Why Data Compliance Is Hyper Important
If you handle other people’s data and information, even if it’s just an email address, then data compliance affects you — whether you are running a small business or a large business. How you store, secure, and protect that data is hyper-important. Every client, customer, employee, and supplier that comes into contact with your business brings an abundance of PII ( personally identifiable information): a category of sensitive information. It’s your responsibility to safeguard that data in compliance with local, state, and federal regulations.
What Is Data Compliance?
If you work with personal and sensitive data — such as data related to medical, finance, legal, insurance, or other personally identifiable information — then you have a responsibility to protect it.
Compliance involves not only the privacy of personal data but how that data is stored and secured. In some cases, how you protect that data may be regulated by government agencies (medical data) or industry regulations (legal data). Even if you’re not required to answer to anyone outside of your business about how the data is used, there are things you must do when it comes to data compliance.
There is a never-ending list of laws and regulations businesses need to abide by. Today, data protection should be a priority for anyone working in the compliance space. There’s an increasing number of information security and privacy regulations and standards that businesses must abide by to do business with their customers, clients, patients, etc. Given the rapid increase in cyber threats and attacks, these data protection compliance standards are being updated more frequently.
It can be challenging and time-intensive to ensure that each standard is met. The good news is there are strategies your business can implement to ensure you meet all of the standards and regulations you’re liable for.
Why Is Data Compliance Important?
Based on the latest data breach track record, we have seen major players like Facebook, Amazon, Cisco, Apple, and eBay getting an up-close look at what it means to fail in data compliance. However, these companies are not exactly bad actors. They are the companies that we are all familiar with and have grown to trust. We’re not saying they are perfect, but their objective is to be innovative and dominant in their industry and not put people in harm’s way.
These well-known companies breached data protection laws, and it was not because they are malicious and enjoy putting people’s information in harm’s way. They were breached because they are giants in their respective industries and did not implement policies quickly enough to meet legal and regulatory requirements, or maybe they were breached because they believed that paying the fines and penalties is cheaper than implementing a robust defensive strategy.
What about the businesses that have employed people who show up to work with malicious intent? What about the employees who want to misuse sensitive data and steal information? These are the times when data compliance must work closely with data security. To achieve data compliance, businesses must take every opportunity to review their processes, technologies, and systems to ensure they implement the necessary security measures.
With evidence that data breach costs rose from $3.86 million to $4.24 million per business, there’s a bright light shining directly on data compliance. According to IBM, each data record that’s compromised costs a business $161 in lost revenue, an increase from $146 per lost or stolen record in the 2020 report. Can your business afford to ignore the importance of data compliance?
It’s one thing to only attempt to achieve the lowest level of compliance, but it’s another thing to actually safely store and secure data. Data compliance is hyper-important because it forces businesses to adapt to the changing times.
Businesses That Fail to Comply Expose Themselves to Major Risks
One of the obvious motivations for placing more attention on data compliance is that failing to do so creates a variety of risks to the entire business. These risks are not just financial, but reputational. In some cases, these risks can signal the end of your business.
With the possibility of being hit with huge fines and penalties, it’s vital to stay on top of data compliance. According to the findings in IBM’s Cost of a Data Breach Report 2021, the average cost of a data breach for organizations with a high level of non-compliance is $5.65 million, compared to $3.35 million for organizations with a low level of compliance failures (a difference of $2.3 million).
A Reputation Is at Stake
Unfortunately, many businesses have found out the hard way just how much damage non-compliance can do. The damage caused by high-level compliance failures can be irreparable and can quickly shine a negative light on the business and its reputation, regardless of the actions the business takes moving forward.
Consumers want to trust the companies that use their personal data. Failing to comply properly can result in customers and clients leaving in waves, and hurt your customer retention.
Data Compliance Presents an Opportunity to Be a Better Business
The majority of today’s consumers are aware of the risks that come with sharing their information online and they are concerned about how their data is used. Businesses must be aware of these concerns and they must take these concerns seriously. Businesses that fail to do so will have to face the consequences.
Businesses that get data compliance right can have a positive effect on consumer loyalty and win more business by setting up clear differentiating factors. Recently, Apple advanced its tech leadership by taking a new approach to consumer privacy, which caused the privacy war between Apple and Facebook to heat up.
Improving your data security and compliance can have a massive effect on how new and existing customers/clients perceive you. For some of today’s businesses, data compliance is viewed as an experimental issue. Many businesses are still relying on outdated servers, networks, and systems to alert them of data breaches. With increased scrutiny on businesses that use data, your business must develop a data compliance strategy that will reduce its risks.
tech42 LLC will ensure your business has a powerful data compliance strategy so you can provide value for your customers, clients, employees, and more. Are you ready to turn data compliance into a reassessment of how your business approaches data management? Contact us today for more information on the importance of data compliance and how we help businesses ensure they stay onsite with data compliance.
Thanks to our friends at DataEcon in Dallas for their assistance with this content.