An Introduction to
Data Compliance

What Is Data Compliance?

Data compliance is the practice of ensuring that sensitive and protected data is organized and managed in a way that enables organizations and government entities to meet relevant legal and government regulations. In many ways, you can think of data compliance as a set of detailed rules (often called protocols, standards, or requirements) that are designed to safeguard personal data and information.

Data compliance requirements vary depending on the regulation, but, generally, most define (1) how data is collected, used, and stored, and (2) the processes organizations should adopt to ensure the data is protected against loss, theft, and misuse.

Why Do Businesses Need Data Compliance?

From sending instant messages and emails to using word processing, spreadsheets, and an endless number of other types of digital data, creating and using digital information is ubiquitous with the way we work today. This seismic shift to organizations digitally storing customer information, credit card numbers, and other financial details along with the mass move to ecommerce and transacting online has created the need for oversight on how organizations are handling and protecting their data.

Ultimately, when a customer gives their personally identifiable information (PII) as part of a transaction, it comes with a responsibility for the organization to safeguard that information and ensure it doesn’t fall into the wrong hands like those of cybercriminals. When organizations adhere to data compliance requirements, it enables several benefits:

Prevents Data Breaches

Data compliance ensures that organizations are applying good security practices to keep the company’s data safe and to protect it against a breach. It’s an essential business practice and demonstrates that an organization is a good steward that acts responsibly in handling confidential and customer data.

Improves and Streamlines Data Management

Data management is the process of ingesting, storing, organizing, and maintaining the data created and collected by an organization. Effective data management is a crucial part of meeting data regulatory requirements, and it not only supports the compliance effort but also improves the company’s data handling processes throughout the data lifecycle — from creation to destruction.

Builds Brand Loyalty

Today’s organizations operate in highly competitive markets, which means consumers also have a lot of options in brand choice. When organizations demonstrate to customers that they apply good practices for following data compliance requirements, they can improve the trust in their brand, which, in turn, leads to higher customer retention rates.

Attracts Quality Employees

A company’s compliance attestations and certifications are a testament that the organization takes data compliance seriously, and they’re also an indicator that the company applies thoughtful practices for its data management and other operations. These are attractive factors for job applicants and can weigh favorably in helping an organization attract and retain top-performing employees.

Data Compliance Regulations and Standards

We are living in a data economy, so it’s more important than ever for organizations to have a full grasp on their data universe and adhere to the compliance requirements that apply to their business. The following are some of the notable examples of laws and regulations that have been put in place to protect data:

NIST Cybersecurity Framework

The NIST Cybersecurity Framework is a set of guidelines and best practices to help organizations build and improve their cybersecurity posture to safeguard their data and prevent a data breach. Published by the National Institute of Standards and Technology (NIST), the framework is widely considered the gold standard for building a cybersecurity program, whether an organization is just getting started or they’re advancing in security maturity. The NIST framework categorizes all cybersecurity capabilities into five core functions, including:

• Identify — determine the processes and assets that need protection
• Protect — implement appropriate safeguards to protect the organization’s assets
• Detect — implement appropriate mechanisms to identify a cyber incident
• Respond — adopt techniques to contain the impact of a cybersecurity event
• Recover — implement appropriate activities to maintain plans for resilience and restore any capabilities or services that were impaired due to a cybersecurity incident

ISO/IEC 27001

Originally published in 2005, ISO/IEC 27001 is an international standard that provides companies with guidance for establishing, implementing, maintaining and continually improving an information security management system. Conformity with ISO/IEC 27001 means that an organization has put a system in place to manage risks related to the security of data owned or handled by the company, and that this system applies all the best practices and principles included in the international standard.

PCI DSS

The Payment Card Industry Data Security Standard (PCI DSS) is a set of security standards that were formed in 2004 to better control cardholder data and reduce credit card fraud. Any company that processes, accepts, transmits, or stores payment card information must adhere to the PCI DSS requirements.

GDPR

Originally published in 2016 and enacted in 2018, the goal of the General Data Protection Regulation (GDPR) is to protect all European Union (EU) citizens from data and privacy breaches by harmonizing data privacy laws across all EU member states. If a business (located anywhere in the world) handles the personal data of EU residents, they are subject to comply with GDPR requirements.

CCPA

The California Consumer Privacy Act (CCPA) was introduced in 2018 to allow any California consumer to demand to see all the information a company has saved on them, as well as a full list of all the third parties with whom that data is shared. Any company with at least $25 million in annual revenue that serves California residents must comply with the CCPA. In addition, companies should be aware that the CCPA allows consumers to sue a company if the privacy guidelines are violated, even if there is no breach.

FedRAMP

The Federal Risk and Authorization Management Program (FedRAMP) is a U.S. federal government-wide program that provides agencies with a standardized approach to security assessment, authorization and continuous monitoring for cloud products and services. It helps the government rapidly adapt from old, insecure legacy IT to mission-enabling, secure, and easily deployed cloud-based solutions.

How to Ensure Data Compliance for Your Organization

To ensure data compliance, organizations first need to understand which regulations apply to their business so they’re adhering to the right ones. With an understanding of the relevant data compliance mandates, organizations should then establish the appropriate data protection measures, policies, protocols, and processes to meet the standards. That’s a considerable undertaking, so securing finance and senior management support for the data compliance activities is a crucial part of this approach.

Since data compliance is an effort that’s central to the company’s day-to-day operations, it’s important to have a dedicated point person who is in charge of managing all the moving parts. A critical part of this person’s role will be establishing continuous data compliance activities, scheduling regular tests, reviews of the documentation, and audits of the operations, as well as periodically updating senior management on the various compliance initiatives.

It’s fairly common for compliance regulations to include periodic audits where the organization must demonstrate that they’re following the most up-to-date requirements. An independent third-party auditor will typically work through this process with the organization to validate data compliance. To successfully navigate these audits, it’s essential to keep a record of all the organization’s data protection measures, which provides the auditor with evidence of the organization’s good-faith efforts to comply with each set of regulations.

Indicators of Data Compliance Success

Certainly, passing a compliance audit is a barometer that a company’s compliance program is working well. But outside of audit cycles, how do organizations know if their data compliance program is successful? Here are a few factors that you’ll find in a successful program:

Assigned Ownership and Resources

A data compliance program will have a much better chance of success when the organization has clearly defined an owner and established the roles and responsibilities of all those involved. Accountability for working with the data must be assigned to roles in the organization, so it is often convenient to designate “data owners” (typically from business groups rather than technical teams) who should help assure that they are able to meet the compliance responsibilities.

Maintained Documentation

Companies should maintain updated documentation of their data compliance program that covers each stage of the data management operations, and the documents should be accessible and verifiable through uncompromised reports. Because businesses are never stagnant and regulations are often updated, an organization’s data compliance program should undergo evaluations regularly so that any required modifications can be made right away.

Well-Managed Data Lifecycle

Good policies for managing the data lifecycle will ensure a company can answer important questions in support of their successful data compliance program, such as:

• When is data no longer useful?
• When does the cost of storing the data outweigh the benefit it provides?
• When are we collecting more data than we can use to our advantage?
• What are the factors for when data is at the end of its lifecycle and can be destroyed?

Established Success Metrics

When an organization has key performance indicators (KPIs) for their compliance program it serves as a helpful North Star for tracking the program’s success. KPIs also help an organization identify the program’s strengths and weaknesses. The most important KPIs are those that track directly to the organization’s program’s goals, which also means companies first need to have a baseline of goals in order to measure compliance effectiveness.

Key Challenges of Data Compliance

The ever-changing regulatory environment has created an increasingly complex compliance labyrinth for organizations to navigate. Yet, noncompliance can lead to steep fines, as well as result in business operations that are unable to protect data or perform with agility when an incident occurs.

Adding to the mix of challenges, organizations’ compliance efforts must navigate the new normal of hybrid work environments, exponentially growing data volumes, expanding tech stacks, resource limitations, and budget concerns that often leave risk and compliance teams overtaxed and understaffed.

Skills and Resource Shortage

Having knowledgeable staff with strong data compliance and security expertise continues to present challenges. The shortage of resources and skills makes compliance readiness difficult when organizations need to navigate the operational complexities of attracting candidates to fill open positions.

Exponential Growth in Data Volumes

The rise of digital business generates more and more data that must be included in an organization’s data compliance efforts. According to Statistica, the enterprise data volume grew from approximately one petabyte (PB) to 2.02 petabytes from 2020 to 2022.1 At that pace, it can become an overwhelming challenge for data compliance teams to keep pace.

Hybrid Work and Expanding Attack Surface

With organizations facing an expanded attack surface through cloud adoption and employees moving to remote working models, it is increasingly difficult to inventory what and where all the organization’s data resides in order to bring into the data compliance fold.

Technology Advancements

The advancements in business-enabling technologies have created an ever-changing digital environment for compliance and security teams to manage and protect. Companies have adopted video collaboration platforms, joined the social media revolution, signed on for anything-as-a-service, and outfitted their employees with smart phones — just to name a few of the endless innovations that organizations must include in their data compliance program.