Are You Willing to Pay the Price of Non-Compliance?

by Oct 28, 2020

Data privacy is a hot topic in the world of information technology and promises to remain so for the foreseeable future. As the shift continues to a more digital society, the importance of the privacy of personal information stored in corporate databases will only continue to grow. Ask anyone who has had their identity compromised if they feel enough is being done to protect personal data.

Organizations that collect and store personally identifiable information (PII) or other sensitive information regarding their customers or employees need to be held accountable for its protection. At times, it may be convenient for an enterprise to take this responsibility less than seriously. They may not be willing to devote the necessary human and financial resources required to give this data the protection it warrants in the quest to meet short-term goals. This is a short-sighted strategy that is not sustainable as we move forward.

In the early days of the Digital Revolution, the loss of sensitive enterprise data assets was often addressed by a letter of apology to the affected individuals from the offending institution. Free temporary membership in a credit monitoring service was sometimes also offered to alleviate the concerns of what were hoped to be long-term customers. There were little if any consequences for the organization whose data protection policies were at fault. Fortunately for the sake of data privacy, that situation is rapidly changing.

Governments and jurisdictions are developing data privacy regulations that are enforceable against organizations that process the personal information of their citizens. Some noteworthy examples are the European Union’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). More regulations are bound to be created as the world struggles with the questions surrounding the privacy of personal information.

The Financial Costs of Non-Compliance

There have been substantial fines awarded to organizations for their lack of compliance with privacy regulations. Some early offenders received what amounted to a financial slap on the wrist. As the regulatory landscape matures, the penalties are beginning to have more teeth and exercise the appropriate level of influence over the importance of following the rules.

German clothing retailer H&M was recently fined the equivalent of $41.3 million for GDPR violations. One of the company’s subsidiaries was found guilty of excessive monitoring of H&M employees. The size of the fine is meant to act as a deterrent to other companies that may not respect the privacy of their employees’ data.

The CCPA has only been in effect since January 1, 2020, and enforcement only began in July. The fines for businesses found in violation range from $100 to $750 per consumer per incident or the actual damages incurred, whichever is greater. You don’t need a supercomputer to see that a large data breach can be accompanied by devastating fines. Considering that many data breaches affect millions of customers, the financial penalties could force some establishments out of business.

It’s Not Just About the Money

The monetary penalties levied in the wake of data breaches are meant to be painful enough to entice compliance. In most cases, especially for first-time offenders, they are not designed to put the company in question out of business. But the real cost of non-compliance with data privacy regulations may far outweigh the initial hit to the corporate coffers.

The negative publicity that may accompany a data breach or failed audit that indicates non-compliance can be devastating to an enterprise’s reputation. Current customers will at least be motivated to look for alternate solutions and attracting new business will become much more difficult. A corporate reputation for reliability and safety that has been built over decades can be destroyed in the time it takes to copy a file. It might be impossible to rebuild customer trust at any price.

Effective Compliance Tools Are Essential

Maintaining compliance with privacy regulations demands a coordinated enterprise-level approach that includes the buy-in of all applicable employees and credible software tools. Everyone who interacts with the data needs to be on the same page regarding the serious nature of complying with regulatory standards. Software applications are required to track system compliance and alert on potential issues. The ability to generate reports that demonstrate compliance will also be needed to satisfy audit requirements.

SQL Compliance Manager provides the software side of the compliance equation for organizations that store sensitive data in SQL Server environments. The tool enables you to audit your SQL Servers to find out where sensitive data exists so it can be protected. It uses a lightweight data collection method to minimize the impact on audited servers. You can configure the application to monitor and alert on suspicious activity affecting your databases.

SQL Compliance Manager is fully customizable and comes with templates for common compliance guidelines like GDPR, SOX, and HIPAA. It is designed to help your database team pass audits with extensive reporting capabilities and can help you identify and stop potential threats before they lead to problems. A web-based dashboard makes audit data easily available to management and auditors. It’s a great tool to minimize your chances of being on the wrong side of the compliance fence.