Does Your Digital Transformation Breach GDPR?


Insights for ProfessionalsThe latest thought leadership for Management pros

Thursday, March 25, 2021

Digital transformation needs to be a priority for modern businesses, but you also need to be sure your efforts on this front don't create other issues, such as non-compliance with data regulations.

Article 4 Minutes
Does Your Digital Transformation Breach GDPR?

Digital transformation has become a vital goal for many modern businesses. Gartner research has shown that 91% of organizations are engaged in a digital initiative of some description and 87% of senior company leaders see digitalization as a priority.

There are many benefits to be gained from keeping up with fast-moving digital trends in order to stay relevant in the modern corporate environment. According to Deloitte, 'digitally mature' firms can expect to see benefits like:

  • Improved product quality
  • Higher customer satisfaction
  • Better financial performance
  • Reduced environmental impact
  • Increased workforce diversity

The importance of digitalizing key business processes and functions became particularly clear during the COVID-19 pandemic. Organizations that were prepared for remote working and able to give their employees digital access to the tools and resources required to do their jobs were better-placed to succeed during the health crisis.

However, it's also important to be aware that digital transformation can raise certain risks, such as non-compliance with modern data protection laws like the General Data Protection Regulation (GDPR). All businesses operating today need to be not only familiar with this and other data laws that affect them, but prepared with a plan to maintain compliance during times of rapid technological change.

Data legislation is changing business

Accelerating digital transformation in recent years has been accompanied by a clear trend of increasing regulatory pressure. This is exemplified by GDPR, which was introduced in the European Union but also applies to any organizations that offer goods or services to EU customers. The California Consumer Privacy Act (CCPA) is the strongest example of how legislation in the US is evolving to give individuals more control over their personal data and privacy.

For businesses, these changes in the regulatory landscape have had clear repercussions in terms of daily operations and core processes. For instance, in the post-GDPR world, you have a legal obligation to report personal data breaches to the appropriate supervisory authority within 72 hours of becoming aware of it. You also need to have a process in place to record any personal data breaches.

But going deeper than this, it appears that regulations such as GDPR and CCPA have affected how many organizations perceive the issue of data privacy.

According to Raef Meeuwisse, author of Cybersecurity for Beginners and ISACA expert speaker, just a few years ago it wasn’t uncommon for mid-sized companies to have no privacy policies or standards in place, but that's becoming increasingly rare today.

"The uptick in privacy regulations and potential fines seems to have worked as a wake-up call for organizations to treat their duties of care for personal information more seriously." - Raef Meeuwisse


Is digital transformation raising your non-compliance risk?

Given the increasing emphasis on data privacy - from both a regulatory and a business perspective - it's important to ask if your efforts to keep up with trends in the digital space are putting you at risk of non-compliance with regulations like GDPR.

Giving your customers a range of ways to keep in contact with you - via social media and mobile apps, for example - is one way to turn digital innovation to your advantage, but you have to show caution when it comes to collecting and storing personal data. A key principle of GDPR is that organizations must have a lawful basis for processing people's information.

If you're using digital touchpoints to collect information on your customers but you fall short of GDPR's definition of a lawful basis for doing so, you could be at risk of penalties.

Another key consideration is ensuring that you're efficiently managing the data in your possession and that you're able to access it when necessary.

Many businesses have put cloud computing at the heart of their digital transformation efforts, but cloud storage of customer data mustn't come at the expense of visibility or control. GDPR gives consumers the right to know what companies are doing with their personal details, to access this data and to have it rectified (if it's inaccurate) or erased.

However you choose to store your data, it's vital that it's managed in a way that ensures you can comply with these rules.

Staying in compliance

It's wise to be proactive and take steps to ensure you're keeping up with the latest data privacy rules, and your digital transformation isn't putting you at risk of fines or sanctions for non-compliance.

You might want to consider:

  • Appointing a data protection officer who can assume responsibility for keeping up with legal requirements and ensuring the business is compliant
  • Drawing up dedicated data privacy policies that make your processes and principles clear to company directors, employees and customers alike
  • Following a strict due diligence process every time you start new vendor partnerships, to avoid being held liable for poor data practices by third parties

In an era of rapid digital transformation - which shows no signs of slowing down in the near future - implementing strict data privacy procedures that make sense for your company and keep you on the right side of the law is essential.

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