A Guide to Data Security Compliance Laws and Regulations
As web-based technologies advance, so too do compliance regulations and laws evolve in the ever-changing data space, with new standards seemingly being introduced each year. As a result, remaining compliant with industry and government regulations is as challenging as it is essential for the survival of any entrepreneurial endeavor. Fortunately, adopting the right practices doesn’t always have to be a colossal undertaking.
This guide will discuss some of the most widely applicable and significant compliance laws and regulations in data security. While it isn’t a comprehensive or exhaustive list by any stretch, it does cover essential rules to adhere to so you can remain as compliant as possible.
Importance of Data Compliance
Before we delve into data use laws and compliance, we must first understand what it is and why it’s important. As its name suggests, it refers to regulations and standards governing the way organizations, both business and government, keep data private, safe, and secure against damage from breaches. While it’s usually associated with consumer information, it also covers employees’ financial records and personal data. Companies are compliant if they follow standards and laws on managing, storing, and transmitting data.
Compliance regulations don’t just exist to help organizations steer clear of costly fines. They’re created to protect businesses, employees, and consumers through practices that ensure data security. Moreover, businesses that adhere to compliance laws don’t just operate legally but also have more streamlined frameworks for data management that elevates their profitability and efficiency.
Compliance Regulation Limitations
Compliance regulations are designed primarily to help guide businesses in properly storing and protecting data, but they aren’t without limits. Some organizations make a mistake by thinking that they’re secure because they follow compliance laws. The reality is that the laws cannot account for every intricacy of all organizations. For example, it’s possible to be compliant but have vulnerabilities in the data access system and controls that keep the business and its customers exposed to potential breaches.
Common laws in compliance
Now that you understand what data compliance is let’s look into the common regulations organizations must follow to ensure that they stay compliant.
The GDPR, or General Data Protection Regulation, was signed into law by the EU or European Union in 2018, detailing standards by which all organizations should handle the personal data of their residents. While it primarily applies to companies within Europe, it also affects many organizations in the United States. For example, it requires enterprises to ensure that personal information is processed in a way that protects against unauthorized collection, destruction, damage, or loss. And the fines imposed for compliance failure can be as much as four percent of a company’s annual revenue.
The TCPA, or Telephone Consumer Protection Act, mainly refers to the federal law that governs telephone solicitation regulation. While primarily associated with telemarketing issues, it also safeguards consumers’ privacy and data. More often than not, penalties are evaluated on an individual violation basis. However, the penalties can accumulate because they can be combined with uncapped statutory damages. For this reason, it’s imperative for any outbound telemarketing business to maintain TCPA compliance at all times.
A well-known compliance law in the healthcare sector, HIPAA or the Health Insurance Portability and Accountability Act, necessitates medical practitioners and organizations to maintain the confidentiality and security of their patients’ digital information when transmitted or stored. In addition, it mandates them to make a reasonable effort to protect health data against misuse, security breaches, and other threats. Failure to comply can result in steep fines. In some cases, it may even lead to prison time.
The CCPA, or California Consumer Privacy Act, generally applies to companies whose revenue is at or beyond twenty-five million dollars or whose possess data on fifty thousand individuals at least. In this act, California residents are given the right to view any data businesses have saved on them and third parties who may have received the information. If organizations are in violation, consumers can sue them. It’s also worth noting that it applies to consumers located in California, but it can also affect companies outside of the state.
CPRA, or California Privacy Rights Act, is the previously mentioned CCPA’s evolution that may come into effect sometime in 2023. It expands on the abovementioned policy and makes specific aspects stricter while removing smaller businesses from the jurisdiction. Some of the changes it imposes include keeping organizations from retaining consumers’ data much longer than necessary and expanding customers’ rights to keep their information from being collected, to cite a couple of examples.
FISMA, or Federal Information Security Management Act, is a 2002 policy that impacts every federal agency, service provider, sub-contractor, and all entities operating any IT infrastructure for federal organizations. It requires them to categorize stored data based on the impact it may have in case they’re compromised. In addition, they must regularly conduct risk assessments so that the risks remain acceptable.
The Sarbanes-Oxley or SOX Act enforced reliable and accurate corporate disclosure of public companies and organizations to protect investors, consumers, and the public. It was enacted primarily in response to scandals that occurred in the 2000s, such as WorldCom and Enron. All public companies, including accounting and management firms, must follow the regulations it outlines or face severe consequences.
8. PCI DSS
PCI DSS, or Payment Card Industry Data Security Standard, affects organizations that handle the transmission, storage, or processing of details regarding credit card information and is designed to safeguard data stored in electronic and paper records. Companies following this policy need to build secure networks, implement specific access controls, and ensure that their systems are regularly tested.
Tips to Comply with Regulations in Data Security
Improving your practices in data compliance isn’t rocket science. It all begins with properly understanding the compliance regulations impacting your organization. Here are some tips to help you comply much better.
- Understand the data you handle. Compliance regulations often depend on the type of data the organization handles daily. For example, if you deal with the records of patients, you will likely have to follow HIPAA laws. Likewise, if you store or process credit card details, you may have to adhere to PCI DSS regulations.
- Develop a compliance plan. Compliance with data security will only be possible if a plan outlines how to maintain or reach your goals. For this reason, it’s best to start by planning it out. Don’t be afraid to partner with third-party platforms for data security if needed. It will make a difference.
- Regular assessments are key. Lastly, performing regular assessments is critical to maintaining compliance. After all, it’s relatively common for new laws to emerge, goalposts to shift, and data standards to change. And only through constant assessments can you keep up with it.
Compliance with data regulations and laws is crucial in business, especially in today’s digital age, as even the most minor infractions can lead to considerable losses. For this reason, you must always adhere to both industry and government standards to ensure that your business survives and succeeds.
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