… and why strong record keeping and innovative software are key
For IT firms and any other groups who plan to trade in Europe, keeping up with GDPR is essential to conducting compliant business.
However, four years have passed since the deadline for firms to update their processes in line with GDPR came in, and while some companies implemented procedures to meet the core requirements, many are yet to develop processes that identify and manage unstructured data.
Handling the regulatory risks of this is essential. Any unstructured data containing personally identifiable information (PII) must be classified appropriately, with relevant access controls applied to it and key attributes documented. With that in mind, let’s explore the measures IT firms can take to ensure their business stays on the right side of regulation.
Understanding the risks of holding personal data
IT firms must first understand the financial and reputational risks involved in the handling of PII. If an unchecked data silo is exposed and reported to the ICO, the potential penalty could have a serious impact on an organisation’s future. Fines can be high enough to undermine businesses; in these cases, a penalty will be equal to 4% of worldwide turnover or up to £20m, whichever is higher. Substantial fines have been issued to many businesses over the years, including one of the biggest fines of over £100m in 2020, and more recently the implications for Meta breaches could be enormous.
It’s not just the impact of a fine that needs to be considered. PII is trusted data given by customers, so it is your business’s responsibility to treat it with the utmost care. Customers must feel confident that a business or service provider will handle personal data safely and correctly. It only takes one mistake to damage this trust and once non-compliance has been made public, it will be a long battle to rebuild relationships. 83% of consumers refuse to do business with brands they do not trust. “To build trust, brands must focus on exhibiting transparency, warmth, honesty, and reliability.” (Gartner)
Severe non-compliance, repeat offending or a single large-scale offence can leave companies with no other option than to close entirely.
The impact of siloed data
Data silos are unwanted for a variety of reasons. They can reduce data flow across an organisation, impacting productivity, stretching timelines for deliverables and increasing costs. Why is this? Because when the same data is stored in multiple different locations, the storage, maintenance and backup costs multiply in kind.
If business areas cannot access all the data they need to perform a task, different departments will likely create their own versions of the data, and therefore different versions of the truth will appear. Having multiple versions of the truth requires a deep dive to identify the correct version. It’s the opposite of what businesses are trying to achieve, resulting in wasted time, effort and money; all of which could have been spent on developing new products or services.
Worse still, if a company cannot effectively track their data, it will also become doubly difficult to keep the data in line with the ever-changing regulatory requirements, impacting its decision-making capability.
According to an article in Forbes, A study from the Harvard Business Review discovered that data quality is far worse than most companies realise, saying that a mere 3% of the data quality scores in the study were rated as “acceptable”.
Data governance and unstructured data challenges
Data governance may sound like a complicated matter, but its simple function is to understand data as a business asset. Just like any other asset, data must be carefully managed.
Granted, not all unstructured data is key to the management and provision of quality services and products. Compliant firms must ensure that each business area completes and maintains an Information Asset Register (IAR) so that all key unstructured data, inputs and outputs are documented and understood. When something goes wrong, an up-to-date IAR is a company’s first line of defence.
An IAR contains several types of information, such as the document type, its usage, and whether it contains personally identifiable information. Local data management procedures must be adopted to review the information held in IARs on a regular basis. For example, if a data file passes its agreed retention period, the data holder must delete it as soon as possible. Software solutions are also key. Dynamic and tailored software can seamlessly integrate into a firm’s APIs, identifying data silos and bringing all unstructured data back under control.
As with all worthwhile data governance strategies, knowledge is key. Firms must know their data. Documenting unstructured data is key to the success of that. This starts with improving data governance, which is only made possible by software solutions that can detect unstructured data.
If firms follow these rules and implement the right solutions, they can follow regulatory requirements and avoid major crises, both reputational and financial.
To find out more about the steps you can start to take to tackle your unstructured data and increase compliance, watch our free Pigsty to Piggybank.
Dufrain offers several accelerators and solutions that can be used individually or in combination to help you on your path towards data transformation. Contact us to learn more.
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To find out more about the steps you can start to take to tackle your unstructured data and increase compliance talk to the team today
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