance: The first and most apparent reason is legal compliance. Businesses need to adhere to various laws and regulations that mandate data protection. Non-compliance can result in heavy fines, lawsuits, and legal penalties.
- Protecting Reputation: Data breaches can cause irreparable damage to a company’s reputation. A single incident can erode customer trust, which might lead to loss of customers and revenue. In this age of information, news of data breaches spreads quickly, and rebuilding lost trust can be difficult and costly.
- Protection against Cyber Threats: With the rise in cybercrimes, ensuring data security has become a necessity. Through data security compliance, businesses can protect sensitive data from unauthorized access, theft, and breaches, thereby reducing the risk of cyber-attacks.
- Economic Considerations: Data breaches can be costly. Apart from potential fines, businesses might have to bear the costs of rectifying the breach, compensating affected customers, and even potential lawsuits. By adhering to data security compliance, businesses can avoid these hefty costs.
- Maintaining a Competitive Edge: Businesses that can demonstrate robust data security compliance tend to be more trusted by customers and partners alike, giving them a competitive edge in the market.
- Business Continuity: Data security breaches can interrupt business operations leading to business loss. Compliance with data security standards ensures smooth business operations.
- Regulatory Requirements: Depending on the industry, data security compliance might be a prerequisite for obtaining certain certifications, accreditations, or contracts, especially when dealing with government bodies or large corporations.
How Data Compliance Impacts Businesses
Once again, data compliance encompasses much more than data security compliance. Data compliance impacts how you store, transmit, and use information as part of your business operations. Think of data compliance as the intersection of consumer/patient/client data privacy and information rights against the proper business use of information that may fall under those data privacy rights.
To determine your organization’s obligations in regards to “data compliance,” you need to answer a few key questions:
- How are you protecting your data: unauthorized use or disclosure?
- How must that data be protected: through technical, administrative, or physical measures?
- How is the data used? for business or customer/client/patient services?
Security is an important component of a compliance regimen. Further, many governmental and industry standards and regulations have data privacy and protection as their focale point (e.g. GDPR, PCI DSS, etc.). Organizations must be able to demonstrate cyber risk management governance and compliance to auditors, boards of directors, executive staff, regulatory and compliance bodies, among others.
Data compliance is critical to businesses for various reasons:
- Data Compliance for Individual Rights: As covered later in the post, management of information for business purposes intersects with the rights of individuals to manage, control, and access their information. Different industries call for additional protection regulations based on other concepts of individual rights.
- Data Compliance for Ethics and Data Privacy: One of the essential facets of a data compliance framework is the ethics of maintaining user privacy. Healthcare, retail, finance, and other industries have regulations that define user privacy as sacred and foundational components of their operation.
- Data Compliance for Business Uses: Outside of data privacy from unauthorized disclosure, data compliance also intersects with proper business uses. While some data regulations are more rigorous than others, depending on where they have jurisdiction, many frameworks highlight how a business can use information and how it cannot. Some of these frameworks (like the General Data Protection Regulation [GDPR]) also specify stringent guidelines for how long information can be used and under what circumstances.
- Data Compliance for Consent: Following from the previous list item, consent is an integral part of compliance. Some frameworks require that you provide opt-out information for marketing or business use, while even more strict frameworks require that businesses get provable, documented consent.
