In one of our most recent posts, we discussed the importance of data privacy and the best practices organizations should employ to ensure that sensitive information are kept safe and secure. We also discussed the principles and regulations that govern data privacy. Here, we are going to be discussing data compliance. Data compliance is the practice of ensuring that entities follow regulations to ensure the sensitive data they possess are organized, stored, and managed so that they are guarded against loss, corruption, theft, and misuse.<\/p>
Read on to learn about data compliance regulations, solutions, and standards.<\/p>
Read Also: DATA PRIVACY: Importance & Best Practices For Organizations<\/a><\/p> As previously said, data compliance refers to the regulations and standards that a company must follow in order to protect the sensitive digital assets at its disposal \u2013 typically personally identifiable information and financial information\u2014from loss, theft, and misuse. These regulations take several forms. They specify what data must be protected, what practices are acceptable, and the penalties for failing to follow the standards.<\/p> Although data compliance and data security may sound similar, they are not the same thing. While both data compliance and data security aim to reduce and manage the risks involved with collecting, keeping, and handling data, data compliance merely ensures you satisfy the bare minimum of legal obligations. Data security, on the other hand, encompasses all of the processes and technology used to protect sensitive data, such as firewalls, encryption, and password protection protocols.<\/p> They are:<\/p> The Health Insurance Portability and Accountability Act of 1996 specifies how entities in the United States in possession of individuals’ healthcare and medical data must maintain the safety and confidentiality of these records.<\/p> Considering these are some of the more sensitive records, the penalty for failing to preserve them can be heavy on the organization. There have been instances where a corporation was forced to pay millions of dollars. For example, in 2018, a certain insurance company agreed to pay a $16 million fine after a hacking attempt exposed the health information of over 79 million customers.<\/p> Furthermore, HIPAA requires that all electronic health records be accessible only to those with legitimate reasons, so encryption and strong access restrictions are essential. The rules apply not only to records within the database, but also to those that are shared, thus steps must be taken to guarantee that actions such as emails and file transfers are thoroughly monitored, safeguarded, and managed.<\/p> The PCI-DSS is the second on the list of data compliance solutions. The Payment Card Industry Data Security Standard (PCI DSS) is an important aspect of any compliance process for organizations that deal with consumers’ financial information since it establishes regulations for how corporations manage and safeguard cardholder data such as credit card numbers.<\/p> Unlike GDPR, PCI DSS is an industry-standard rather than a government regulation. However, this does not diminish its significance, since any company found to be in violation of its data compliance standards may face severe fines or even have its relationships with banks or payment processors terminated, making it extremely difficult for businesses to take card payments.<\/p> Even if a company uses third-party services to process card payments, as many do, it is still the business’s obligation to ensure the security of any credit or debit card data it collects, transmits, or keeps.<\/p> The specific procedures that organizations must take will vary depending on how many transactions they process – those with larger customer bases will face considerably more strict data compliance regulations – but ultimately, PCI DSS standards require businesses to ensure a particular level of security.<\/p> It’s worth mentioning that, the Payment Card Industry Security Standards Council outlines a series of measures that businesses must take to comply with these standards. These measures range from installing a sufficient firewall to periodically testing systems and processes to secure cardholder data. Obviously, there can be no excuse for not having a clear plan in place to achieve these standards.<\/p> GDPR is one of the most recent and comprehensive data regulations. Since its enactment on May 25, 2018, GDPR has established a number of solutions concerning people’s right to know what data entities hold on them, how firms should go about processing this data, and tighter laws for reporting data breaches.<\/p> Interestingly, these regulations do not only apply to companies established in Europe. If you conduct business with any individual subject to the jurisdiction of the EU, you must adhere to the GDPR’s rules. While the law contains many requirements, the majority of them may be filtered down to three basic principles: getting consent, reducing the amount of data held, and protecting data subjects’ rights.<\/p> Though it may appear to be a minor step, the first thing every company must do to ensure compliance with GDPR legislation and standards is to appoint someone to oversee its activities. This person, known as a data compliance officer<\/a>, is required in certain firms that use vast amounts of data, and their duty is to oversee data protection strategy and implementation to ensure GDPR requirements and regulations are met.<\/p> This is one of the most strict consumer protections that many US-based companies will encounter. It has been dubbed as California’s GDPR, and while not as strict in areas such as reporting requirements as GDPR, it is in some ways much more than its European counterpart.<\/p> For example, it includes any information from which inferences can be drawn to create a customer profile that reflects a person’s “preferences, characteristics, psychological trends, predispositions, behavior, attitudes, intelligence, abilities, and aptitudes” in its definition of private data.<\/p> CCPA compliance will not be required for every firm. It only applies to enterprises with gross annual revenues of more than $25 million; those that acquire, receive, or sell the personal information of 50,000 or more individuals, households, or devices; or businesses that generate 50% or more of their annual revenue by selling customers’ personal information.<\/p> While this excludes many smaller businesses, it does mean that practically any medium or large enterprise working with clients in California will be covered. This may make it more relevant to many US firms than GDPR, because while some organizations chose to stop doing business in Europe entirely to avoid this regulation, it may be much more difficult for them to avoid the CCPA, because they do not have to be based in California, or even have a physical presence in the state, to be subject to its provisions.<\/p> The Sarbanes-Oxley Act of 2002 (SOX) was enacted to prevent a recurrence of the corporate accounting scandals that enveloped Enron, WorldCom<\/a> and others. As a result, because it focuses on financial reporting rather than data protection, IT professionals may consider it less vital than some of the other standards they must comply with. On the contrary, this is not the case. IT departments have distinct duties to play in ensuring that these needs are met. <\/p> To begin, they must comply with the CEO and CFO by ensuring they receive real-time financial reporting on the organization. This entails putting mechanisms in place to automate reporting and configuring alerts to be triggered when critical events occur that deserve closer scrutiny.<\/p> Additionally, IT personnel must also guarantee that all records are appropriately stored. As a result, effective and timely backups of critical information and document management systems are critical for maintaining compliance with these rules. To be effective, they must also ensure complete visibility into every aspect of their company’s digital assets. Instant messages, emails, recorded phone calls, and financial transactions must all be kept for at least five years in case auditors want them, hence, proper management systems must be in place.<\/p> Finally, IT professionals must ensure that recordkeeping and audits go as smoothly as possible when complying with SOX. Tools for automating activities, managing and monitoring data flow, and swiftly archiving and retrieving information will all play important roles in this.<\/p>What is Data Compliance?<\/span><\/h2>
What Are The 3 States of Data Compliance?<\/h2>
Data Compliance Regulations And Solutions<\/span><\/h2>
#1. HIPAA<\/span><\/h3>
#2. PCI DSS<\/span><\/h3>
#3. GDPR<\/span><\/h3>
#4. CCPA<\/span><\/h3>
#5. SOX<\/span><\/h3>
The Benefits of Data Compliance for Organizations<\/span><\/h2>