Business interruption

In specific industries , compliance is a pure necessity for running a business . Although certifications , in some cases , are voluntary , consumers are getting pickier : some will not purchase services or products from a company unless they see certificates . In other words , this can limit the reach and growth of a business . For example , a client will think twice before buying IT software from a company that has not been audited and certified as a security provider .

Financial penalties

It is common for companies to receive fines if they do not follow the legislation and do not comply accordingly . In different markets , there are governing bodies responsible for setting such targets . In the EU , for instance , GDPR violations are subject to penalties up to € 20 million , or 4 % of the business ' s earnings from the previous year – whichever is higher .

In addition to financial damage , sometimes individuals also ask businesses for compensation . Especially with health-related requirements , people do not always have to show material damage to file a claim . In some cases , they can even sue for future or possible harm .

For the global economy , regulating cross-border payments is crucial . The EU ' s GDPR helps tackle this , making payments safer and data protected . We hear more from two experts . . . .

Criminal penalties , including jail time

It is rare , but not unheard of , to become a subject to jail time for data privacy violations . Following the US financial industry ' s GLBA , violators can be punished with up to five years in prison . With fast technological development and legislators feeling pressure to increase accountability for situations with high costs for failure , jail time punishment may become more common . Cyber-physical systems such as self-driving cars are also raising concerns for legislators . Since these technologies can disrupt public health , Gartner predicts that by 2024 , 75 % of CEOs will be personally liable for security incidents in this sector .

Reputational damage

Companies usually find themselves in a reputational crisis not because they did not comply with the legislation but because of what happened as a result , such as a high-profile data breach . Suppose company clients start questioning the credibility and reputation of a company . In that case , it can result in business disruption , loss of income or close of business in the worst case .

Overcoming compliance challenges

Create a robust security programme informed by best practices in data security . Employees should also be encouraged to see compliance as part of the internal culture and a partner rather than an obstacle . Concerning vendors , companies should evaluate partners upfront and request proof of compliance at the earliest stages of negotiations .

We hear from two experts about how companies can comply with GDPR and protect customer data . . . .

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