What Is Data Compliance And How Do We Implement It?

According to studies, data protection and privacy legislation are now in place in 69% of countries worldwide, and 76% of global consumers believe companies must do more to protect their online data privacy. So, if you are working in compliance, data protection should be on top of your mind. 

Businesses collect sensitive user information for a plethora of reasons. But how do they ensure the safety of user information? This is where data protection standards like ISO 27001, SOC 2, or GDPR come into play. 

Now, all you need to do is ensure your team follows the best practices. To help with that, let’s explore what data regulatory compliance is and how to implement it.

What is data compliance?

Data compliance involves finding the relevant guidelines related to data protection, storage, and other activities. It establishes policies, procedures, and protocols to safeguard your data from unauthorized access, use, as well as malware and other cyber threats. 

Data compliance involves identifying the relevant governance frameworks that ensure the highest standards of data security, storage, and protection. The process includes setting up procedures, policies, and protocols to protect the company data (customer lists) from unauthorized access and cybersecurity threats.

Here are some key insights that highlight the importance of taking data compliance seriously:

• The number of GDPR violations has risen to a high point starting from  July 2020. The fines range over €1.1 billion by January 2022 alone.
• The cost of data breaches has risen from an astounding mark of US$3.86 million in 2020 to US$4.35 million in 2022. The cost is expected to touch the US$5 million mark this year.
• 69% of countries worldwide now have data protection and privacy legislation in place, with a further 10% having draft legislation, and over 70% of organizations say they receive significant business benefits from privacy.

Therefore, proper policies have to be in place to help your company protect data according to the region’s law.

Why is data compliance important?

Data compliance is substantial because compliance with the said regulations and standards helps ensure that the integrity, confidentiality, and availability of the organization’s data are adequately protected. To drive home the point, here are the benefits of compliance:

• Compliance signals your high-value clients or prospects that their sensitive information will remain secure
• Observation also helps avoid noncompliance and protects your company from bad publicity
• If your corporate code of ethics does include data compliance, it attracts high-value employees and customers

How do you ensure data compliance?

To ensure data compliance, companies can take the following measures:

• Develop a data governance framework that outlines policies and procedures for managing and securing data.
• Conduct regular risk assessments to identify vulnerabilities in data storage and management.
• Implement data encryption and access controls to protect sensitive data from cyber threats.
• Train staff on data handling procedures and the importance of data security.
• Conduct regular audits to assess compliance with data protection regulations, such as the ISO 27001 or SOC 2.

What are the data compliance regulations and standards?

To safeguard sensitive digital assets such as personally identifiable information and financial details from loss, theft, and misuse, businesses must follow regulations.

Several regulatory frameworks govern the use, processing, and storage of data. These includes the following regulations:

• GDPR
• SOX
• CCPA
• HIPAA
• PCI DSS

GDPR

The European Union’s General Data Protection Regulation (GDPR) is one of the most comprehensive global protection laws. The GDPR regulates personal data protection for individuals in the EU and the European Economic Area.

One of the interesting things about GDPR is that it does not just apply to companies based in Europe. If you seem to have business with any person under EU’s jurisdiction, you have to abide by the GDPR’s laws.

It mandates that organizations obtain clear and explicit consent from individuals before collecting and processing their data. 

SOX

The Sarbanes-Oxley Act (SOX) is a U.S. federal law that regulates corporate governance and financial reporting. SOX imposes a range of requirements on publicly traded companies’ financial reporting processes, including establishing internal controls, regularly reviewing and testing these controls, and certifying financial statements by executives. 

CCPA

The California Consumer Privacy Act (CCPA) is a privacy law enacted in California that governs the processing of personal data by businesses operating or collecting data from California residents. The CCPA grants Californians the right to request information about the personal information that companies have collected about them, request that their data be deleted, and sue for damages in case of data breaches.

HIPAA

The Health Insurance Portability and Accountability Act (HIPAA) is a U.S. federal law regulating personal health information processing. It applies to health care providers, clearinghouses, and plans. It requires that all health records are restricted to only those with valid reasons for accessing them. 

Therefore, when electronic records are shared, necessary encryption and precautionary measures have to be in place. One of the key features of HIPAA is that it requires an audit trail of every interaction someone has taken with the data. 

PCI DSS

The Payment Card Industry Data Security Standard (PCI DSS) is a set of security standards governing the processing of payment card information. It mandates that organizations that accept payment cards should follow specific security protocols to protect payment card information.

One thing you should note is that, unlike other standards in the list, PCI DSS is not mandated by the government’s set of rules. It is more on the side of an industry one. Hoover, this does not make it any easier. If a company is found non compliant with the set of rules, they may face hefty fines and the relationship with banks may come to an end.

Cost of data compliance implementation

As companies navigate the ever-changing world of data protection and compliance, one thing remains constant: the cost of implementation. While it may seem like a hefty expense, the cost of complying with data regulations pales compared to the price of non-compliance. 

The average cost of data compliance is said to be $ 2 million. If you want a detailed estimate on compliance costs, feel free to use Sprinto Cost Calculator.

Recent research has found non-compliance can be up to 2.71 times higher than the cost of implementing compliant measures. Investing in data compliance is a necessary and wise business decision. To avoid potential legal, financial, and reputational damage, companies must prioritize compliance and allocate appropriate resources to ensure they adhere to data regulations.

What’s next?

Implementing data compliance can seem daunting, but there is no wonder why it is necessary – and why the numbers are growing. There are many ways to ensure your organization remains data-compliant. However, it’s essential to be aware that challenges can come up. Even with the aid of tools and automation, it’s critical to understand the terms associated with data compliance.  

Having a solution like Sprinto that specializes in frameworks such as GDPR, SOC 2, ISO 27001, and HIPAA, not only helps to keep your organization up-to-date with the latest regulations but helps security teams stay on top of the game. Learn how you can automate evidence collection, monitor controls in real time, and expedite the compliance process. 

Ready to talk? Speak to our experts today.

FAQs

What does data compliance mean?

Data compliance means adherence to laws, regulations, and standards governing the collection, storage, processing, and sharing of data. It ensures that organizations handle data responsibly, protecting individuals’ privacy and maintaining data integrity and security.

What are the 3 states of data in compliance?

The three states of data are:

• Data at rest
• Data in motion
• Data in use

What is a data compliance framework?

The framework of data compliance involves identifying rules for protecting, securing, and storing data. It also includes developing policies, procedures, and protocols to prevent unauthorized access and other cybersecurity risks.

What are Data compliance examples?

Some of the popular data compliance examples include GDPR, PCI DSS, HIPAA, and SOX.