Data Protection Compliance: Frameworks for Small Businesses

Data protection compliance is a somewhat vague concept that has serious implications for your business. The General Data Protection Regulation (GDPR) is the global governing body in the data protection sphere. It standardizes the expectations for businesses that manage customers’ sensitive information. Similarly, the California Consumer Protection Act (CCPA) provides a legal foothold for customers to control their personal data.

Whether you do business online, in person, or a combination of both, it’s best to keep a better-safe-than-sorry mentality when it comes to these regulations. In general, there are a few steps to take to ensure data protection compliance:

  1. Identify key compliance components and participants
  2. Understand compliance expectations
  3. Implement and maintain compliance systems
  4. Develop a disaster recovery plan

Step one: Identify key compliance components and participants

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Before you can implement a data protection framework, you need to know what constitutes relevant data, how it’s handled, and who is responsible for protecting it. GDPR primarily concerns personally identifiable information (PII), or the information that can be used to identify an individual user. Traditionally, PII has included information like a person’s Social Security number, biometric data, geographic location, mailing address, credit card number, or phone number. The rise of the internet, however, expanded this definition to include email addresses, IP addresses, login credentials, and even digital photos.

Data processing, then, is any action taken regarding PII. This includes collecting, storing, modifying, and sharing — all things your business technologies are likely doing on your behalf. An obvious example is if your content management system (CMS) displays a form on your website to collect customers’ email addresses for future marketing campaigns. Both the collection and storage of those email addresses are considered data processing, as is any data that comes from a customer’s interactions with subsequent emails. However, data processing can also include more inconspicuous things, like storing a customer’s sales history in your business’s database or automatically purging dormant customer accounts from your customer relationship management (CRM) software after a period of time.

All of the systems listed above as well as any other technology that interacts with your business data is considered a processor. These typically come from third-party companies with whom you sign service agreements. As the controller, you (or a designated person at your company) decide why and how data is processed, and the processor is responsible for doing the processing on your behalf. Further, you’re also responsible for ensuring that the processor’s data protection standards are aligned with those of your business.

Recommended: Most Companies are Confident in Their Compliance Controls

Step two: Understand compliance expectations

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Although the European Union was responsible for GDPR legislation in 2018, it has implications for companies around the world. This is because GDPR compliance is required for organizations that offer goods and services (regardless of actual transactions) or monitor behavior for prospective customers or users in the E.U. The language here is discerning: essentially, any organization that has the potential to engage with citizens in the E.U. fall under GDPR jurisdiction. 

Regardless of your business’s size or industry, you should understand the compliance expectations if your organization has any online presence (and it should). Otherwise, you risk severe penalties and hefty fines in addition to the reputational damage a scandal can create. Thankfully, GDPR compliance is easier to understand when it’s broken down into the eight individual rights:

 

  • Right to be informed: You should provide clear and concise details about what data is being collected, why it’s being collected, how it will be used, and how to contact your business.
  • Right of access: You should be able to supply an individual with a record of their personal data that you have collected in a timely manner.
  • Right to rectification: You should be able to correct, complete, or otherwise update the personal data you have collected as requested by an individual in a timely manner.
  • Right to erasure: You should be able to delete all record of an individual’s personal data.
  • Right to restrict processing: You should offer a way for individuals to limit what data is collected and choose whether it will be used.
  • Right to data portability: You should be able to transmit an individual’s personal data securely and in a timely manner.
  • Right to object: You should provide a clear, direct way for individuals to refuse processing of their personal data.
  • Right to non-automated decision making: You should obtain express permissions manually granted by an individual unless automation is otherwise permitted.

 

Recommended: Last-Minute GDPR Compliance Tips for SMBs

Step three: Implement and maintain compliance systems

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Now that you have a general understanding of your compliance expectations, you can review your current data protection practices and adjust them accordingly. An audit of your data will help you evaluate your processes to identify weaknesses. Some questions to consider include:

  • What kind of data do you collect?
  • What purpose does the data serve?
  • Where is the data stored?
  • What actions can you take involving the data?
  • Do individuals provide informed consent about your data processes?
  • Can individuals control what data is collected?

If you’re unable to easily answer any of the above questions, you may have holes in your data processes that need to be addressed. Start with the most basic elements (what data you’re collecting, how you’re collecting it, and why) and work toward the more complex ones. 

Once you’ve answered each question, it’s important to document your compliance measures so you can be proactive about addressing any questions or concerns that may arise. In addition to a privacy statement, data protection and retention policies, and consent forms, you should also have a documented plan for data breach notifications as part of a broader disaster recovery plan (more on that below). These questions and the documentation to support them should be reviewed and updated regularly to ensure they reflect the most accurate information.

You may find it beneficial to adopt a governance, risk, and compliance (GRC) software tool to help accomplish these goals. These platforms can help you manage GDPR compliance as your business grows so you can rest assured that you have all your bases covered and will be prepared for any situation. Examples of these tools include:

Recommended: How to Improve Governance, Risk, and Compliance

Step four: Develop a disaster recovery plan

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When you’re responsible for managing personal data, you must have a plan in place to prevent a potential disaster from wreaking permanent havoc on your business. A thorough disaster recovery plan identifies all of the systems that could be impacted by a catastrophe, whether it’s natural (like tornado or flood) or man-made (like equipment failure or a malware attack). This plan will also address the role of each person in preventing a disaster from happening, reacting to a disaster in progress, and returning to business as usual in the aftermath. 

Your organization’s data will be front and center in any case, which is why understanding data protection compliance is so critical. Data is one of the most valuable assets a business has, and the rise of cyberterrorism means no company can be too secure or too prepared. Aside from the benefit of avoiding steep fines, establishing a GDPR compliance framework for your business means you will have full visibility over your data at all times. Thus, you will be able to act quickly and provide a transparent account of any event. Your customers (and prospective customers) will have peace of mind knowing they are always fully in control of their data.

Kaiti Norton
Kaiti Norton
Kaiti Norton is the editor of Small Business Computing. She is passionate about creating relatable, research-based content that helps small businesses thrive.

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