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Digital transactions are increasing rapidly and more people than ever are using these platforms. Statutory & Regulatory bodies across the world are continuously protecting this digital information of the users from mishandling or theft. Data Protection law in European Union is even more stringent now after GDPR compliance came into force. Purpose of all this being to safeguard interest of the end users.
Compliance Frameworks are sets of guidelines and best practices. Organizations follow these guidelines to meet regulatory requirements, improve processes, strengthen security, and achieve business objectives. Non-Compliant organizations face security breaches. When a company suffers a security breach, it is often difficult to quantify the totality of the damage, in part because there are so many potential financial consequences. Some of the biggest security breaches in recent years are:
Payment Card Industry Data Security (PCI-DSS) : Organizations that handle cardholder information for major debit, credit, prepaid, e-purse, ATM and POS cards fall under this regulation. These compliances results in tapping the financial frauds, primarily through protecting debit/credit card and account information of the customers. Noncompliance to PCI-DDS can cost between $5,000 and $100,000 per month as fine.
Health Insurance Portability and Accountability Act ( HIPAA): This bill puts in place many regulations regarding the security of patient data. Companies that handle healthcare data, from hospitals and clinics to insurance companies, are required to comply with HIPAA regulations. Penalties for non-compliance can range from $100 to $50,000 per violation, with a maximum penalty of $1.5 million annually
Sarbanes Oxley Act (SOX) : It is designed to protect investors and the public by increasing the accuracy and reliability of corporate disclosures. This act requires companies to maintain financial records for seven years. Affected companies include U.S. public company boards, management and public accounting firms.
Federal Information Security Management Act ( FISMAA) : The Federal Information Security Management Act of 2002 treats information security as a matter of national security for federal agencies. Comprehensive framework for ensuring the effectiveness of information security controls over information resources. It requires each federal agency to develop, document, and implement an agency-wide program to provide information security for the information systems that support the operations and assets of the agency.
General Data Protection Regulation(GDPR) : It aims to protect citizens in the European Union (EU) from data breaches. The GDPR applies to all companies processing personal data for people residing in the EU, even if that company is not physically located or based in the EU. Companies that fail to comply can face massive fines equaling four percent of their global turnover, or 20 million euros, whichever is higher.
Gramm Leach Bliley Act (GLBA) : This compliance is a United States federal law that requires financial institutions to explain how they share and protect their customers private information. It requires financial institutions that offer consumers financial products or services like loans, financial or investment advice, or insurance to explain their information sharing practices to their customers and to safeguard sensitive data.
Enhanced risk management framework: Compliance regulations help in defining a proactive security and risk posture for any organization, and then translating that posture to actionable security controls.
Reassure Customers: Compliance regulations help in protecting customer data which helps in achieving customers trust and contributes to brand reputation.
Avoid breaches which in turn minimize losses: Regulations prevents breaches, which can cost millions of dollars and dent organization's exchequer. Due to the data breach, many companies end up losing revenues in sales, additional repair costs of the application and legal fees, all of which can be avoided with the right preventive measures.
Organizations have been earnestly taking precautionary measures against risks, continuous compliance of their environment and proactive IT operation processes. Since each major security standard involves an evolving set of specific requirements, achieving security compliance can be complicated, costly and challenging.
Achieving compliance within a regulatory framework is an ongoing process. Organizations, environment is always changing, and the operating effectiveness of a control may break down. So, choosing an appropriate compliance policy, applying effective controls, regular monitoring and reporting is a must. An automated compliance monitoring can be the solution. Data analytics are now well established as a very effective way to monitor and test many forms of transactions and other activities that are impossible to examine manually.
In summary, we understand that security non-compliance can cost heavy to business and its reputation. So, to the online platform this is not a choice anymore. Based on the nature of business and the geographies of operation though analysis is needed to understand and apply the security compliances. Continuous evolving strategy should be planned to ensure the business is always complied to the latest compliance and technology needs.