Data is crucial in most industries today. As the amount of business information grows, so do the standards for people’s protection of their personal information. With advanced cyberattacks, security compliance frameworks and cybersecurity have become essential fields to ensure data is collected, organized, stored, and managed in a safe way. This article will start by explaining what information security compliance means. Then, it will cover different data compliance standards and discuss some of the challenges.
- Data compliance is a formal regulatory structure that governments have in place to ensure that data and digital assets are collected, organized, stored, and managed in a safe way.
- Not adhering to data compliance standards and regulations can lead to various penalties such as hefty fines, legal recourse, and reputational damage.
- A couple of the most common data regulations governing specific industries include HIPAA, PCI DSS, GDPR, and CCPA.
What is data compliance?
Data compliance standards contain rules, recommendations, and optimal procedures that organizations must follow while managing data. Following these standards is pivotal to safeguarding data privacy, mitigating information breaches, and upholding the trust between organizations and their clients. Organizations often follow many standards based on their industry, geographic location, and the types of data they handle. Achieving and maintaining compliance can be complex and involve implementing various technical, organizational, and procedural measures.
What is SOC 2 compliance?
SOC 2 compliance standards, created by the American Institute of Certified Public Accountants (AICPA), is a security standard for service organizations to follow in handling customer data. It’s guided by key Trust Services Criteria: security, availability, processing integrity, confidentiality, and privacy. Each organization shapes its SOC 2 report to fit its needs. They make controls that match the trust service principles that apply to them. These reports give information about data management to customers, partners, and stakeholders. It helps everyone understand how the organization operates in terms of information security best practices.
Why is data compliance important?
Not following data protection security frameworks can result in hefty fines and legal troubles. Organizations must follow the relevant standards to avoid these problems and have a good reputation to sign customers and break into new markets. Good data compliance keeps sensitive information safe from unauthorized access or changes. This stops information breaches, which can be very expensive. Following information protection practices shows respect for the consumers’ privacy and builds trust.
When organizations focus on information security compliance, they show they care about security, and about their clients. This can make them stand out and attract customers who request this level of data security compliance. Strict data compliance regulations help organizations manage information better, find issues early, and lower the risks of breaches.
Data compliance vs. data security
Data security is how organizations protect their digital information from cyberattacks from outsiders. Examples of tools for this include antivirus software, firewalls, multi-factor authentication (MFA), and monitoring network security.
Security and compliance are related, but they have differences.
Organizations choose their security tools, while regulations from legislators and agencies shape compliance standards. Information security is part of data compliance, but having a security system doesn’t guarantee data compliance. Organizations can even create stricter security than required by data compliance to fully cover their needs for data security.
Data compliance is a bigger concept than information security. While security focuses on hacking, compliance focuses on your information security practices being in line with relevant security standards or regulations.
Four key data compliance standards
Data compliance standards are external regulations from regulating bodies for safeguarding data. Various data types need different levels of protection under diverse regulations. Now, let’s explore four of the main information compliance standards.
Health Insurance Portability and Accountability Act
Health Insurance Portability and Accountability Act (HIPAA), a significant U.S. legislation, serves as a protective shield for sensitive health information of patients and members of health plans. Its primary goal is to ensure that an individual’s protected health information (PHI) remains confidential and cannot be disclosed without their knowledge or explicit consent.
HIPAA compliance rules cover healthcare information for patients dealing with hospitals, insurers, or anyone involved in healthcare. This information must stay protected in databases, devices, servers, and during transmission. Modern compliant technology ensures secure usage, reducing reliance on older methods like encrypted email.
HIPAA compliance places specific obligations on healthcare organizations beyond mere protection. Alongside safeguarding patient privacy, HIPAA mandates measures to counter healthcare fraud. This is crucial for maintaining the integrity of healthcare systems. Moreover, the law emphasizes the need for timely and transparent communication with patients in case of security breaches involving their information.
By enforcing these requirements, HIPAA sets a standard reinforcing patient trust in the healthcare industry. It promotes responsible information management and aligns with the evolving landscape of digital health information.
Payment card industry data security standard
Payment Card Industry Data Security Standard (PCI DSS) compliance is about securing credit card payments. It ensures that your payment details are kept safe when you buy something. Unlike HIPAA, which focuses on healthcare data, PCI DSS protects payment information when you pay with a credit card. This includes card numbers, names, addresses, and more. While HIPAA is overseen by governments, PCI is created by big credit card companies like Visa, Mastercard, and American Express. They enforce it by punishing stores or payment processors that don’t follow the regulations. Penalties can be fines for each violation or even stopping a store’s ability to accept credit cards.
The PCI Security Standards Council (SSC) offers comprehensive standards and supporting resources to strengthen payment card information security. These contain specification frameworks, tools, measurements, and support materials that aid organizations in maintaining the security of cardholder information while transmitting the information. Central to the council’s efforts, the PCI DSS forms the foundation. It outlines the essential structure for creating comprehensive systems and procedures for safeguarding payment card data. This encompasses measures for prevention, detection, and response to security incidents.
General data protection regulation
General Data Protection Regulation (GDPR) is renowned as one of the world’s most stringent information privacy regulations. It has authority over the entire European Union and several other participating nations. GDPR mandates strict controls for user data by businesses. This encompasses reporting on proper information usage (restricted to genuine business needs), ensuring accessible avenues for users to access and delete their information, and obtaining documented consent whenever users request information. This requirement necessitates businesses to provide detailed justifications to customers for information collection, whether for analytics, recurring payments, email marketing, or other scenarios.
Organizations must implement “appropriate technical and organizational measures” to protect personal information. This entails employing suitable safeguards to prevent unauthorized access or breaches. GDPR places limitations on how information can be processed. It sets strict rules governing individual consent for information processing activities. Permission must be obtained to clearly understand how data will be used.
Under specific conditions, organizations must appoint a “Data Protection Officer (DPO)” who oversees data protection activities and ensures compliance. GDPR emphasizes individual rights to information privacy. This includes the right for individuals to access their own data held by organizations and the ability to request the deletion of their information when appropriate. These measures contribute to the comprehensive framework of GDPR compliance, aiming to uphold individual privacy and information security.
California Consumer Privacy Act
California Consumer Privacy Act (CCPA) draws several parallels with GDPR. Targeting California residents and entities operating within the state, CCPA outlines personal information as commonplace details like names, addresses, phone numbers, email addresses, and similar information. CCPA mandates that businesses establish mechanisms for consumers to opt-out, enabling them to halt engagement or stop the sale of their information to third parties.
A notable difference between GDPR and CCPA (as well as many U.S. regulations) lies in their approach. GDPR operates on an “opt-in” basis, necessitating companies to secure consent before any data-related activities. CCPA follows an “opt-out” framework, allowing businesses to use consumer information until instructed otherwise.
The CCPA allows California consumers the possibility to:
- Be informed about the information organizations possess about them
- Request the removal of their personal information
- Decline the accumulation and use of their personal information
- The CCPA further ensures that businesses cannot discriminate against consumers who enact their CCPA rights
How to ensure data compliance within your organization
Here are five effective practices you can implement now to ensure data compliance:
Know the legal landscape
To follow the law, you first need to know it. Stay informed on laws and security standards that apply to your industry, including all places you work or have customers. Stay focused on the rules that matter to your organization. Understand what you must do to meet them and stay informed and prepared.
Train your team
You can’t assume your staff knows all about data regulations without providing them with proper training. Train your team and refresh their knowledge of the legal and regulatory information compliance rules. Focus your training on data breaches and cybersecurity risks as well as how to prevent and report on these matters. Hackers often get access to information by tricking people. So, make sure your team knows how to protect against that.
Keep track of your data practices
How well an organization follows the regulations is shown by its evidence of following them. Make sure you can prove how you kept your information safe. Keep track of all your data practices. When new rules arise, update your policies and update your team again. Suitable proof and preparation keep your compliance strong.
Check vendors who can reach your data
When collaborating with vendors who access your company’s data, you must ensure they follow the same laws and rules as your organization. Assess the information security and protective measures of each vendor, especially with data access privileges.
Use new technologies
Modern technology is crucial in setting up information security compliance for your whole organization. It lets you check your data, find risks, and ensure you follow the rules. Using technology is a great way to identify gaps in your security and compliance that may have gone unnoticed.
Challenges of data compliance
Businesses navigate a complex network of regulations for data storage and processing. The consequences of failing to follow data requirements are steep, encompassing penalties like large fines based on global revenue, and, in severe cases, legal consequences such as imprisonment under federal regulations like HIPAA.
While businesses are driven to adhere to information security regulations, the journey could be more complex. A key hurdle lies in pinpointing data subject to compliance rules. Businesses must grasp information collection, storage locations, authorized access, and retention periods.
Beyond the technical complexities, businesses confront a shifting data compliance landscape. In 2023, California strengthened its data privacy regulations with the new updates to the California Privacy Rights Act (CPRA). Furthermore, states like Colorado, Connecticut, and Utah introduced new privacy laws slated for enforcement this year.
In today’s data-driven world, adhering to data compliance standards is essential. These guidelines provide a crucial framework for businesses to safeguard sensitive information and maintain customer trust. From healthcare to finance, diverse industries are bound by regulations that demand responsible information handling.
Organizations can navigate the complex landscape of data compliance by understanding the requirements, providing staff training, and using modern automation technology. Ensuring information security, protecting privacy, and upholding ethical practices are legal obligations and vital for preserving reputation and customer loyalty.
As regulations evolve, staying informed about changes and adapting practices is critical. The interconnected nature of our digital ecosystem calls for constant vigilance, as inadvertent breaches can occur. Commitment to data compliance is an investment in both long-term success and the well-being of individuals whose information we handle. By embracing these standards, businesses can thrive in a data-driven era while respecting individual rights and contributing to a more secure and trustworthy digital environment.