In today’s increasingly digital age, businesses rely more and more heavily on information technology to store, process, and transmit sensitive information and IT compliance is as important as ever. From financial data to personal client details, companies handle a vast amount of sensitive personal data each day. However, this also means that businesses must comply with a range of crucial regulations, laws, and industry standards to ensure the protection and privacy of this information.
Companies that fail to comply with IT regulations can face significant financial penalties, legal liabilities, and reputational damage. In this article, we will explore the importance of IT compliance, why businesses need to prioritize it to safeguard their operations and reputation, and how to best implement such safeguards.
What is IT Compliance
IT compliance refers to rules, regulations, and industry standards that govern how businesses handle and protect sensitive data through information technology (IT) systems. It is crucial to ensure organizations meet legal, regulatory, and industry requirements related to data security, privacy, and accessibility.
IT compliance covers many topics, including data protection, access control, incident response, risk management, and auditing. A few key examples of IT compliance standards include the General Data Protection Regulation (GDPR), the Health Insurance Portability and Accountability Act (HIPAA), the Payment Card Industry Data Security Standard (PCI DSS), and the Sarbanes-Oxley Act (SOX).
You can achieve compliance with IT standards through several measures, including policies and procedures, employee training, audits, and risk assessments. Non-compliance with IT regulations can result in financial penalties, legal liabilities, and reputational damage that can be difficult, if not impossible, to recover from.
At a baseline, following appropriate IT Compliance regulations guarantees that a business has done everything within its power to ensure that company and client data remains in safe hands.
The Risks of Non-Compliance
Recent years have seen several high-profile incidents of poor IT compliance leading to significant data breaches and legal repercussions. In 2020, US credit card issuer Capital One faced an $80 million fine for a data breach that exposed the personal information of 100 million customers. A failure to patch a known vulnerability in a web application turned out to be the cause of this breach.
In the same year, British Airways was fined $26 million for a data breach that compromised the personal information of 400,000 customers. This breach was also a result of poor IT compliance practices, including insufficient access controls and a lack of encryption.
In 2019, hotel chain Marriott International faced a $123 million fine for a data breach that exposed the personal information of 500 million customers. The breach stemmed from a failure to detect and respond to an attack on its systems.
Lastly, in 2018, Facebook faced scrutiny and legal action over its handling of user data, including allegations of non-compliance with data protection regulations such as the General Data Protection Regulation (GDPR).
These incidents demonstrate the importance of implementing appropriate IT compliance measures to protect sensitive information and avoid legal and financial penalties.
Why is IT compliance Important
IT compliance helps to build strong companies which are resistant to the growing number of cyber security incidents. The best practices a company implements as a result of being compliant with IT regulations serve to protect data as well as streamline processes within the business, and increase confidence among stakeholders.
Regardless of what industry a company operates in or what service it provides, stakeholders need to have a strong foundation of trust in it for the business to run smoothly. Poor IT compliance can slow down customer service, harming efficient processes when handling customer inquiries, requests, and complaints. It can also result in legal and financial penalties, significant damage to the business’s reputation, and inefficient management of data and processes.
How to achieve IT compliance
There are five simple steps that businesses can take to achieve IT compliance:
Identify applicable laws and regulations
Businesses should identify the laws and regulations that apply to their industry and operations, and ensure they are familiar with the requirements. Not being aware of these practices can cost the company millions of dollars in reparations should the worst come to pass.
Develop policies and procedures
Businesses should develop policies and procedures that meet industry standards, and up-to-date IT compliance requirements, such as data protection, access control, and incident response. Appropriately documented procedures provide employees with the required tools to carry out their tasks within the confines of regulation and provide transparency and protection for customers and other stakeholders of the business. Making sure that everything is airtight across the board guarantees there are fewer mistakes overall.
Train employees
Businesses should train their employees on the policies and procedures related to IT compliance. Comprehensive standardized training greatly assists in keeping employees up to date with safety regulations and data protection laws, ensuring that the company remains safe against any new developments in cyber malware or threats.
Studies have shown that companies that invest in standardized employee training see higher productivity, higher income per employee, greater customer retention, and fewer IT breaches than those that do not.
Monitor and test compliance
Businesses should regularly monitor and test their compliance programs to verify their efficiency and identify any areas for improvement. Gaps or weaknesses may not be apparent, or even present, at the initial implementation of any system. Sometimes a patch for one issue can create another, so regular testing decreases the potential risks faced by the company and the customer.
Seek external expertise
Businesses can seek external expertise, such as IT compliance consultants or auditors, to ensure their compliance programs are robust and meet regulatory requirements. These auditors and consultants can guarantee objectivity, providing unbiased assessments free from internal politics. They may also possess more significant expertise than anyone in your company and are likely a more cost-effective method than hiring additional staff or investing in expensive technology and infrastructure that may not yet be in the budget. Speaking with experts can give peace of mind regarding IT compliance, as it is left in the competent hands of trained professionals.
Final Words
IT compliance is essential for businesses of any size in any industry. Implementing comprehensive and robust IT compliance frameworks can help companies protect sensitive data, prevent data breaches, and maintain legal and regulatory standards. Reduced risk of security incidents, improved productivity, and enhanced customer trust are only a handful of the benefits a company can reap from following these steps and adhering to a good strategy with the right technology and expertise.
