Why Compliance Matters: Opportunities and Challenges

Compliance is a lot more than just adhering to government rules and regulations. It indicates an organization’s commitment to protecting its customers’ personal data and upholding business values. The role of IT in maintaining an organization’s network and protecting critical data is vital in the business world. That’s why it is no longer sufficient for IT professionals to simply have a functionary level of data security and compliance knowledge.

Since IT service providers have direct access to an organization’s data, they can be held accountable for any security breaches affecting the business. If MSPs aren’t aware of the regulations their clients need to be compliant with, they risk losing valuable customers to their competitors who have the required expertise.

In this blog, we will focus on the challenges and opportunities presented by the new data privacy regulations for 2021, and how you can ensure your business remains compliant.

Compliance and Data Security

Security threats are evolving all over the world and these threats are only expected to get worse as the business world prepares to adapt to a hybrid work environment. Due to this, new privacy standards either keep emerging or existing ones are constantly updated to meet the new requirements. With businesses being forced to adapt to an uncertain economic climate due to the pandemic, the last thing they need is a security breach and the hefty compliance penalties that follow.

MSPs that provide support to organizations are now expected to be knowledgeable about data law and the regulations that come with it. MSPs that lack expertise in data security and compliance risk losing their customers to competitors who excel in it. The same goes for internal IT teams as well. They risk losing their credibility within the organization or being replaced by an MSP. This is precisely why it is vital to make security and compliance a part of your organizational culture.

Not sure where to start with your compliance program? Download our free Compliance Checklist for pointers to develop a comprehensive strategy that keeps you aligned with regulatory requirements.

New Data Privacy Compliance Considerations for 2021 

While there is no comprehensive international law on data privacy, there are plenty of sector-specific rules and regulations put forth by various regulatory bodies across the globe. About 107 countries across the world have adopted some form of data privacy regulations. Regions like North America, Europe, South America, the UK, China and Singapore have come up with new regulations for organizations in various sectors and industries.

Navigating these complex regulations can be a little tricky. However, IT professionals need to be familiar with these data privacy regulations and how they affect business organizations. This will help them incorporate the right security measures and ward off hefty fines and penalties. 

General Data Protection Regulation – European Union (GDPR – EU) 

Companies that collect citizens’ personal data in the European Union must adhere to the GDPR, which outlines a set of stringent data privacy rules and security guidelines for organizations. GDPR fines touched new heights in 2020 and can cost companies up to 4% of their revenue.

UK General Data Protection Regulation – United Kingdom (GDPR – UK) 

Following Brexit, the UK implemented its own version of the GDPR called the UK GDPR. This applies to most UK businesses and organizations that collect personal data of UK citizens. As per these regulations, even transactions between the UK and the EU will be considered as “transfers to a third country” from June 30, 2021.

Schrems II and Data Protection Impact Assessments (DPIA) – UK 

It could be argued that Schrems II classifies any data transfer outside the European Economic Area — now including the UK — as a high-risk activity, making DPIA mandatory. DPIA is a flexible tool that can be used across a range of sectors and industries. While it does not eradicate risk, it helps you determine whether a particular level of risk is acceptable. According to the UK GDPR, non-compliance to DPIA when it is required can subject you to punitive action. This may include a fine of up to £8.7 million or 2% global annual turnover, if higher.

California Consumer Privacy Act (CCPA) 

New provisions of the CCPA come into effect on July 1, 2021. These regulations apply to companies that have California-based customers with revenues over $25 million, access personal info of over 50,000 customers, or generate over half of their revenues from the sale of personal information. This also empowers California residents to opt out of their data being sold to third parties, or request disclosure or deletion of collected data. Non-compliance may attract $7,500 per violation in fines and $750 per user in civil damages.

California Privacy Rights Act (CPRA) 

This new law comes into effect from January 1, 2023. Until then, California will continue to enforce the CCPA. It also creates a new privacy agency called “California Privacy Protection Agency” to deal with enforcement. It provides users with various rights ranging from the right to correct inaccurate information to the right to sue businesses that expose usernames and passwords.

Consumer Privacy Protection Act – Canada 

If passed, the Consumer Privacy Protection Act will replace the PIPEDA. It requires organizations to adopt more robust accountability measures such as well-documented privacy management programs. It also provides greater rights to individuals and includes significant order-making powers and stronger enforcement measures in the form of fines and penalties.

Personal Data Protection Act (PDPA) – Singapore 

New amendments to the PDA came into effect from February 2021, making it one of the most significant changes made to the act since it was established in 2012. Some of the notable updates include mandatory data breach notification, enhanced accountability for individuals with penalties that include fines up to S$5,000 or up to two years in prison, and a new framework for consent.

Data Security Law (DSL) & Personal Data Protection Law (PDPL) – China 

Drafts of these two laws were released in 2020. Considered to be China’s response to the GDPR, these laws clarify China’s approach to data privacy for foreign companies operating in China or serving Chinese consumers. These are expected to be implemented along with the 2017 Cybersecurity Law.

Brazilian General Data Protection Law (LGPD) – Brazil 

This came into effect in August 2020 for organizations within Brazil and those that serve consumers in Brazil. The regulations are similar to the GDPR but mandates companies to appoint a Data Protection Officer and liaise with the Brazilian National Data Privacy Agency.

Opportunities for MSPs & IT Teams

With the rise in new regulations and changes made to existing ones, companies now face a critical challenge in incorporating these regulations the right way. This presents a unique opportunity for MSPs and internal IT teams.

With their expertise in cybersecurity, MSPs should be at the helm of incorporating these measures in their clients’ organizations. However, not many MSPs in the market have the right expertise to meet these evolving requirements. Also, overcoming the knowledge gap of data laws and regulatory compliance has become a barrier for entry into the MSP world. It is time for MSPs to make new investments in certifications, audits, and ongoing training in compliance and data. With this, MSPs can boost their success in regulated environments.

It is also a great time for internal IT teams to shine and make their achievements known to their companys’ top management. For IT departments, this evolving compliance requirement provides an opportunity to stay ahead of the curve and become a trusted advisor to the business. Their knowledge in compliance and data law can take them a long way and ensure a successful stint in any top organization.

How IT Glue Can Help

As a leading cloud-based software company, we understand the importance of information security. IT Glue helps secure your world with our SOC 2-compliant documentation platform that features an immutable audit trail, multifactor authentication and next-generation password management engine, all of which are fully integrated and linked with all your documentation.

To see how IT Glue adds an additional layer of security to your compliance program, request a demo.

Check out our “Quick Start Guide to Data Privacy and Compliance” eBook for an overview of the steps needed to ensure your business adheres to data privacy compliance policies.