7 Top Data Regulatory Compliance Issues Faced by Businesses

We’re living in an increasingly data-driven world. Companies face evolving and rapid internal and external threats to their data privacy. State and federal lawmakers are concerned about these issues too, which means businesses face data regulatory compliance issues stretching from the national to local levels. Most of these rules focus on data privacy, which is a growing concern even as the risk of data breaches increases.

Regulatory bodies have introduced stringent data protection laws and regulations to ensure the confidentiality and security of personal information. Failure to comply with these regulations can result in severe consequences, including hefty fines and damage to a company’s reputation. That’s why more than half (57%) of companies plan to spend more time and money on data regulatory compliance this year.

What rules should you pay attention to this year as you guide your company through the data regulatory compliance minefield?

Seven Data Regulatory Compliance Rules Affecting Your Business This Year

1. General Data Protection Regulation (GDPR) Compliance Rules

Information Week calls the General Data Protection Regulation (GDPR) the gold standard for consumer privacy protection. Although the GDPR is a European Union (E.U.) regulation, its impact is far-reaching, affecting U.S. businesses that process the personal data of E.U. residents. GDPR tenets include:

• Organizations must have a valid legal basis for processing personal data. Companies must inform individuals clearly about their purposes and methods for data processing.
• Organizations must ensure that data is used only for the original reason it was collected.
• Only necessary and relevant personal data should be collected and processed.
• Personal data must be accurate and kept up to date.
• Personal data should be securely deleted or anonymized when it is no longer needed.
• Organizations must implement appropriate security measures to protect personal data against unauthorized access, disclosure, alteration, or destruction.
• Businesses must demonstrate data regulatory compliance by implementing data protection impact assessments (DPIAs), appointing a Data Protection Officer (DPO) in some instances and maintaining records of processing activities.
• Individuals have the right to access or erase their personal data. They have the right to restrict how companies process data. They also have the right to data portability.
• When transferring personal data outside the European Economic Area (EEA), organizations must ensure appropriate safeguards are in place.

Many U.S. companies face challenges complying with GDPR due to its extraterritorial scope and the need to align their data practices with E.U. standards when dealing with customers, partners, or employees based in the E.U.

2. California Consumer Privacy Act (CCPA) Compliance Rules

The California Consumer Privacy Act (CCPA) is one of the top state-level data regulatory compliance protection regulations in the U.S. to date. The law grants California residents specific rights over their personal information and imposes obligations on businesses that collect or process their data. Companies must provide transparent privacy notices, allow consumers to opt out of data sales and fulfill data subject access requests. CCPA challenges U.S. businesses, particularly those operating nationwide, as they must navigate the complexities of data regulatory compliance with California while ensuring consistency across all states.

3. Health Insurance Portability and Accountability Act (HIPAA) Compliance Rules

The healthcare industry faces unique data regulatory compliance challenges due to the Health Insurance Portability and Accountability Act (HIPAA). HIPAA sets standards for the protection of patient’s medical information, requiring covered entities (e.g., healthcare providers, health plans) and their business associates (e.g., cloud service providers, billing companies) to implement safeguards to protect electronic Protected Health Information (ePHI). Achieving HIPAA data regulatory compliance involves implementing administrative, physical, and technical safeguards, conducting regular risk assessments and adhering to strict data breach notification requirements.

4. Gramm-Leach-Bliley Act (GLBA) Compliance Rules

The Gramm-Leach-Bliley Act (GLBA) is another critical data protection regulation that affects financial institutions, including banks, credit unions and securities firms. GLBA mandates these institutions to protect consumers’ personal financial information and sets requirements for privacy notices, information sharing limitations and safeguarding customer data.

Achieving GLBA data regulatory compliance involves implementing comprehensive data security programs, conducting risk assessments and ensuring proper data handling throughout the organization. Many financial institutions struggle with GLBA compliance due to the complex nature of their data ecosystems and the need to balance security with convenience in their customer interactions.

5. Payment Card Industry Data Security Standard (PCI DSS) Compliance Rules

Compliance with the Payment Card Industry Data Security Standard (PCI DSS) is essential for businesses that handle payment card data. PCI DSS ensures the secure handling of cardholder information to prevent data breaches and fraud.

Data regulatory compliance with these rules requires businesses to maintain secure networks, implement strong access controls, regularly monitor and test security systems and maintain an information security policy.

Achieving and maintaining PCI DSS compliance can be challenging for U.S. businesses, particularly those in the retail and ecommerce sectors, as they must continually adapt to evolving security threats and adhere to stringent requirements to protect customer payment card data.

6. Emerging State-Specific Data Breach Notification Laws

Data breaches pose a significant risk to businesses, and U.S. states are increasingly responding by enacting data breach notification laws. These laws typically require organizations to notify affected individuals, state attorneys general, and credit reporting agencies in case of a data breach. However, each state has variations in terms of notification timing, content and specific triggers for notification. U.S. businesses must navigate these state-specific data breach notification laws, which can be challenging, especially for organizations that operate nationally or across multiple states.

7. Emerging State Privacy Regulations

In addition to California’s CCPA, several states have started introducing privacy regulations inspired by the GDPR and CCPA. For example, Virginia passed the Virginia Consumer Data Protection Act (VCDPA), and Colorado enacted the Colorado Privacy Act (CPA). While these state privacy laws may share similarities, there are differences in scope, definitions, and compliance requirements. US businesses must monitor and adapt to these emerging state privacy regulations to ensure compliance and avoid penalties.

Contact Red River for Help with Data Regulatory Compliance

With more than two decades of experience, Red River understands the ongoing necessity of data regulatory compliance. Even as these rules change, so do our usage patterns for data collection, use and storage. From bring-your-own-device (BYOD) policies to Internet of Things (IoT) sensors, your business is at risk of non-compliance with the latest data regulatory rules.

Red River is here to help. Talk with our team today about data compliance, cybersecurity and more. We have the experience you need for today’s digital complexities.

FAQ

What is the GDPR?

The General Data Protection Regulation (GDPR) is a comprehensive data protection law that was implemented in the European Union (E.U.) on May 25, 2018. It replaced the Data Protection Directive 95/46/EC and aims to harmonize data protection regulations across the E.U. member states.

What happens to a company that fails to comply with data protection laws?

The consequences for a company that fails to comply with data protection laws, such as the GDPR, can vary depending on the severity and nature of the violation, as well as the jurisdiction in which the company operates. However, here are some potential consequences that a non-compliant company may face:

• Fines and Penalties
• Legal Actions and Lawsuits
• Remedial Measures and Audits
• Reputational Damage
• Business Restrictions and Bans