As stated in the survey conducted by Deloitte, 87% of the executives reported that the damage to the company’s reputation is more important than other strategic risks, and the absence of IT compliance can be the prime trigger.
The cost of implementing IT compliance is low compared to the severe hit to a company’s brand image and the penalty due to non-compliance.
Regulations of IT compliance vary by the industry you operate in, and it keeps changing. Regulatory bodies keep implementing and enforcing rules to add more security to the system. Organizations must be agile to stay up to date with the changes in the IT compliance laws.
As an industry expert, you must know which regulations to apply to your sector. Ideally, complying with the procedures is equally essential for every organization.
What is the Role of IT Compliance?
The task of IT compliance is to build a strategic, procedural, and technical framework that maintains and provides a system that adheres to both a company’s internal policies as well as external regulations and guidelines imposed upon the company.
IT compliance is a defensible mechanism to attain and establish a company’s ethical and legal integrity while meeting its business goals.
Organizations must provide compliance control relative to new systems implementations and existing systems.
What are the Key Benefits of IT Compliance?
1. Build Trust with Clients:
Trust is crucial for making long-lasting relationships with clients. When customers sense that the company is using a high standard of IT compliance software for protecting data, they start trusting it more. Customers want organizations to keep the privacy of their data. When a company meets customers’ requirements, they feel more secure about its services.
2. Raise Brand Reputation:
A company that follows IT compliance is considered a reputed brand in the market. Respecting compliance standards add value to the organization. It establishes an identity that the company is moving in the right direction and is following necessary legal requirements.
3. Avoids Penalty:
If the company is doing illegal practices, laws and orders have the right to stop them. Due to this, production stops, and people invested in the company have to suffer till operations resume – usually, it takes time.
4. Enhance Growth:
Companies adopting IT compliance have more opportunities to operate in geographic areas with specific compliance regulations.
Who Needs to Implement IT Compliance?
Ideally, the company management monitors the organization’s IT compliance with legal regulations. However, IT compliance responsibility can be assigned to someone familiar with industry-specific rules and relevant technical measures.
If the IT department is available within the organization, this task is assigned to them. The IT department designs IT compliance policies in coordination with company management. A policy management scheme is then implemented to monitor compliance with these policies.
Understanding Six Common IT Compliance Standards Subject to the Industry
1. GDPR for EU Citizens
IT compliance regulations imposed by European Union are known as General Data Protection Regulation (GDPR). Businesses must adhere to GDPR to protect data collected from EU citizens. If a company outside the EU wants to do business with EU citizens and access their financial information, it must comply with GDPR rules.
2. PCI DSS for Online Payments
PCI DSS refers to Payment Card Industry Data Security Standard. It is for regulating financial card information such as clients’ debit and credit card details.
Businesses taking online payments must comply with the PCI DSS rules while collecting, transmitting, and storing clients’ financial information. The aim is to secure clients’ data by either monitoring and looking for security threats or preventing access from unauthorized users.
3. SOX for Trading Companies
The Sarbanes-Oxley Act is the financial IT compliance standard. It is for publicly traded companies or businesses that are launching public offerings.
As per the standard, businesses must provide transparency of their financial information to their investors. The objective is to give investors complete and accurate information about the company’s financial status. So investors can make an informed decision about investing their money.
SOX tries to minimize the risk of accounting errors and fraud to give stakeholders safety of their money.
4. HIPPA for Healthcare
The Health Insurance Portability and Accountability Act is a federal law for maintaining the security of patients’ health records. As per the standard, hospitals and insurers comply with HIPPA regulations and have the right to access and transfer the data.
Medical information must be confidential and cannot be shared without the patient’s consent.
Companies must implement the necessary structure to prevent unauthorized access to electronically stored medical records and adhere to the rules.
5. GLBA for Financial Investments and Advisory Firms
The Gramm-Leah-Bliley Act (GLBA) is for financial institutions offering services like loans, insurance, and investment advice. Per the standard, institutions must disclose their information sharing policies to their clients and ensure the security of clients’ sensitive justify.
According to rules, companies must take clients’ permission to disclose their data to non-affiliate agencies. Businesses must use encryption while storing and retrieving clients’ data to safeguard against cybercrime. Implementing an IT compliance system must detect and remove any unauthorized access.
6. FISMA for Federal Agencies
The Federal Information Security Management Act is the standard for implementing a mechanism for protecting the sensitive data of numerous federal departments. Organizations can develop a system to verify third-party vendors by promoting relevant security software by promoting appropriate security software.
While government agencies must comply with FISMA standards, businesses associated with them must follow the same regulations.
Challenges in Implementing IT Compliance
- Regulations keep changing. Organizations must put a lot of thought and strategy into implementing refined laws without affecting the existing system.
- Showing constant transparency and accountability is mandatory, which is challenging without correct foundations, processes, and control.
- Innovation in technology, versatile environment, and operations lead to the IT compliance challenge. Effective compliance plans become more difficult to develop as goals become more complex.
- Efficient compliance involves everyone in the organization from top to bottom. All departments must be willing to accept change, which is impossible without employee training.
- Organizations are processing an increasingly large number of sensitive data, and cyberattack is the biggest threat. It is the company’s responsibility to protect their clients’ data while processing, not only for IT compliance but to protect their brand reputation and the ultimate success of their business.
- Maintaining third parties’ compliance in the supply chain is a challenge. Often the cause of vulnerabilities is due to third-party participants. It is the organization’s responsibility to make it right.
All public and private companies must adhere to IT compliance standards. Depending on the industry, each company is required to meet specific requirements.
Industries like healthcare, food, government, administration, finance, media, water supply, energy, insurance, information technology, and telecommunications are enforced with stringent IT compliance laws.
Service desk outsourcing companies like ours are helping organizations achieve a balance between achieving IT compliance and avoiding run-away costs.