New data protection regulation is necessitating a fundamental shift in business operations and relationships; the situation presents both a plethora of challenges within traditional business frameworks, and the opportunity to greatly enhance operations through the adoption of innovative solutions to aid in GDPR compliance. Those who most effectively adapt will inevitably be the ones who are best equipped to thrive in this new regulatory landscape.
What is GDPR, and Why is it Important?
As of May 25, 2018, businesses operating within Europe are now subjected to the world’s most stringent data protection policies, known as General Data Protection Regulation (GDPR). The purpose of GDPR is to update and standardise data protection laws across Europe, ultimately designed to provide greater protection and rights of individuals over their own personal data. However, the resulting necessary process and governance changes present businesses with significant operational challenges.
All companies, organisations and even individuals who are ‘controllers’ or ‘possessors’ of personal data are required to comply with the regulations by suitably adapting their data management operations and practices or face being fined up to €20 million or 4% of the organisation’s total turnover (whichever is greater). Facebook’s access token-related data breach late last year is a case in point, where the corporate giant faced a potential fine of $1.6bn. That’s no small change. The punishment is severe, and the ice is thin; all it takes to bring down the wrath of the regulators on the whole global organisation is just one employee in one company office processing one set of personal records in a non-compliant way.
GDPR is undoubtedly a step in the right direction towards protecting individual liberty and combatting data misuse, however the new regulation is necessitating a fundamental shift in business operations and relationships which traditional frameworks are inherently struggling to adequately facilitate.
Effects on Business Operations: The Cost of Compliance
Operations involving the collection, management and sharing of personal data have had to be overhauled in order to ensure compliance with GDPR; in the process exposing the fundamental weaknesses of traditional operational mechanisms- which are still yet to be effectively addressed.
Under GDPR, companies are compelled to consistently re-examine the security measures put in place to prevent and react to data breaches. If there is a breach, the organisation is liable to be fined. However, the GDRP has not had the desired effect on this front thus far; in fact, according to law firm EMW, data breach complaints have increased by a concerning 160% since the enforcement of the new regulations. Breaches often occur from the use of unsecure archaic communications and data transfer systems (such as email or cloud services), which are prone to hacks or human error. It’s therefore clear that the problem of data security lies more within the fundamental challenges of traditional of business operations, rather than a lack of a willingness to comply.
As part of the new regulation, all company departments are required to assess their data management and governance procedures and update them to be more effective where possible. It will be necessary to map all company-held personal data and be able to clearly answer questions on-demand regarding where a certain data set has come from, who can access the data and where it resides. This will require the constant complex and comprehensive mapping of the company’s personal data, often across boundaries; traditional solutions such as manual databases are therefore inadequate due to the high possibility of human error and incomplete information.
Furthermore, the costs of enhanced data protection measures are placing an added financial burden on companies, who can easily become less competitive under the challenging circumstances.
Those who can most effectively adapt will inevitably be the ones who are able to thrive in the era of the world’s most stringent data protection policies. But adapt how?
Loyakk’s Solution: Compliance through Innovation
Archaic systems, such as email and cloud services, are plagued by security weaknesses and the high possibility of human error, making them incompatible with the compliant sending of sensitive data. A new era of enhanced data protection as outlined by GDPR, therefore, will require the next generation of business interaction mechanisms.
Loyakk’s next-gen business relationship platform is being created with blockchain at its core in order to facilitate ultra-secure, permissioned and verifiable data management, transfer and governance; the solution is therefore highly GDPR compliant by its very nature.
New data protection regulation is necessitating a fundamental shift in business operations and relationships; the situation presents both a plethora of challenges within traditional business frameworks, and, for those most willing to adapt, the opportunity to greatly enhance the functionality and security of their operations through the adoption of innovative solutions which can greatly aid in GDPR compliance.
Join me in my next Loyakk instalment as we explore how the Loyakk platform can solve many of the potentially crippling problems brought about by GDPR.
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Disclaimer: this is not financial advice in any form, it is my opinion and insight based on research and you should always do your own research before committing to anything financially whatsoever.