What is data compliance?

Regardless of an organization’s size, industry, or geographic location, almost every organization must pay attention to data compliance. Compliance requirements are pervasive and continuously being created and enforced by government, industry, and internal groups. It is imperative that organizations be aware of their responsibilities related to data compliance or risk serious penalties.

Definition of data compliance

Data compliance is the recognition of and adherence to laws, regulations, and industry and internal standards. Generally, references to data compliance are focused on digital data privacy and security.

To meet most data compliance requirements, organizations must implement technology, processes, and protocols to ensure data privacy, protection, and availability.

The primary objective is to prevent compromise, loss, misuse, or theft of data.

To meet data compliance requirements, many organizations use data governance systems to define policies and procedures for data handling, including collection, storage, and usage. This structure also helps streamline overall data management.

Several other reasons why data compliance is important from an individual data subject’s perspective is that the various laws, regulations, and standards:

1. Define how individuals’ information can be used.
2. Limit how long personal data can be stored.
3. Protect individuals’ privacy rights.
4. Set parameters for securing and proving an individual’s consent to collect, store, and use their personal information.

What are data compliance standards?

Data compliance standards are guidelines and frameworks that organizations can adopt and use to adhere to high digital security and privacy laws and rules. Following are four broadly applicable data compliance standards.

Control Objectives for Information and Related Technology (COBIT)

COBIT is a widely used data compliance framework created by the international organization Information Systems Audit and Control Association (ISACA). It is used to guide IT management, governance, and security related to data compliance.

ISO / IEC 27001

Developed jointly by the International Organization for Standardization and the International Electrotechnical Commission, ISO/IEC 27001 is a standard that details requirements for establishing, implementing, maintaining, and monitoring information security management systems to ensure that they provide optimal protection for digital assets. It is commonly used to support data compliance efforts.

NIST SP 800-53

Created by the National Institute of Standards and Technology (NIST, a nonregulatory agency of the U.S. Department of Commerce), NIST SP 800-53 was developed for government agencies, but is widely used by private sector organizations. NIST 800-53 provides standards and a framework for Assessing Security and Privacy Controls in Information Systems and Organizations and is broadly used to ensure data compliance.

Payment Card Industry Digital Security Standard (PCI DSS)

PCI DSS was created by five major credit card companies—American Express, Discover, JCB, Mastercard, and Visa—who make up the Payment Card Industry Security Standards Council (PCI SSC). The PCI DSS data compliance standard details policies and procedures to protect sensitive data and minimize fraud risk related to payment card information.

Why data compliance is important

Investments in data compliance have many practical benefits beyond avoiding penalties for non-compliance. At a high level, these benefits include:

1. Demonstrates an organization’s commitment to ethical data practices
2. Drives profitability by helping to cultivate and protect quality data
3. Ensures their data is not only safe and secure, but also up-to-date, accurate, and accessible
4. Fosters customer loyalty by showing that the organization prioritizes consumers’ privacy and data security
5. Helps organizations increase efficiency by eliminating time wasted on data errors and inconsistencies
6. Increases employee satisfaction with the organization by reinforcing its commitment to protecting sensitive information
7. Keeps organizations on top of evolving regulations
8. Minimizes downstream errors caused by erroneous or compromised data due to tampering or errors
9. Reduces the amount of time and money spent identifying and correcting data quality issues in the wake of an unfavorable audit
10. Streamlines audit processes

A deeper look into data compliance benefits reinforces its importance.

Avoids non-compliance consequences

Failure to meet data compliance requirements brings with it a host of negative consequences. These include fines and penalties that can impede operations and damage brand reputation.

Encourages the implementation of systems and process that improve data management

The requirements for many data compliance regulations and laws veritably mandate quality data management processes. For instance, some dictate that organizations establish and follow rules for data collection, retention, and disposal as well as its accessibility, which requires following best practices for data storage, organization, and management.

Fosters and reinforces brand loyalty

Data compliance builds customers’, partners’, and peers’ trust and loyalty in an organization. With the rising numbers of data breaches and other cyber incidents, a strong data compliance program shows that the organization takes how it handles data seriously, prioritizing proper usage and protection. Failure to do this results in a loss of customers’ trust.

In the wake of a data breach, organizations see customers leaving and moving to an organization that is perceived to be better equipped to protect their personal information.

Helps attract and retain quality employees

Top-notch employees want to be part of an organization that is considered a leader in its category. An integral part of that is staying ahead of cyber attacks, especially highly visible and damaging data breaches. Another is demonstrating a commitment to showing respect for the privacy and security of individuals’ sensitive data by giving it the proper protections.

Enhances data protection

To meet most data compliance requirements, organizations must implement a range of solutions, protocols, and processes to ensure data security. These commonly drive organizations to seek out and follow best practices for data privacy and security. The result is that overall data protection is enhanced.

Data compliance vs data security compliance

The impact of data compliance on the enterprise

Data compliance is mandatory for almost every enterprise. It is critical that these organizations comply with data compliance requirements not just to avoid penalties, but to protect their digital assets.

Maintaining data security and privacy is of paramount importance to every aspect of enterprise operations and to maintaining the integrity of the organization’s reputation. Without data compliance, enterprises risk data loss, theft, unauthorized access, and other compromises to data assets’ integrity, availability, and usability.

Data compliance and regulations

Data compliance laws and regulations are in place to protect customers’ right to data privacy, security, accuracy, and accessibility. All of these regulations and laws include specific requirements for security and privacy measures that must be implemented. Those that are common across most data compliance directives are:

1. Audit logs must be maintained to document how information is used, shared, and stored.
2. Data confidentiality, integrity, and accessibility must be maintained.
3. Details about data breaches must be shared with authorities and all affected users.
4. Encryption must be used to protect sensitive data., including information in emails and other communications.
5. Users’ data may not be collected or handled without their expressed permission.

The following are several of the major laws and regulations that drive the need for data compliance programs.

Federal laws

1. Federal Information Security Management Act (FISMA)
2. Federal Trade Commission (FTC) Act
3. Gramm-Leach-Bliley (GLB) Act
4. Health Insurance Portability and Accountability Act (HIPAA)
5. Sarbanes-Oxley Act (SOX)

International laws

1. Asia-Pacific Economic Cooperation (APEC) Privacy Framework
2. European Union (EU) ePrivacy Directive
3. General Data Protection Regulation (GDPR)
4. International Association of Privacy Professionals (IAPP) Privacy by Design Personal Data
5. Organization of Economic Cooperation and Development (OECD) Guidelines for the Protection of Personal Data

Privacy laws

1. California Consumer Privacy Act (CCPA)
2. Colorado Privacy Act (CPA)
3. The Privacy Act of 1974
4. Utah Consumer Privacy Act (UCPA)
5. Virginia Consumer Data Protection Act (CDPA)

Regulations

• Federal Risk and Authorization Management Program (FedRAMP)
• FedRAMP provides standardized guidelines to help federal agencies and the private sector evaluate cyber threats and risks to data within technology infrastructure platforms.

Data compliance methods and tools

The best data compliance methods adhere to proven best practices. The following are a few of the widely followed best practices for data compliance.

1. Conduct data security reviews and audits regularly to identify vulnerabilities.
2. Create protocols and procedures for data collection, storage, and usage.
3. Develop, implement, and enforce policies for data collection, storage, and maintenance.
4. Document the organization’s data management practices.
5. Educate users on how to handle data and the importance of data privacy and security.
6. Know the types of data that identify the types of data your company is collecting and using.
7. Use robust data protection tools for access control, encryption, data backup, and disaster recovery plans.
8. Vet any vendors with access to the organization’s data and continue monitoring them.

There are a number of tools that can be employed to ensure that data compliance requirements are met. Different organizations use some selection of these based on their needs.

The following are examples of the types of tools that are used for data compliance:

Compliance auditing solutions, such as:

1. Compliance management systems
2. Consent management software
3. Data subject access requests (DSAR) solutions
4. Governance, risk, and compliance (GRC) solutions

Data security and privacy solutions, such as:

1. Access controls
2. Anti-malware software
3. Anti-virus software
4. Authentication
5. Backup and recovery systems
6. Data discovery and classification tools
7. Data loss prevention (DLP) solutions
8. Employee monitoring systems
9. Encryption
10. Firewalls
11. Incident response
12. Intrusion detection systems (IDS)
13. Intrusion prevention systems (IPS)
14. Network monitoring
15. Security information and event management (SIEM) solutions
16. User and entity behavior analytics (UEBA) solutions

Data compliance FAQ

What is a data compliance program?

A data compliance program is a combination of people, processes, and technology to help organizations meet the data security, privacy, and availability requirements of laws, regulations, and industry and internal standards by preventing compromise, loss, misuse, or theft of data.

What are common data compliance challenges?

The following are several commonly cited data compliance challenges:

1. Balancing data compliance security requirements with the need to make information accessible to distributed users
2. Ensuring that a rapidly growing volume of information has requisite data protection and rules are followed related to collection, storage, management, and usage
3. Keeping on top of and providing protection against increasingly sophisticated cybersecurity threats
4. Tracking and responding to continuously evolving requirements
5. Understanding which data compliance rules are applicable

Why do organizations need a data compliance program?

Among the many reasons that organizations should develop and implement a data compliance program are:

1. Bolsters an organization’s reputation as one that prioritizes protecting sensitive information
2. Eliminates lost productivity due to resources being diverted to correct data errors and inconsistencies
3. Enhances data quality
4. Facilitates and expedites audit processes
5. Guides the implementation of technical and administrative data protection measures
6. Helps organizations keep track of evolving regulatory requirements
7. Improves data management and data security
8. Keeps data accurate and accessible
9. Reduces the risk of non-compliance

What is a data compliance framework?

A data compliance framework provides direction on how an organization can meet the requirements for various laws and regulations. It includes guidance on specific technology that should be used to adhere to compliance directives.

Among the technical elements commonly included in a data compliance framework are:

1. Access control
2. Authentication
3. Encryption
4. Incident response
5. Monitoring
6. Perimeter defense
7. Risk management

Data compliance is an ongoing effort

Meeting data compliance requirements is not a one-and-done exercise. It must be an ongoing endeavor that is considered a priority at all levels of an organization. This requires taking a holistic view of data compliance and establishing procedures and policies that drive data compliance into data handling across all functional areas.

While it is complex and can be expansive, there are a number of tools available to facilitate data compliance. Investments in supporting technologies help organizations ensure that they are meeting requirements, increase the adoption of related policies, and streamline impacted operations.

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