Compliance with regulatory laws about data storage, management, and protection can be difficult for businesses to keep up with, as they are ever-changing with new rules and requirements. By thinking about compliance as an opportunity rather than a roadblock to innovation, they can instead embrace it as a step toward a better customer experience of integrated data governance and trusted data use.
Here’s what IT executives should know about enterprise data storage compliance.
Understanding Data Storage Compliance
Data compliance is how an organization adheres to laws, regulations, and industry standards about data storage to ensure data security, privacy, and integrity while minimizing risks. Compliance helps the organization comply with privacy regulations and maintain proper data retention and disposal processes.
But data compliance can be challenging. Data protection laws are constantly changing, and organizations need to stay on top of these changes to remain compliant. The situation is even more challenging for organizations operating internationally, as they must adhere to each jurisdiction’s unique data protection and data storage laws.
Why Do We Need Data Storage Compliance Regulations?
There are a number of reasons to comply with data storage regulations. Here are a few of the most important.
Legal and Regulatory Requirements
Failing to comply with data protection and privacy laws is punishable by law. For organizations, it’s not just about avoiding hefty fines and penalties but about maintaining good reputations in their industries.
Data compliance involves protecting regulated information against misuse to better secure valuable assets and minimize data breach risks. The only way for businesses to avoid penalties due to breaches is by ensuring that their data security and storage priorities are aligned.
Consumer Trust and Privacy
Consumers are more aware than ever of their personal data and data rights. Compliance with data protection regulations reassures them that your organization cares about consumer privacy and careful data handling.
Organizations that proactively take measures to ensure data compliance differentiate themselves from competitors through their commitment to data security and privacy. This commitment also inspires loyalty in customers who value responsible data practices.
Clearly defined data policies and protocols help streamline data management and facilitate effective risk management. This can help businesses operate more efficiently and provide a better customer and employee experience.
Compliance Standards and Regulations
General Data Protection Regulation (GDPR)
The European Union’s GDPR was created with individuals’ control and data rights in mind. It further aims to regulate international businesses’ data policies in singular, simple legislation. According to the GDPR, the stated legislation will apply to any business handling the personal data of EU citizens or residents, irrespective of where the business is headquartered. The regulation also lays down rules for the processing and free movement of personal data.
The penalties for violating the GDPR are very high. There are two types of penalty fines that could be applied: up to 20 million Euros, or 4 percent of global revenue, whichever is higher. People whose personal data is compromised can seek further compensation for damages.
The General Data Protection Regulation laid the foundation for global data privacy laws that address an individual’s fundamental right to privacy. More than 100 countries have followed suit and enacted their own data privacy regulations.
The Sarbanes-Oxley Act, often shortened to SOX or Sarbox, is a U.S. federal law that requires public accounting firms to retain documentation about audits for seven years. Public companies must hold payroll documents for seven years and purchase orders for five. Failure to meet these obligations can result in fines, imprisonment, or both.
The Sarbanes-Oxley Act was passed by the U.S. Congress in 2002 in the wake of the Enron and WorldCom accounting scandals. Affecting public accounting firms and companies, SOX is meant to protect investors and help ensure a company’s financial information and other disclosures accurately reflect how a business operates.
Privately-held companies must also keep SOX compliance in mind. Provisions related to intentionally falsifying or destroying records to derail a federal investigation also apply to private companies.
Health Insurance Portability and Accountability Act of 1996 (HIPAA)
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a U.S. federal law that prevents covered entities, including healthcare providers and health insurance companies, from disclosing patients’ health information without their consent or knowledge. Passed by Congress in 1996, HIPAA tackles many issues, including protecting health insurance coverage for workers when their job status changes. It also includes some strict privacy and security provisions that protect patient information.
HIPAA tightly governs how protected health information (PHI) is managed and shared in all its forms. Violating HIPAA’s privacy rules can result in fines between $127 and $250,000 per violation, depending on the nature of the HIPAA violation. Intentionally disclosing PHI can also lead to imprisonment of up to 10 years.
The HIPAA Privacy Rule regulates the use and disclosure of protected health information or PHI of individuals and organizations, also called “covered entities.” It contains standards for an individual’s rights to control the usage of sensitive information. Its primary goal is to facilitate the flow of health information necessary to provide high-quality healthcare while still protecting individuals’ health information.
Payment Card Industry Security Standards Council (PCI SSC)
Established by American Express, Discover Financial Services, JCB International, MasterCard, and Visa, the PCI Security Standards Council sets global requirements for how businesses protect and manage credit card data. The PCI DSS standardizes baseline technical and operational requirements that protect account data.
The PCI Security Standards Council) published the PCI Data Security Standard 4.0 in March 2022. PCI DSS v4.0 replaces version 3.2.1, incorporating new threats and covering technologies to combat them. PCI DSS, v3.2.1 will remain active for a grace period of two years until March 31, 2024.
The update focuses on:
- Evolving security needs for payments
- Viewing security as a continuous process
- Enhancing validation methods and procedures
- Increasing flexibility to incorporate alternate security methods
U.S. State and Federal Laws
The U.S. House of Representatives Committee on Energy and Commerce has held three scheduled meetings to discuss a new draft of the American Data Privacy and Protection Act (ADPPA), as the federal privacy legislation remains to be signed into law. The federal compliance legislation was first introduced in the House in June 2022.
Data protection and privacy in the United States has primarily been regulated by state laws such as these scheduled statutes:
The California Privacy Rights Act (CPRA), which expands upon the California Consumer Privacy Act (CCPA) of 2018 to include the right to restrict the use of personal data, the right to correction, the right to access, and the right to opt-out. It also establishes a new enforcement agency, the California Privacy Protection Agency (CPPA), as an agency responsible for enforcing data privacy rights in California.
- The Virginia Consumer Data Protection Act (VCDPA), which became law on January 1, 2023, applies to both government and non-government organizations that control and process personal data.
- The Colorado Privacy Act (CPA), which became law on July 1, 2023, provides Colorado residents the right to choose not to have their private data used or sold for targeted advertising.
- The Connecticut Data Privacy Act (CTDPA), which became law on July 1, 2023, gives Connecticut residents control over personal data collected by businesses operating in the state.
- The Utah Consumer Privacy Act (UCPA), scheduled to become law on December 31, 2023, mandates that there be no requirement to conduct data protection assessments for certain types of processing activities, specifically for companies with annual revenue of more than $25 million.
Key Considerations in Storage Compliance
IT professionals must retain customer data while making sure it hasn’t been altered. This often means using WORM (Write Once, Read Many) compliant solutions and other methods to guarantee information in archival and long-term data stores remains unaltered and accessible in case the organization comes under regulatory scrutiny.
Different types of data are subject to different retention periods, and businesses today are collecting more information about their customers than ever before.
Data compliance comes at a cost, but organizations must enforce data retention as a part of their overall data storage strategy.
The Data Storage and Security Overlap
Perhaps the most consequential aspect of data compliance is how security creeps into the proceedings.
Many regulatory frameworks include breach notification rules, requiring businesses to alert customers if their data is leaked and incur penalties for mishandling data. The only way for businesses to avoid this type of penalty is by ensuring data security and storage priorities are aligned.
Data compliance involves protecting regulated information from misuse, often requiring storage arrays and other storage systems to support cryptography schemes while continuing to deliver high performance levels.
Data Compliance Best Practices
- Create a data compliance policy. This policy should outline your organization’s approach to data protection, privacy, and compliance. It should include data collection, processing, storage, sharing, retention, and disposal guidelines.
- Implement strong data security measures. This includes using encryption, access controls, firewalls, and other security technologies to protect sensitive data from unauthorized access, disclosure, alteration, or destruction.
- Conduct regular audits. This will help you ensure your organization is following its data compliance policies and maintaining data security.
- Monitor third parties. If you outsource any of your data processing activities, you must ensure third-party vendors also comply with data protection regulations.
- Have a plan for responding to data breaches. This plan should include steps for containing the breach, notifying affected individuals, and investigating the incident.
Data Compliance: A Crucial Step for Security and Customer Trust
Data compliance can be tricky to navigate and costly if you get it wrong. You must take every care to control how data is stored and accessed. Proper documentation can solve many compliance challenges and provide ways to deal with unwanted incidents such as data breaches. But beyond documentation, your storage infrastructure and data need to be closely monitored with regular tests and audits.
Adherence to data compliance and regulations inspires customer trust and customer loyalty. Although data storage compliance can be difficult to manage, it is both necessary and worth it when it comes to properly handling the massive amounts of data generated every day.