The Benefits of Data Compliance To New England Businesses
The internet has given us access to abundant information and opportunities unprecedented in human history. At the same time, data breaches and privacy issues have become commonplace. In the wake of many high-profile data breaches, there’s more scrutiny on how businesses handle, process, store, and dispose of sensitive data.
There are several governmental and industry data privacy rules and regulations companies must comply with in order to do business with their customers. These rules and regulations help organizations protect sensitive data. It’s nearly impossible for companies to get by without access to some data protected by some legislation in their day-to-day business.
Every time you interact with a customer, client, employee, or contractor, data is highly likely to be used or exchanged. These interactions bring a wealth of Personally Identifiable Information (PII) and other sensitive data. Companies that work with PII are responsible for protecting this information in compliance with local and global regulations.
Learning how to keep your business compliant with these regulations can build trust and improve publicity. Read on.
What Is Data Compliance?
Data compliance refers to the formal standards and practices organizations must follow to ensure that sensitive data is guarded against loss, corruption, theft, and misuse. Data compliance ensures that sensitive data is organized and managed in a way that allows companies to meet legal and governmental regulations along with enterprise business rules.
Data compliance is global. You must comply with data regulations in all the territories you operate in, not just your local area. Data regulations can differ from one region to another. For example, US companies operating globally must comply with the EU’s General Data Protection Regulation, or GDPR.
Common Data Compliance Standards
Without getting into too much detail, here are some of the most prevalent data compliance standards in the world today.
GDPR (General Data Protection Regulation)
GDPR applies to all organizations with operations in the EU that collect citizen data. Businesses outside of the EU that offer goods or services to consumers or organizations in the EU are also covered, so basically every major corporation in the world.
HIPAA (Health Insurance Portability and Accountability Act)
HIPAA data security and compliance standards apply to every entity that does business in healthcare, including healthcare providers and insurance companies. HIPAA is specific to the United States. Any data handled by businesses outside the US does not come under the purview of HIPAA.
PCI-DSS (Payment Card Industry Data Security Standard)
PCI-DSS applies to companies that deal with customers’ payment card information. Compliance is required by credit card companies. Any online merchant processing, transmitting, or storing credit card data must be PCI-DSS compliant.
There are many other governmental and industry data privacy rules and regulations organizations must comply with in their day-to-day operations. Most of them tend to be location-specific or industry-specific. Other notable examples are:
As you can see, there’s a wide variety of data compliance regulations that businesses must comply with in order to keep sensitive data from falling into the wrong hands. While regulations around data compliance vary widely across countries, states, governments, and industries, they always seek to address the following:
- The type of data that needs protecting
- Processes to implement in order to protect that data
- What the repercussions would be if an organization fails to comply with these processes.
Why Is Data Compliance Important?
You can expect to reap business benefits when your organization is compliant with the various governmental and industry data privacy rules and regulations. The benefits of data compliance go beyond appeasing auditors and evading fines; data compliance can help you address a customer’s concerns and let them know they can entrust you with their data.
Here are the business benefits of data compliance.
Better Data Security
The most obvious benefit of conforming to data security standards and practices is that it improves your security posture. Businesses produce, share, and store vast amounts of data every day. This data is under constant threat from hackers and other online threat actors, who are always on the prowl.
Data compliance minimizes the risk of a successful breach, keeping threat actors from stealing, exposing, or corrupting your organization’s sensitive data and your customers’ PII.
Failure to comply with data compliance standards results in hefty fines for the culprit. In other words, not complying will cost your business money literally. Failing to put the required security measures in place also leaves your business susceptible to breaches, which can also be costly.
The average cost of a data breach in 2021 was US$ 4.24 million, that’s according to the latest data breach report by IBM and the Ponemon Institute. While large corporations may be able to survive this kind of loss, smaller businesses will struggle. Businesses can ensure that they don’t lose money because of fines or breaches by following data compliance regulations.
Builds Customer Trust
For some organizations, especially those that tend to be consumer-focused, the damage caused by a data breach can be irreversible and can adversely affect customer trust and loyalty. A company that follows data compliance regulations is able to improve data security and appears more credible and trustworthy to customers.
Today, customers are more concerned about where and how their data is used. Data compliance can help you cultivate a strong brand perception when it comes to protecting data. Failure to comply with rules and regulations put in place to protect their data can result in legal issues and tarnish your brand.
If your business handles any data from your customers, you need to have robust data security. There are various industry-specific and location-specific regulations surrounding data security and data privacy at the moment. Ensuring compliance with regulations and standards can help businesses improve data security, avoid hefty fines, and foster customer loyalty.
Having an effective data compliance strategy can go a long way towards building a stronger, more transparent data protection program. At Spade Technology, we can help build a better relationship with your customers. Learn how we can help you create a customized compliance solution for your business.
Thanks to our colleagues at Velocity IT for their help with this article.