Data compliance means following rules to protect sensitive digital assets, such as personal information and financial details, from loss, theft, and misuse. Data compliance standards are industry rules, state or federal laws, or international regulations like GDPR. They specify what data to protect, what processes are acceptable, and the penalties for not following the rules.
Data compliance is different from data security, which covers all the procedures, technologies, and processes for safeguarding sensitive data. However, being compliant doesn’t guarantee security, and minimum compliance doesn’t protect against financial or reputational losses from a breach.
Protecting data security compliance standards and privacy is very important in the digital world. Data compliance ensures that organizations follow standards and regulations and handle data responsibly. This article explains the importance of data compliance in safeguarding personal information.
Overview of Data Compliance Standards
Data compliance standards regulate how data is handled to protect personal information and guide organizations. Following this list of compliance regulations and standards helps maintain customer trust and reduce risks of data breaches and privacy violations.
1. GDPR Scope
The General Data Protection Regulation (GDPR) of the European Union includes regulations regarding individuals’ rights to know what data businesses hold about them and rules on data processing and reporting of breaches.
Applicability
These compliance regulations apply to companies located in Europe and those that conduct business with individuals under EU jurisdiction. It is mandatory for organizations that handle personal data to comply with these regulations.
Key Requirements
- Obtaining consent from individuals for data processing
- Minimizing the amount of data held by organizations
- Ensuring the rights of data subjects are protected
2. HIPAA Scope
HIPAA is a law that applies to organizations in the US that handle healthcare and medical data. Its goal is to safeguard the privacy and security of healthcare records, ensuring their confidentiality and safety.
Applicability
These regulations apply to organizations that handle electronic health records. Encryption and strong access controls are necessary to ensure data security and compliance standards. Security measures must be in place during any data-sharing activities.
Key Requirements
- Restricting access to electronic health records
- Implementing encryption and strong access controls
- Maintaining audit trails for data interactions and security monitoring
3. PCI DSS Scope
The Payment Card Industry Data Security Standard (PCI DSS) is a set of rules for businesses that handle cardholder data. These rules are in place to ensure that credit card numbers and data are protected.
Applicability
This information is relevant for businesses that handle customer financial information. Compliance is mandatory for accepting card payments, and it applies to merchants responsible for card data security.
Key Requirements
- Implementing adequate firewalls and security measures
- Regularly testing systems and processes
- Ensuring a certain level of security for cardholder data
4. SOX Scope
The Sarbanes-Oxley Act of 2002 (SOX) aims to prevent corporate accounting scandals. It specifically focuses on maintaining accurate financial reporting and recordkeeping.
Applicability
For organizations involved in financial reporting, it’s important to note that their IT departments play a crucial role in meeting compliance requirements. These requirements mainly pertain to record retention and real-time reporting.
Key Requirements
- Automating reporting and setting up alerts for key events
- Timely backups and document management systems for record retention
- Full visibility into the firm’s digital estate for effective compliance
5. CCPA Scope
The CCPA is a robust consumer protection law in the United States, comparable to California’s version of the GDPR.
Applicability
This regulation applies to companies that meet specific revenue thresholds. It pertains to businesses that manage the personal information of a substantial number of customers. This is important for medium and large organizations that do business with customers in California.
Key Requirements
- Broad definition of private data and customer profiles
- Compliance requirements for companies meeting specific criteria
- Potential fines for data breaches can be significant
Widely Recognized Data Compliance Standards and Regulations
Some well-known rules for data compliance are recognized worldwide. Examples are the GDPR, CCPA, and HIPAA. These rules have certain scopes and requirements that businesses must follow to keep data private and secure.
1. Data Minimization
Data minimization means collecting and keeping only the personal data needed for a specific purpose. It exclusively focuses on collecting data that is important and essential for the business. This helps reduce the risk of unauthorized access, data breaches, and misuse of personal information.
When organizations collect and keep less data, they decrease the risk of problems like unauthorized access, data leaks, and misuse. It also helps save money on storage and ensures data is better protected.
2. Consent Management
Consent management involves permission from individuals before using their personal information. This includes telling them why they need it and who will see it. Consent management gives individuals more control over their data. It helps organizations follow the law, like the General Data Protection Regulation (GDPR).
Obtaining informed consent from individuals ensures that organizations process personal data lawfully, transparently, and for individual privacy rights. Consent management enables individuals to make informed decisions about their data, strengthens trust, and demonstrates an organization’s commitment to privacy compliance.
3. Data Breach Notification
Data breach notification means telling customers if their personal information has been compromised. It includes explaining what happened, the risks involved, and what they should do to protect themselves. This helps the customers stay safe.
It also helps organizations meet their legal obligations, be transparent, and avoid damage to their reputation and finances.
4. Data Subject Rights
Data subject rights are provided to individuals over their personal data. These include the right to access, correct, delete, limit processing, and object to processing. Following these rights is important for organizations to build trust with individuals and comply with data protection principles.
Respecting people’s rights to their personal data is important. It helps build trust and makes sure data is handled responsibly.
Protecting Privacy and Data Security Standards
There are numerous advantages to adhering to data compliance standards, particularly in safeguarding privacy and ensuring data security.
1. Legal requirements: Laws like GDPR and CCPA give individuals rights over personal data and require organizations to protect it.
2. Risk mitigation: Compliance standards help organizations protect personal data by providing guidelines on security measures like encryption, access controls, data minimization, and regular assessments. By following these standards, organizations can prevent data breaches and unauthorized access.
3. Consent and transparency: It’s important to get permission from individuals before using their personal information. Organizations have to give clear privacy notices that explain what data is collected and how it will be used. This helps individuals know their rights and make informed choices about their data.
4. Data subject rights: Compliance standards protect users’ rights to control their personal data. These rights include accessing, correcting, deleting, limiting processing, and moving personal data. Organizations that follow these standards help individuals exercise their rights.
Key Components of Data Compliance Frameworks
Data compliance frameworks consist of several essential components. These include data minimization, consent management, data breach notification, and data subject rights. Each component serves a specific purpose in ensuring compliance and contributes to building a strong foundation for data protection.
1. Purpose limitation: Companies can only collect and use personal data for specific and legitimate reasons. They can’t use it for anything else without permission.
2. Data minimization: Businesses should only collect the personal data that they need to achieve their goal. They are prohibited from collecting more data than necessary because it can put users’ privacy at risk.
3. Security safeguards: To keep personal data safe and private, companies must implement security measures, including encryption and access controls, security checks, and staff training.
4. Consent and lawful basis: When organizations want to use people’s personal information, they have to get permission from those individuals first. This permission should be given freely, and the individuals should know exactly what they’re agreeing to.
5. Data subject rights: Data compliance rules protect people’s rights over their personal information. These rights include accessing, correcting, deleting, limiting use, objecting to use, and transferring data. Organizations must allow individuals to use these rights and respond quickly to their requests.
6. Data transfers: Standards make sure that personal data is protected when it’s moved to a different place. Organizations may need to use things like data transfer agreements, Privacy Shields, or Standard Contractual Clauses to keep the data safe.
7. Accountability: Organizations need to follow privacy and security rules. They must keep records of their data processing, check for risks, and have someone in charge of data protection. They also need to show they follow the rules.
Enforcement and Consequences of Non-Compliance
Breaking data rules can result in hefty fines and damage to your reputation. Penalties vary depending on your location and the specific rule you violate.
1. Fines and Monetary Penalties
- Organizations may face substantial fines based on the severity of the violation.
- GDPR allows fines up to 4% of annual global turnover or €20 million (whichever is higher).
- CCPA imposes fines of up to $7,500 per intentional violation and $2,500 per unintentional violation.
2. Legal Remedies and Lawsuits
- Non-compliant organizations may face legal actions from affected individuals or data protection authorities.
- Lawsuits can result in financial damages, compensation claims, or injunctive relief.
3. Reputational Damage
- Non-compliance can severely damage an organization’s reputation, leading to customer distrust and potential loss of business.
- Negative publicity and media coverage can impact brand image and long-term viability.
4. Business Restrictions and Suspension
- Regulatory authorities may impose temporary or permanent restrictions on an organization’s operations.
- Entities may face suspension of data processing activities until compliance is achieved.
Industry-Specific Data Compliance Standards
Different industries have specific regulations for handling sensitive information. PCI DSS applies to the payment card industry, while FISMA applies to the US federal government. These standards ensure data security and privacy.
Payment Card Industry Data Security Standard (PCI DSS)
This is a security standard set by the Payment Card Industry Security Standards Council. It is relevant for companies that handle data pertaining to transactions made with a credit card.
Scope and Applicability
PCI DSS applies to merchants, service providers, financial institutions, and any organization that accepts processes, or stores payment card data.
Security Requirements
- Build and maintain a secure network infrastructure.
- Protect cardholder data through encryption, access controls, and network segmentation.
- Implement strong security practices, including regular vulnerability assessments and penetration testing.
- Maintain strict access control measures to limit data access on a need-to-know basis.
- Regularly monitor and test networks to detect and respond to security incidents.
- Develop and maintain an information security policy.
Compliance Validation
It is essential for organizations to regularly undergo compliance assessments, which can be in the form of self-assessments or third-party audits. Failure to comply may lead to financial penalties, loss of card processing privileges, and damage to the organization’s reputation.
Federal Information Security Management Act (FISMA)
FISMA is a law that sets information security standards for US government agencies and organizations that handle federal data.
Scope and Applicability
The FISMA regulations are applicable to federal government agencies, contractors, and other entities that handle federal information by processing, storing, or transmitting it.
Risk Management Framework
It is recommended to establish a thorough risk management framework that can evaluate, track, and minimize any potential information security risks. This can be achieved by creating and sustaining a system security plan (SSP) that outlines appropriate security controls and procedures. Additionally, it is important to regularly conduct security assessments and evaluations to ensure consistent compliance.
Continuous Monitoring
It is important to set up ongoing monitoring procedures to quickly identify and address any security incidents. In addition, it’s essential to regularly evaluate the efficacy of security measures and make updates as needed.
Reporting and Compliance Validation
It is required to send yearly FISMA reports to the Office of Management and Budget (OMB) and the Department of Homeland Security (DHS). Agencies may also be subject to occasional audits and assessments to ensure compliance.
International vs. Country-Specific Data Compliance Standards
| Aspect | International Data Compliance (GDPR) | Country-Specific Regulations |
| Scope | This applies to organizations outside the EU if they handle EU citizens’ data | Generally does not have an extraterritorial effect |
| Legal Framework | Regulation | Laws |
| Extraterritorial Effect | This applies to a specific country and its citizens | This may vary across different countries |
| Data Subject Rights | Provides specific rights to data subjects | May vary across different countries |
| Consent Requirements | Strict consent requirements for data processing | May have varying consent requirements |
| Penalties and Fines | Significant penalties and fines for non-compliance | Penalties and fines may vary |
| Data Transfer Restrictions | Imposes restrictions on transferring data outside the EU | May have varying restrictions on data transfers |
| Data Protection Officer | Mandatory requirement for certain organizations | May or may not require a Data Protection Officer |
Challenges in Achieving and Maintaining Data Compliance
Businesses can experience the following challenges in achieving and maintaining data compliance:
Complexity
Companies must follow many rules and regulations, which get more complicated as they grow and work in different countries. They must follow specific compliance laws for each country and international standards like GDPR.
Conflicting Requirements
Compliance frameworks can have different requirements that conflict with each other. Organizations must figure out how to resolve these differences to meet international and country-specific regulations.
Resource Allocation
Meeting different compliance standards takes up a lot of resources like time, expertise, and money. It can be tough for small businesses with limited budgets to allocate these resources effectively.
Cross-Border Data Transfers
Rules like GDPR limit sending personal data outside the EU. Companies that work worldwide have to follow these rules and obey different country-specific data transfer laws. These laws may vary from country to country.
Keeping Up with Changes
Data protection laws can change, and it can be difficult for organizations to keep up, especially if they operate in different regions around the globe. Therefore, businesses must stay updated with the most updated regulations and adjust their processes accordingly.
Cultural and Language Differences
Organizations should be aware of cultural and language differences when dealing with compliance requirements in different countries. This means they must understand the local customs and ensure that privacy notices and consent forms are properly translated and follow local regulations.
Enforcement and Penalties
Organizations may be fined if they don’t follow the rules set by different countries. Knowing the consequences of breaking these rules is important to avoid legal and financial trouble.
The Solution
Organizations must develop robust compliance programs that consider both international data compliance standards like GDPR and country-specific regulations to ensure data protection and privacy practices align with the requirements of each jurisdiction in which they operate.
5 Steps to Ensure Data Protection Compliance
Businesses can follow the ensuing 5 steps to stay compliant:
1. Assess your data inventory
To ensure data is secure and private, keeping track of where it’s stored and who can access it is important. Mapping out this information helps teams understand how data flows.
Make sure to take inventory of all servers, devices, and cloud services that collect, store, and transmit data, including data on mobile and personal devices like laptops and flash drives. This is important for meeting data requirements, identifying risks, and managing data security.
2. Reduce the amount of data that you retain
To keep personal information safe, don’t collect or keep more data than necessary. Only keep personal information as long as needed to finish tasks. When collecting data, only ask for what’s necessary. If you don’t need extra personal information, get rid of it. Keeping personal data for a long time increases the risk of someone stealing it. To reduce this risk, keep as little data as possible and ensure that any stored data is anonymized.
3. Protect your data with three layers of controls
To keep personal information safe, use physical, technical, and administrative controls. These controls will reduce the risk of data damage, loss, or unauthorized access. Breaches can start with physical access, like leaving files in an unlocked cabinet or watching someone enter their password. Natural disasters can also damage physical infrastructure and compromise security. Therefore, it’s best to secure your data with physical, technical, and administrative controls. Lock up drives, use encryption and multi-factor authentication, and train employees on best practices and policies.
4. Consider your data usage
It’s important to keep personal and protected information safe from identity theft and hacking. Ensure you store it safely, follow regulations for how long to keep it, and dispose of it properly. This means removing physical copies of the data, following disposal regulations, and wiping data from devices before throwing them away. Even if your organization’s old computers are refurbished, you should have their data wiped to prevent anyone from accessing old files.
5. Have a plan
To prevent costly data breaches, assign a senior staff member to coordinate response efforts and create a written contingency plan. Give employees defined roles and responsibilities. A quick and strategic response is crucial to minimize impact. Prioritize information security and privacy programs to protect data. These best practices can reduce risks to your business.
Future Outlook for Data Compliance Standards
Data processors are facing stricter data privacy rules every year, and companies are being fined more often for not following them. COVID-19 in 2020 forced organizations to quickly adapt to digitalization and follow data privacy and security regulations. Check out the compilation below for all the crucial details.
Broadening the Data Protection Roles
- Pressures of data privacy compliance laws require a larger team for compliance.
- Single individuals cannot manage data protection regulations alone.
- Collaboration between Chief Data Officers, Data Protection Officers, and Chief Information Security Officers is encouraged.
Data-protection-as-a-Service
- Data security companies offer data protection as a service.
- Businesses seek scalable, flexible, and managed data protection services.
Adoption of Multi-Standard Compliance Tools
- Privacy and security interests merge, leading to the alignment of DPMS and ISMS.
- Companies strive to manage multiple standards and systems with a single tool-driven platform.
GDPR Strengthening Its Influence
- GDPR compliance is a top priority for EU-based privacy professionals.
- Increase in companies achieving GDPR compliance in 2021.
- Strict penalties drive continuous improvement in cyber policies.
Schrems II Continues to Be a Concern
- Transfer of personal data from Europe to the U.S. faces challenges.
- Privacy Shield is no longer lawful, requiring alternative data transfer mechanisms.
- Additional safeguards are needed with Standard Contractual Clauses (SCCs) to protect personal data.
Wrapping Up
The exponential growth of digital information and the increasing frequency of data breaches underscore the need for robust measures to protect sensitive data. Data compliance standards provide a framework that organizations must follow to ensure the security, privacy, and integrity of the data they handle.
By embracing data compliance, businesses can build trust with their customers, partners, and stakeholders, fostering long-lasting relationships and gaining a competitive edge in the market. Compliance not only safeguards data but also helps in avoiding hefty fines and legal repercussions that may arise from non-compliance.
Moreover, data compliance is not just a legal requirement; it is a moral and ethical responsibility to safeguard the privacy and rights of individuals whose data is being processed. Adhering to data compliance standards demonstrates a commitment to respecting user privacy and upholding transparency in data practices.
As the regulatory landscape continues to evolve and data breaches become more sophisticated, organizations must prioritize data compliance as a core aspect of their operations. Implementing strong data governance, robust security measures, and regular audits are essential steps toward achieving and maintaining compliance.
