If you are unsure whether you need to comply with business rules and regulations, look at businesses like JPMorgan, Google, and Deutsche Bank. According to the US Securities and Exchange Commission, JPMorgan was fined $125 million for lack of regulatory compliance, such as maintaining proper records.
Modern businesses must adhere to compliance and regulatory frameworks, whether small or big. Compliance means that your business conforms to all regulations required in your industry.
Why is compliance essential for businesses?
Compliance ensures that your business is protected from hefty fines, as in the case of JPMorgan. These regulations affect every industry in the world. For example, the business must comply with the Hospital Price Transparency Rule if it is a hospital. Failure to comply with this regulation can result in a penalty of up to $5,500 daily.
Compliance is more than a legal requirement. Businesses have a moral obligation to do what is right. This approach safeguards the interest of the consumer, investor, employee, and business. The best way to be compliant is through a data search.
Why is Data Search Important to a Business?
Data search is the process of collecting, processing and analyzing sensitive data. This makes it easy to identify compliance gaps that might result in hefty penalties.
Other benefits of analyzing sensitive data are:
You have evidence of compliance in case of a legal lawsuit
Businesses get data-driven insights about compliance trends
It is easy to monitor compliance in real-time
Captain Compliance is a data consulting business that uses data discovery tools to analyze sensitive data to ensure regulatory compliance. Our data discovery techniques and approaches make it easy for businesses to get a holistic 360 view of the regulatory landscape.
Key Takeaways
The best way for a business to be compliant is to integrate data search into its processes and systems.
Captain Compliance helps businesses to address compliance gaps.
Non-complaint businesses risk being penalized 2% of their annual revenues
The Evolving Compliance Landscape
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The compliance landscape is constantly changing and will continue to change as technology evolves. A good case is the COVID-19 pandemic, which required employers to collect their employees’ health data.
This measure was against EU regulations such as the GDPR, which restricts businesses from collecting sensitive employee data.
After the pandemic, businesses were forced to innovate and introduce new concepts, such as work-from-home initiatives. This brought new challenges regarding data security and how consumers’ sensitive data was used and stored. Working from home exposed employees to numerous attempted data breaches and hacking, the most common being Zoom bombing.
The compliance landscape will continue to change as technology evolves and governments try to obtain their citizens’ sensitive data.
Businesses face numerous challenges in keeping up with the ever-changing sensitive data landscape. One is the complexity of these regulations, particularly for small businesses that don’t have the financial muscle to hire lawyers and compliance officers.
Data discovery becomes a challenge for large businesses because of the data involved. Other challenges include:
Resource allocation: Businesses must allocate resources for data discovery, compliance officers, and staff training.
Technology use: To adhere to data security laws, businesses must use modern technology. These sensitive data discovery tools are expensive to purchase and operate.
Changing Landscape: Businesses operating in several countries have to constantly change their data discovery techniques to accommodate the sensitive data laws of these countries. This increases the cost of compliance and makes coordination between regional offices a logistical challenge.
Businesses that are non-compliant or fail to keep up with evolving regulations may face several consequences. The consequences are:
Reputational damage: Businesses found guilty of non-compliance may lose consumer trust and investor confidence and a drop in revenue.
Closure: Non-compliant businesses risk being shut down, resulting in loss of income for the owner and shareholders.
Business disruption: Businesses spend too much money and time in litigation instead of serving their consumers.
Harnessing the Power of Data Search
Data search is a systematic data discovery approach that collects, organizes, and analyzes sensitive data to ensure a business complies with local and international laws.
Data search uses data discovery techniques to collect various types of information, such as consumer data and financial and health records. During the data search, we will use a data discovery process to identify violations being committed.
Data search aims to rectify non-compliance before the business faces a lawsuit. Other advantages of data search are:
Data search ensures efficiency because modern data discovery tools automatically address compliance issues instead of being done manually.
Real-time monitoring makes detecting and rectifying non-compliance easy.
Modern data discovery tools use data search algorithms to give out early warning alerts for corrective action to be taken.
Data search tools are affordable compared to hiring a compliance manager and manually inspecting hundreds of data.
Lastly, modern data discovery tools are cloud-based, meaning a business can access historical information. This information is essential because it provides compliance trends and creates compliance strategies.
Identifying Common Compliance Gaps
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Compliance gaps manifest themselves in various ways, including failure to comply with relevant sensitive data like the General Data Protection Regulation {GDPR}. For businesses operating in California, the most common compliance gap is failure to comply with the California Consumer Privacy Act {CCPA}.
When looking at the GDPR, we have established that most businesses fail to comply with data portability regulations and the no third parties rule. The GDPR requires that EU citizens can transfer their sensitive data from one entity to another. Open formats such as CSV are recommended.
GDPR also requires businesses operating in the EU to only collect sensitive data that has been paid for. In addition, consumers must give consent for their data to be collected.
Data security compliance Gaps
Cybersecurity compliance gaps mainly occur when a business fails to encrypt consumers’ sensitive data. Data breaches are caused by several factors, such as having a vulnerable system, lack of proper employee training, and poor security policies.
Gaps are also caused by weak password policies and a lack of a reporting mechanism to ensure data breaches are reported within 72 hours.
Environmental Compliance Gaps
Environmental compliance is important because it ensures businesses do not pollute the environment. Ecological laws will vary depending on the country you operate in. One gap is the failure to comply with RoHS regulations. RoHS stands for Restriction of Hazardous Substance, and it affects businesses operating in the electronics industry.
Another compliance gap is when businesses fail to notify consumers whether their products contain harmful chemicals. Compliance with this is under REACH regulations.
Real-World Examples of Compliance Shortcomings
Businesses that fail to comply with sensitive data laws get slapped with hefty fines and penalties. An excellent example is Meta, which was fined $1.3 billion by the Ireland Data Protection Commission {DPC}.
Apart from the fine, Meta was also ordered to stop processing and storing the sensitive information of EU consumers in the United States.
Popular app TikTok was also fined more than $350 million for being GDPR non-compliant. The app was fined for failing to protect the rights of minors.
It violated the rights of minors by setting their account to public by default. It was also fined for exposing children to the risk of being abused by adults.
In 2021, Google was fined more than 90 million euros after it was found guilty of not allowing YouTube users in France to opt out of cookies freely. Google did not voluntarily provide an opt-out service because it used cookies to generate advertising revenue.
Businesses have also not been spared from violating environmental laws. An example is Eastman Chemical Resins, which the Environmental Protection Agency fined $2.4 million. The fine was a result of several violations, which include:
Non-compliance with the Chronic Clean Water Act
Unlawfully discharging oil and other pollutants
Failure to comply with the Clean Air Act
The financial implication of non-compliance will vary depending on the violation committed. For example, violating the GDPR may result in a fine of up to 10 million dollars or 2% of a company’s annual revenue. CCPA fines range from $2,500 per accidental violation to $7,500 for intentional violations.
Data Search as a Detective: Unveiling Hidden Gaps
Data search methodologies play a crucial role in earthing hidden compliance gaps, such as failure to have an opt-out mechanism on the website. Data search methodologies are techniques or approaches used to analyze information. One type of technique worth mentioning is data aggregation.
Data aggregation is a process that collects data from different sources and then presents it in summary form. The information is then analyzed statistically to make an informed decision.
This information must include transaction logs, employee activities, financial records, and advertising data. This way, getting a holistic approach to a business’s operations becomes easy.
Other ways to identify compliance gaps are:
Pattern recognition algorithms: These algorithms are made to identify irregularities in the available data. Pattern algorithms deal with large datasets that are not easy to analyze. Recognition algorithms identify unusual financial transactions or deviations from predetermined compliance norms.
Automated alerts: Businesses can use advanced data search tools that send signals if a compliance gap is detected. The computerized alerts can also be used alongside real-time monitoring applications to reduce the risk of prolonged non-compliance.
Geospatial search: Geospatial technology is valuable for identifying non-compliance, especially where geographic rules and regulations are involved. For example, real estate businesses can use geospatial search to verify that construction and land use conforms to local zoning rules.
Logistical businesses can also use geospatial search to ensure they comply with various laws, such as delivery routes to use and rest periods for drivers.
To identify compliance gaps, businesses should use modern technologies such as data analytics, Artificial Intelligence, and machine learning. These technologies are important because they make it possible for you to analyze large amounts of data in a short period.
Machine learning uses predictive analysis to predict potential compliance gaps based on past data trends.
Machine learning and AI work together to identify complex patterns and information anomalies that a data analyst might miss. Over time, machine learning becomes better and faster at identifying compliance gaps.
Data search techniques are vital because they uncover hidden patterns and help businesses prevent future compliance issues. Data search is also essential because it helps minimize financial risks, reputational damage, and lawsuits.
The Role of Captain Compliance in Data-Driven Compliance
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We play a crucial role in the compliance landscape. Our work ensures that businesses like yours are not sued for non-compliance. We do this by:
Regular audits and assessments: We audit your data process to ensure it complies with industry rules and regulations. We serve all sectors, including financial, advertising, internet, manufacturing, and social media.
Providing risk mitigation strategies: After auditing your data map, we recommend mitigation strategies based on the identified risks and vulnerabilities.
Employee training: We train your employees to ensure the business is compliant. Training includes information on protecting sensitive information and using secure channels to send data.
Policy improvement: We offer guidance on improving your internal processes to ensure compliance. This is based on the audit that we have done.
Why should businesses work with Captain Compliance?
We bring a wealth of regulatory knowledge to the table, and our team comprises compliance experts versed in the regulatory requirements of different industries. In addition, we use modern technologies such as AI, big data, and visualization tools to look through hidden information.
We provide tailor-made solutions and appreciate that every business has unique compliance needs.
It is more beneficial for businesses to outsource their compliance efforts to experts than to handle it themselves.
In addition, it is better to outsource the work to compliance experts rather than hire an employee who has yet to learn about international laws.
Lastly, there is always a risk that internal biases can result in a lack of objectivity, resulting in non-compliance.
Crafting a Data-Driven Compliance Strategy
The first step of integrating data search into your compliance strategy is to assess your business’s current compliance needs. These should be industry-specific regulations.
After the audit, you must identify all data sources, such as transaction logs, customer information, and transaction logs. Afterwards, find a data search tool that meets the needs of your business.
Once you have collected the data, store it in a centralized and structured manner for easy analysis.
Use data search techniques to identify anomalies and compliance gaps. Also, ensure the search processes comply with data privacy laws by encrypting the data.
A good data-driven compliance strategy must have clear objectives, metrics, and KPIs. The goals should include specifics such as adhering to identified laws, ensuring ethical practices, and improving data security.
Some key metrics and KPIs include the number of violations and alert response times. These objectives and metrics are essential because they help the business track its compliance progress.
Challenges and Risk Mitigation
Implementing a risk mitigation strategy comes with various challenges, such as using inaccurate data. When business systems are flawed, there is a high probability that the data collected may not accurately represent what happens in the business.
As a result, flawed compliance assessments are made. Another challenge or risk is information overload. This mainly affects big businesses that collect information from thousands of consumers.
Another challenge is dealing with regulatory changes, primarily when operating in multiple countries with different regulations.
Lastly, Compliance strategies are also affected by data security and privacy concerns, especially when handling sensitive consumer information such as phone numbers and credit card details.
Various strategies are used to deal with data security and privacy concerns. These strategies are:
Data encryption: Businesses should encrypt their information using various encryption methods such as hashing, symmetric, and asymmetric encryption.
Data minimization: This is collecting and storing only necessary information about the consumer. This helps minimize exposure risks.
Privacy impact assessments: The assessments help to evaluate the potential risks that a consumer’s information will be leaked.
Businesses should work with external compliance experts to conduct regular operations assessments. In addition, regularly train your employees to ensure they are up to date with compliance laws.
Closing
In conclusion, do not waste your time dealing with regulatory complaint issues while there are experts who will do this for you. Captain Compliance will create a data search strategy for your business to ensure you are not penalized.
If you feel overwhelmed with the numerous compliance regulations, feel free to reach out for a consultative session. We are the right partners for your business!
FAQS
What is an Information discovery library?
An information discovery library is a software library that includes APIs and tools for finding information from various data sources. These sources can be search engines or databases.
What does compliance mean?
Compliance means that a company adheres to local and international laws that apply to its industry.
What is the abbreviation for information discovery and delivery?
The abbreviation for information discovery and delivery is Inf. Discov.
What is the information of discovery?
Information discovery is a process of retrieving information from different fields for different purposes.