Data compliance has become a major talking point over the past few years. With the rise in cloud computing and the shift to work-from-anywhere environments, following data regulation and compliance standards is a top priority for businesses across all industries. And when companies are losing an average of $4 million in revenue due to a single non-compliance event,1 it’s no wonder why data compliance is such a hot topic.
Despite the importance of data security and compliance, nearly 73% of organizations find managing third-party permissions from cloud platforms and remote network access overwhelming for their team.2 Many companies are turning to managed IT service providers to ensure their network remains secure — without having to put a massive strain on their internal resources.
This guide will explain what data compliance is, why it’s important for companies to adhere to, and a few steps you can start taking today to ensure your business is compliant.
What Is Data Compliance?
Data compliance refers to following governmental regulations and protocols for collecting, using, and handling sensitive data. Many view data compliance and security as interchangeable, but this isn’t the case. While the two terms are closely linked, being compliant doesn’t ensure a business is secure, and vice versa. Learn more about the differences between security and data compliance and why both are essential for organizations in this blog.
The regulations surrounding data compliance vary across different industries, states, and countries, but they typically address:
- The types of data that businesses must protect.
- The processes that are necessary to protect this data.
- The penalties an organization will incur if it is not compliant with these processes.
Why Is Data Compliance Important?
Taking data security and compliance seriously benefits your business in several ways. Aside from maintaining a reputation as a company customers can trust, avoiding data breaches and non-compliance fines can save you millions in lost revenue. Let’s explore the benefits of adhering to data regulation and compliance standards in more detail:
Data Protection
Data compliance regulations force organizations to improve their data security practices. By complying with these regulations, you confirm that your company has the necessary systems to minimize the risk of data breaches exposing or stealing your customers’ sensitive information.
Cost Savings
Remote work directly impacts losses incurred from a data breach, with the average total cost of a breach reaching more than $1 million higher when remote employees were a factor in causing the breach.3 With so much to lose from a single data breach – in addition to the regulatory fines and lawsuit fees you may face – ensuring your network is compliant and secure at all times is essential.
Customer Trust and Reputation
Customer trust is essential for any business, and earning it back is difficult if lost due to a significant data breach. Up to 80% of customers will defect from a company that has compromised their data,4 but compliant businesses appear more trustworthy and reputable to their customers.
Streamlined Data Management
Establishing and documenting data security processes, such as how to handle sensitive data and respond to incidents, helps your company streamline data management and stay resilient if something unexpected happens.
Data Compliance Standards for Businesses
While there are many data compliance standards in practice, here are some of the most prevalent for businesses today:
Health Insurance Portability and Accountability Act (HIPAA) - Governs how healthcare providers, insurance companies, pharmacies, and other organizations that collect personal medical information handle this data. HIPAA compliance gives patients more control over how businesses use their health information.
General Data Protection Regulation (GDPR) - A framework regulating how personal information from people living within the European Union is collected and handled. GDPR compliance applies to all organizations that collect data from EU citizens, whether or not the company is based in the EU, and imposes severe fines for violating these regulations.
National Institute of Standards & Technology (NIST) - Guidelines that help ensure sensitive consumer data is kept secure. Although it’s not a legal requirement, proving your organization follows NIST standards demonstrates that you can protect confidential data from the latest cyber security threats.
Payment Card Industry Data Security Standard (PCI DSS) - Regulates security guidelines for organizations that process, collect, or transmit credit card information. Any company that handles credit card data must be PCI compliant.
California Consumer Privacy Act (CCPA) - Outlines privacy rights for California-based customers, including the right to know how businesses are using their information and opt-out of the sale of their data. CCPA compliance applies to any company that:
- Makes at least $25 million in revenue and serves California residents.
- Stores personal data on at least 50,000 people.
- Collects over half of their revenue from selling personal data.
Federal Risk and Authorization Management Program (FedRAMP) - A set of privacy and security requirements for organizations that store or process data for federal agencies in the cloud. These guidelines help evaluate the risk of the cloud services in use.
Sarbanes-Oxley Act (SOX) - A law that protects employees, shareholders, and customers from corporate fraud with auditing and financial regulations. All publicly traded companies within the U.S. and foreign companies that are publicly traded and do business within the U.S. must adhere to SOX compliance.
Steps for Complying With Data Security Regulations
Now that you know how crucial complying with data security standards is, it’s time to improve your data compliance practices. Below are a few steps you can take to ensure your business is on the path to compliance:
Know Your Data
Understanding the data you work with is key to determining which compliance laws apply to you and your organization. The types of data you collect and handle, such as patient health records, credit card data, or other sensitive information, will help you determine which data security laws and standards you must follow.
Implement a Compliance Plan
Every company should have a comprehensive plan that outlines its compliance requirements and how to follow those regulations. In some cases, organizations partner with a network security expert like Xceptional to help achieve and maintain data compliance with solutions like compliance as a service. Learn how compliance as a service benefits businesses like yours in the ebook below.
Assess Your Data Regularly
Once your organization achieves data compliance, the work isn’t over. As technology evolves, consumer data standards change, and new regulations take effect. Performing regular data assessments will help identify any areas your business needs to improve data compliance and optimize its data security practices.
Train Your Employees
For your data compliance plan to be successful, everyone in your company – from top to bottom – must understand the importance of following data security processes. Train your team on data security best practices and company-wide policies on data compliance, and regularly reinforce this training throughout the year.
Xceptional Is Your Expert Data Security Partner
Compliance is a straightforward concept, but the challenge for many organizations is accounting for the many factors that comprise a successful data compliance plan. Additionally, compliance regulations have their limits. Your company may not be secure simply because it’s compliant, and compliance laws can’t account for the intricacies across different industries and businesses.
One way to ensure your organization remains both compliant and secure is to work with an expert in network security. Xceptional’s Network Security services deliver 24/7 monitoring, automatic patching, regular updates, and more to keep your network and customer data protected at all times. Contact us today to learn more about what Xceptional security can do for you, and experience Xceptional value!
Sources: