The internet and modern technology have provided us with exceptional access to information and prospects in human history. Simultaneously, data breaches and privacy concerns have become widespread. Following a series of high-profile data breaches, organizations are under increased scrutiny for how they access, store, manage, and dispose of sensitive data.
Businesses must adhere to a variety of governmental and industry-specific data privacy norms and regulations in order to conduct business with their clientele. These guidelines and regulations assist businesses in safeguarding sensitive data. It is practically difficult for businesses to operate without access to some data protected by legislation.
Data is almost certainly shared or used each time you connect with a consumer, investor, employee, or contractor. These interactions result in the collection of a plethora of Personally Identifiable Information (PII) and other confidential material. Businesses that deal with PII are accountable for protecting it in accordance with local and international legislation.
Understanding how to maintain compliance with these standards can help you create trust and improve your company’s public perception. This blog will talk about the importance of data compliance for business and its benefits.
What Is Data Compliance?
The term “data compliance” refers to the professional norms and policies that businesses must adhere to in order to safeguard sensitive data from loss, manipulation, theft, and exploitation. Data compliance guarantees that confidential data is managed and maintained in a manner that complies with applicable laws and regulations, as well as corporate business principles.
It is important to note that global data compliance is required for every business. You must adhere to data protection laws in all the countries in which you conduct business, not just in your own country. Regulations governing data collection and use vary by area. For instance, U.S based businesses that operate on a global scale must adhere to the EU’s General Data Protection Regulation, or GDPR.
Common Data Compliance Standards
Without going into too much detail, the following are some of the most widely used data compliance standards and specifications in the contemporary world.
GDPR (General Data Protection Regulation)
GDPR is applicable to just about any firm with activities in the European Union that gather personal data on EU citizens. Businesses located outside the EU that provide goods or services to EU customers or entities are also included, which includes virtually every major firm around the globe.
HIPAA (Health Insurance Portability and Accountability Act)
HIPAA data security and compliance regulations apply to all entities conducting business in the healthcare industry, including healthcare service providers and insurers. HIPAA is a United States-specific law. HIPAA does not apply to data handled by companies based outside the United States.
PCI-DSS (Payment Card Industry Data Security Standard)
PCI-DSS is applicable to businesses that handle client payment card information. Credit card businesses are required to comply with this data compliance standard. Any online merchant who processes, transmits, or stores credit card data must comply with PCI-DSS.
While data compliance standards vary significantly across countries, cities, administrations, and businesses, they all aim to address the following:
- The type of data that must be safeguarded
- Processes to be implemented to safeguard that data
- What the consequences are if a company does not adhere to these protocols
These were the three main data compliance standards. However, there are several other legislative and industry-specific data privacy standards and regulations that firms must follow during their daily operations. Many of them are location – or industry-specific.
Why Is Data Compliance Important?
You can anticipate business rewards when your corporation complies with numerous legislative and commercial data privacy norms and requirements. Beyond assuaging inspectors and avoiding fines, data compliance can assist you in addressing a customer’s concerns and reassuring them that they can trust you with their data. The following are the business advantages of proper data compliance by your business.
Security
The most easily recognizable benefit of adhering to data security practices and regulations is that it strengthens your security infrastructure. Every day, businesses generate, share, and keep massive volumes of data. This data is constantly under attack by hackers and other cyber threat actors who are constantly on the lookout.
Data compliance helps to mitigate the risk of a major breach by preventing threat actors from obtaining, disclosing, or damaging your company’s confidential material and your customers’ personally identifiable information.
Economics
Failure to adhere to data compliance requirements carries substantial penalties for the violator. In other words, noncompliance will literally cost your organization money. Failure to implement the necessary security measures exposes your organization to vulnerabilities, which can be catastrophic.
As per the latest data breach study from IBM and the Ponemon Institute, the estimated cost of a data breach in 2021 was $4.24 million. While major organizations may be able to absorb such a loss, smaller enterprises may face significant difficulties. Companies can reduce financial losses as a result of fines or data breaches by adhering to data compliance standards.
Trust and Relationships
For some firms, particularly those oriented around the consumer, the damage produced by a data breach might be catastrophic and negatively impact customer trust and understanding. A business that adheres to data compliance standards enhances data protection and looks more legitimate and dependable to clients.
Today’s consumers are increasingly concerned about the security and use of their data. When it comes to data protection, adherence can help you develop a good brand reputation. Failure to adhere to the rules and regulations enacted to safeguard their data might result in legal complications and degrade your reputation.
Wrapping Up
If your firm collects data from clients, you must ensure that the data is secure. Now, there are numerous industry- and location-specific legislation governing data privacy and security. Adhering to legislation and standards can assist organizations in enhancing data security, avoiding costly fines, and fostering client loyalty.
Having an effective data compliance plan in place can contribute significantly to the development of a more robust, transparent data protection program. ComplyD can assist you in developing a stronger interaction with your clients.
Being a leading data compliance management firm, ComplyD can assist you in developing a tailored compliance solution for your organization. Contact ComplyD today or visit their website to discover how their data compliance solutions can help you.
