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Companies in highly regulated industries are subject to a series of requirements that dictate the proper ways to handle, store, and protect sensitive information.

Why It Matters: Paying strict attention to multiple overarching considerations helps companies adhere to industry regulations. Oftentimes, these mandates overlap to ensure coverage as long as they are addressed. However, the consequences of falling out of compliance are significant.

  • Industries like healthcare, finance, and insurance access customers’ most sensitive information.
  • Failure to meet data security regulations results in fines, penalties, and loss of trust from consumers.
  • These comprehensive data security regulations are in place to protect consumers.

Defining Major Regulations

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Which specific regulations apply to your company depends on your industry and location. However, there are often intersecting similarities that bleed over from one regulation to another. And while there are differences in the specificities of each regulation, monitoring these broad considerations increases your capacity to adhere to applicable regulations.

With that in mind, we’ll be discussing three salient regulations to illustrate how these considerations can influence your ability to remain compliant.

SOX

The Sarbanes-Oxley Act (commonly abbreviated SOX) was passed in 2002 in response to a few high-profile accounting scandals in the years prior. It contains 11 sections aimed at protecting investors, shareholders, and the general public from corporate reporting of fraudulent financial records.

GDPR

The General Data Protection Regulation (GDPR) is a European Union (EU) mandate that addresses how companies either located in or doing business within the EU handle and store sensitive customer data. The regulation addresses a series of key principles, including transparency of how personal data is processed, limitations for collecting personal data, and how that data is stored and secured.

HIPAA

The Health Insurance Portability and Accountability Act (HIPAA) was signed into US law in 1996. It stipulates the flow of healthcare information, including how personally identifiable information (PII) can be stored and handled. In general, it prohibits the release of personal healthcare information without the knowledge or consent of the individual.

The Risks of Falling Out of Compliance

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Companies stand to incur stiff fines and penalties if they are noncompliant with data security regulations. For example, here are possible penalties for failing to meet GDPR requirements:

“For especially severe violations, listed in Art. 83(5) GDPR, the fine framework can be up to 20 million euros, or in the case of an undertaking, up to 4% of their total global turnover of the preceding fiscal year, whichever is higher. But even the catalogue of less severe violations in Art. 83(4) GDPR sets forth fines of up to 10 million euros, or, in the case of an undertaking, up to 2% of its entire global turnover of the preceding fiscal year, whichever is higher.”

Aside from the financial hit, companies also stand to lose customer trust. Healthcare, finance, and insurance companies are privy to their customers’ most sensitive information. Should this information be exposed, the customers stand to incur longstanding problems that are very difficult to rectify. A company that proves unable to properly handle sensitive data isn’t likely to be trusted with it again in the future.

So, what can you do today to strengthen your data security strategy and work toward compliance?

These five considerations must be addressed to remain in compliance with regulation guidelines:

  1. Locate Regulated Data
  2. Maintain Consistent Reporting
  3. Update Documentation of System Data
  4. Demonstrate a Sufficient Data Protection Strategy
  5. Establish Emergency Protocol

1. Locate Regulated Data

Companies operating in regulated industries have access to numerous types of information, but not all of this information is regulated. When it comes to storage, documentation, and other considerations, it’s critical to know which types of data are covered by regulations.

Recognizing which kinds of information need to be strictly guarded, versus other kinds that need moderate protection, makes it easier for companies to allocate resources where they’re needed most.

For example, SOX relates to financial records, HIPAA applies to healthcare data, and the GDPR pertains to identifiable information. Locating and identifying regulated data helps direct your efforts so you can secure your records.

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2. Maintain Consistent Reporting

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A major tenet of most data security regulations relates to reporting. Yet it’s up to each individual company to develop documentation to prove they are abiding by applicable regulations. The failure to do so can result in falling out of compliance, so it’s important to have the infrastructure in place to provide continuous proof of proper practices.

Utilizing a Salesforce dashboard that provides metrics and reports is incredibly beneficial when it comes time to prove your adherence to regulatory requirements.

These records must be consistently maintained and stored for the period of time dictated by the particular regulation. And while there are differences in the specifics, the concept of recording and reporting applicable data is consistent across many data security regulations.

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3. Update Documentation of System Data

Reporting is an essential aspect of regulatory compliance, but it’s not the only reason to pay strict attention to organization. Companies are often tasked by regulators to provide documentation of data stored within their system and how it’s being handled.

Auditors might request proof of how long certain data sets have been stored, what types of information are kept on file, and specific details concerning targeted records.

Proving the proper infrastructure is in place to protect sensitive information is only one aspect of appeasing regulatory auditors. The data must also be properly managed.

For instance, the GDPR features a principle known as the The Right To Be Forgotten, which stipulates that companies must delete customer data if requested by the individual. This capability must be proven to auditors to remain compliant with the GDPR.

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4. Demonstrate a Sufficient Data Protection Strategy

Finance, healthcare, and insurance companies are subject to data security regulations because of the level of sensitivity associated with the information they maintain to serve their customers. These consumers place a lot of trust in these companies by offering this data. Substantial data security measures must be instituted to protect this data.

Companies in regulated industries must be able to prove sufficient data security protocols to protect the sensitive information they are entrusted to handle.

The ability to demonstrate strong data security measures does a lot more than secure regulatory compliance. These capabilities also prevent incredibly costly data loss events and breaches. Plus avoiding negative outcomes saves money and reinforces consumer trust.

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5. Establish Emergency Protocol

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Data security is never guaranteed. Even companies that demonstrate strong security strategies and use cutting-edge security tools are still liable to experience a data breach. There are simply too many threats to guarantee 100% safety from cybercrime.

That’s why having a robust backup and recovery strategy is essential to restore operations as quickly as possible and recover lost data.

One significant to these emergency situations is the requirement for the company to report any breaches, losses, or corruptions to applicable regulators and government agencies. SOX, HIPAA, and GDPR all require disclosure after a data breach occurs. Regulated companies must incorporate these disclosures into their emergency protocol so everything can be handled quickly to avoid legal culpability.

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Next Step…

The importance of a reliable data backup and recovery strategy simply can’t be understated. Failing to source a comprehensive tool leaves you vulnerable to costly downtime and falling out of compliance with key regulations.

Download our ebook, “Why You Need to Start Backing Up Your Salesforce Data…Now,” to learn more about how to protect your most sensitive data.

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FAQs

What steps toward compliance can be taken today?

The very first thing you can do is identify the regulations that apply to your company. Your location and industry will be a major deciding factor for this. If you have in-house counsel, consult them as to which laws apply to your business. Taking stock of your protected information is the next step. Sourcing powerful automated tools like a reliable data backup and recovery tool also helps secure your restricted information.

Do regulations change over time?

The general tenets of these regulations are likely to stay mostly the same. However, new advancements in technology must be factored into these legacy regulations. It’s important to stay up-to-date on any new developments in existing regulations while also keeping an eye out for new requirements. No one can predict the future, which is why these laws are fluid in the scope of applications and breadth. It’s your responsibility to stay on top of these requirements and properly protect your confidential Salesforce data.

Why is it so important to remain compliant with data security regulations?

Business entrusted with the sensitive data of their customers have a duty to protect this information. Failing to do so, and thereby falling out of compliance with applicable regulations as well, will result in stiff fines and penalties. But perhaps more damaging are the negative effects on the reputation of the business. Customers who are given the choice between handing over sensitive information to a business with a history of compromised environments or another with a strong track record of data security are far more likely to work with the secure company.

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