What is Data Compliance? Why it Matters for Businesses

Organisations and businesses today hold more personal data than ever before. It is not only ethical for them to look after this sensitive data responsibly, but also their legal obligation. There can be harsh penalties for those that breach data protection laws, including financial repercussions and even prison sentences.

When you hear the term data compliance, it might sound daunting, but it’s very important for businesses to understand, as the consequences for not being compliant can be severe.

So, what is data compliance?

Data compliance is the practice of adhering to formal standards and regulations for the protection, security and storage of personal or sensitive data. This is information that includes personal details of the public, customers, clients and employees. Common data compliance standards include GDPR and the Data Protection Act.

This article explains everything you need to know about data compliance. From key standards and laws, to best data compliance practices.

The importance of data compliance

Being data compliant is highly important to an organisation’s reputation. Businesses have a legal obligation to protect the information they have collected to ensure the confidentiality and integrity of the data. Companies need to follow security standards and practices to make sure sensitive information is protected from things like accidental loss, theft, and fraudulent activity.

Following correct data protection practices is vital to reduce the chance of cybercrime. By making sure personal information such as banking, addresses and contact details are kept secure, this can help to prevent fraud.

Those that are found to have put data at risk can completely lose their customers’ trust, which is disastrous for any organisation, especially when it has likely taken years to build and develop these relationships in the first place.

Failing to comply with data protection can result in legal action, which can include financial penalties and even the potential of a prison sentence.

Data compliance and GDPR

GDPR stands for General Data Protection Regulation. It was introduced to the UK in 2018 through the Data Protection Act. This statutory legislation controls how organisations, businesses and even the government can use someone’s personal information.

The intent of GDPR is to essentially establish and maintain trust with consumers. This gives individuals more rights as to how their data is used by organisations and businesses. Consent is required when sending electronic marketing unless there is another legal basis. For example, consumers usually need to have opted in before you can send them any email marketing.

There are six lawful grounds for processing personal data that need to be followed. They are consent, contractual requirements, vital interests, legal requirements, public interest, and legitimate interest. Which one you should use depends on the personal data and the purpose for it being processed.

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How do you ensure data compliance?

Rules around data compliance differ based on industries, governments, countries and entire continents. What type of data needs to be protected? Personal data that organisations and businesses might store include:

• Names
• Addresses
• Emails
• Phone numbers
• Bank and credit card details
• Medical details

Sensitive information is included in this data that could relate to customers and the general public, employees and their families or next of kin, business partners and clients.

You must keep this information secure in accordance with GDPR.

What processes need to be in place to protect data?

Everyone accountable for using personal data must adhere to strict rules known as ‘data protection principles’. These rules ensure information is used in a transparent way that is both fair and lawful. The data should only be kept for as long as it’s needed.

Businesses have a duty to make sure the information is correct and it should be confirmed with the respective party whether it is a customer or an employee.

If your business uses any third-party communication services or software to store customer or client information, you must adhere to data protection guidelines.

What is the right to erasure?

Everyone has the right to have their personal data erased from an organisation's database. This is known as ‘the right to be forgotten’. A request for erasure can be made either verbally or in writing and you have have one month to respond to this. UK GDPR makes it an organisation’s responsibility to consider deleting any personal data that has been collected.

What is the penalty for breaching data protection standards?

The Data Protection Act 2018 is legislation within the UK and must be complied with. It embodies the European Union’s GDPR. The Information Commissioner’s Office (ICO) is the UK’s data protection watchdog which is responsible for enforcing penalties on organisations that are not compliant. Actions they can take include:

• Sending warnings
• Imposing temporary or permanent bans on data processing
• Ordering restriction or erasure of data
• Issuing potential fines of up to £17.5 million or 4% of annual global turnover, whichever is greater

There is even the possibility of a prison sentence if found guilty.

How are GDPR fines calculated?

The amount of a GDPR fine is imposed by the ICO based on how serious the offence is. They are issued based on a case-by-case basis and should be “effective, proportionate and dissuasive”. The fine will depend on:

• The type of infringement, severity and duration of it
• If it was deliberate or accidental
• Actions taken to lessen damage to individuals
• Security measures that were in place
• Whether this is a first GDPR violation or repeat offence
• How cooperative they are with ICO and if they notified first
• What data was compromised

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Adhering to GDPR is a legal requirement and failure to comply with the data protection regulations can result in criminal charges.

An organisation should have a process in place to deal with erasure requests. They need to be able to identify when someone wants their personal data deleted and have a procedure for recording both verbal and written requests to ensure they respond to them within one month of receipt.

We can help you improve your data compliance with our GDPR compliant services.

You can rest assured knowing that your customers’ and clients’ information is being stored securely helping you to maintain integrity and build trust with them. This can help your business to avoid breaking data regulations that can result in severe penalties and legal action.

Customers want to feel they are in control of their data and how it’s being accessed. Our GDPR compliant services provide this experience making you stand out from the crowd.

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