We live in a data-centric world. From employee tax numbers to client addresses to sensitive financial information, businesses often have access to a myriad of personally identifiable information (PII). With this increased data access comes greater responsibility, especially with breaches, fines, and regulations on the line. However, if this is all new to you, it can be overwhelming. So, today, we are going to break it down and answer the common question: “What is data compliance, and why should your business care?”
What is Data Compliance?
To put it simply, data compliance means handling sensitive information in accordance with legal, regulatory, and ethical standards. Depending on the governing body your business is subject to, government and/or industry, your business must follow the regulations on the collection, management, storage, and disposal of sensitive information.
Why Data Compliance Matters for Businesses
Data compliance isn’t just a buzzword you want to include on your website. It is a critical business component that could bring your business to a halt if not properly managed.
By taking the proper actions to meet data compliance requirements, your business will:
- Protect sensitive employee and customer information
- Prevent data breaches and minimize risk exposure
- Avoid expensive legal and financial penalties
- Build trust and credibility as a brand
- Support long-term business growth and stability
Common Data Compliance Regulations
Data compliance for businesses is shaped by a combination of federal, state, and industry regulations, each designed to protect specific types of sensitive information. While requirements vary by business type, most businesses are subject to at least one, if not multiple, laws. Here are a few examples of common data compliance regulations that you hear about the most often.
HIPAA (Health Insurance Portability and Accountability Act): HIPAA governs healthcare providers, insurers, and their business associates to protect private health information. This includes strict safeguards for the storage, access, and disposal of medical records.
FACTA (Fair and Accurate Credit Transactions Act): FACTA requires that businesses take reasonable measures to ensure that consumer information is destroyed so it cannot be read or reconstructed. This applies to any records containing PII, including tax documents, credit reports, and financial records.
GLBA (Gramm-Leach-Bliley Act): GLBA applies to financial institutions and businesses that handle consumer financial data. It requires organizations to implement safeguards to protect sensitive financial information throughout its lifecycle, including written security plans, assessments, and destruction practices.
State-Level Data Protection Laws: Many states have enacted their own data protection and privacy laws that apply to businesses operating in those states. For example, here in Washington State, our state law requires businesses to act quickly if personal information is exposed.
Key Components of Data Compliance
Effective data compliance is built on a few core practices that guide how information is handled throughout its lifecycle.
Step 1: Only Collect What is Necessary
When businesses are collecting data, they are responsible for everything they receive. Therefore, the best data collection practice is to limit collection to only what is absolutely necessary for the business operation.
Step 2: Secure Physical and Digital Data
The data that is collected must be securely stored, whether digital or physical. For example, physical safeguards include locked files or secure facilities, whereas digital protections include encryption software and secure networks.
Step 3: Limit Access Control
Not everyone in a business needs access to PII. To prevent data breaches, only authorized individuals should be able to view or use sensitive data.
Step 4: Keep Data Only as Long as Necessary
Keeping data requires extensive storage and security. To prevent security risks and minimize operational costs, businesses should establish clear data retention policies that ensure information is retained only as long as required by law or operational need.
Step 5: Perform Proper Data Destruction
Lastly, when data has reached the end of its lifespan, secure data disposal is essential. Proper destruction of documents and devices through professional shredding and hard drive destruction ensures compliance throughout the final stage.
How CI Information Management Supports Data Compliance
At CI Information Management, we assist businesses in achieving compliance with their data destruction procedures. Our NAID AAA-certified shredding services ensure uncompromised security while adhering to the highest ethical standards. With our expertise, compliance with industry, state, and federal laws is guaranteed, providing you peace of mind as we permanently destroy your confidential business information.
New to data compliance and are not sure where to start? Learn how CI Information Management can help your business stay compliant with secure data destruction solutions.
