Compliant data is collected data that conforms to industry-specific security standards, regulations, and legal requirements. On a practical level, it’s the foundation upon which trust and confidence are built, assuring individuals and entities that their personal, financial, and sensitive information is secure.
- Financial institutions must rigorously apply data security and compliance standards to customer transactions and other sensitive financial information.
- Medical providers and insurers must comply with electronic health records regulations to protect patient privacy and adhere to industry standards and best practices.
- Government agencies and bureaus must comply with data security regulations pertaining to tax records, census data, and public health statistics.
Any business or online platform that uses databases to collect customer or client information likely has some form of data compliance it must adhere to. For instance, any company that accepts credit cards must also adhere to PCI DSS (Payment Card Industry Data Security Standard) rules. In the EU, data privacy, consumer rights, and fair business practices have compliance regulations such as the GDPR and Consumer Rights Directive. Let’s take a deeper look at some of the most well-known data security laws, regulations, and best practices.
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Data Security and Compliance: What Every Business Needs to Know
According to the latest estimates, nearly 330 million terabytes of data are created daily—that’s 120 zettabytes annually. And it doesn’t show any sign of slowing down, with experts predicting those numbers will increase by over 150% by 2025.
For better or worse, companies are collecting a lot of that data, including personal identifying information (PII) like names, dates of birth, and credit card numbers. How they use this data differs, but by law, the companies collecting sensitive data must protect it against potential threats, including cyber attacks and breaches.
Understanding how organizations collect and use sensitive data is critical for making informed privacy and data-sharing decisions. Of particular concern is whether companies comply with relevant data protection laws and privacy regulations.
Data Privacy Regulations
Numerous data privacy regulations have been enacted worldwide. Some of the best-known include:
- General Data Protection Regulation (GDPR). One of the world’s most stringent data protection laws, the GDPR was established by the European Union (EU) and European Economic Area (EEA). The regulation contains seven principles and sets comprehensive data protection and privacy standards like lawfulness, fairness, transparency, accuracy, and storage limitation, giving individuals greater control over their personal data. Any organization that processes data within the EU or EEA, regardless of its location, must adhere to GDPR.
- The UK’s Data Protection Act 2018 incorporates some GDPR provisions into UK law and governs the processing of personal data.
- The California Consumer Privacy Act (CCPA) is considered the most stringent data protection law in the United States. It grants California residents wide-ranging privacy rights and imposes rules on certain businesses that collect and process California consumers’ personal information.
- Personal Information Protection and Electronic Documents Act (PIPEDA) is Canada’s federal privacy law. It aims to balance the needs of individuals and businesses, governing how private-sector organizations can collect, use, and disclose personal information during commercial activities.
- Health Insurance Portability and Accountability Act (HIPAA) is the US federal law that protects a patient’s health information collected by healthcare providers, insurers, and healthcare clearinghouses.
Other well-known and influential laws are Brazil’s General Data Protection Law (LGPD) and Singapore’s Personal Data Protection Act (PDPA), which governs how data is collected, used, and disclosed.
Data privacy regulations tend to vary across countries and regions, and local or industry-specific laws often apply in specific jurisdictions. Organizations that need to comply with relevant rules based on the data they collect and process can find keeping up an arduous, time-consuming task.
Security Frameworks and Best Practices
Data security encompasses everything from perimeter protection to encryption and disaster recovery. Compliance regulations make protecting data even more complex. Fortunately, security frameworks and standards can help by preserving data confidentiality, integrity, and availability.
- Security standards are like a recipe, enumerating steps organizations must perform.
- Security frameworks are documented processes or blueprints that help businesses manage risk and reduce vulnerabilities.
Various security frameworks exist, but three of the most widely recognized are:
- The National Institute of Standards and Technology (NIST) Cybersecurity Framework was established to encourage greater collaboration between the public and private sector for identifying, assessing, and managing cyber risks. Compliance is voluntary; however, the NIST is considered the gold standard for pinpointing security gaps and meeting security regulations.
- ISO/IEC 27001 and ISO 27002 are the international standards for validating internal and third-party cybersecurity programs. An organization with ISO certification demonstrates to various stakeholders it is doing the right thing to manage security risks.
- The Center for Internet Security (CIS) Controls is a non-profit organization that focuses on improving public and private sector cybersecurity response and readiness. It provides businesses and other entities with prescriptive, prioritized, and simplified best practices they can use to strengthen their cybersecurity initiatives and programs.
Data Breach Response and Reporting
When a data breach occurs, organizations are exposed to fines, litigation, loss of reputation, and brand erosion. Multiple laws and regulations require companies that suffer a data breach to report and respond in various ways, including:
- Containing the breach.
- Investigating the incident.
- Notifying affected individuals and authorities with specific details of a breach.
- Communicating promptly with stakeholders so they can take steps to protect themselves.
Potential consequences of non-compliance vary according to industry and sector. For instance:
- HIPAA violations can include criminal penalties, including imprisonment.
- GDPR fines can cost violators up to 4% of a company’s annual global revenues or $22 million, whichever is higher.
- Violators of the UK’s Data Protection Act can incur prison sentences and fines.
Carrying out the required due diligence to ensure law and regulation compliance is always less risky than not complying. However, many organizations lack the internal resources to keep up with the ever-evolving regulation landscape.
Data Security and Compliance Best Practices
It’s safe to say that implementing company-wide, robust data security practices is crucial to protecting your organization’s sensitive data. Yet, this is no easy task, especially when data is collected and processed through siloed tools and manual processes. Organizations are left in the dark about what sensitive data they maintain, making it difficult to put data protection and compliance measures in place.
What can your business do to improve its data security policies? It begins with adopting these seven best practices.
- Gain visibility. Aggregating and organizing all metadata into a single source of truth ensures that only authorized individuals can access sensitive information. It also reduces the risk of unauthorized access, potential misuse of data, and data breaches.
- Classify sensitive data. Routine risk assessments identify potential vulnerabilities and data security threats. Classifying data assets and implementing appropriate controls helps mitigate risks, as do ongoing monitoring, incident response planning, and disaster recovery strategies. Data discovery lets you quickly see where sensitive data resides in real-time. Data autotagging, also known as automatic data tagging or automated metadata tagging, assigns relevant tags or labels to data based on predefined rules, patterns, or learning algorithms, making data easier to track and locate.
- Monitor permissions and data access by role, attribute or policy. Data access should be granted only to the individuals who need it to complete their task or project. Data access management helps you control and manage who can access information and under which terms and conditions they may do so.
- Enhance access control with granularity and flexibility. When your organization outgrows RBAC, you can shift to the more intelligent and sophisticated policy based access control (PBAC) or attribute based access control (ABAC), which enables you to align access decisions more precisely with your security, compliance, and evolving business requirements.
- Invest in awareness. People increasingly refer to data as the “new oil” or “new gold” due to its immense value, exploitation potential, and transformative power to drive business success. Employees, who play a significant role in ensuring data security and compliance, need comprehensive training programs that explain why data needs to be accessed—not merely locked up for security reasons. They should also be educated on data protection practices, security policies, and individual responsibilities. Other critical topics to cover include phishing awareness, social engineering techniques, strong passwords, and multi-factor authentication, which adds an additional layer of security when signing in.
- Drive insights and analytics. Opening up data access and promoting a data-driven culture empowers teams to unlock data’s full potential, improving decision-making and driving innovation and growth.
While this list is comprehensive, it is not exhaustive. Every organization should, when necessary, expand on these topics to create a guide that aligns with its specific needs.