Why Data Governance is essential for GDPR Compliance

With the growing volume of data, consumer awareness of their privacy, and the complexity of global privacy regulations, any company handling sensitive customer, employee, or business data needs to protect it from GDPR and other privacy violations.

Why is GDPR important?

European Union passed GDPR (General Data Protection Regulation) in April 2016, and the GDPR went into effect in May 2018. It has since gained a reputation for being one of the most stringent data privacy laws around. Some of GDPR's landmark decisions have reignited the discussion about user privacy and its importance in today's data-driven world.?

In the fall of 2020, Germany's Data Protection Authority of Hamburg (HmbBfDI) imposed a $41 million fine[1] on Swedish retail giant H&M for violations involving the monitoring of several hundred employees.?

H&M violated GDPR's principle of data minimization[2], which states:

"1. Personal data shall be:

(c) adequate, relevant and limited to what is necessary in relation to the purposes for which they are processed (data minimization)."

With the monitoring, H&M's senior managers created detailed profiles of their employees, including personal information, to aid employment and performance decisions.?

Additionally, British Airways was fined $22 million[3] in October 2018 for a data breach. As a result, the data of more than 400,000 customers were compromised. After the dust settled, it was revealed that the company had not even implemented basic security measures such as multi-factor authentication.?

Thus, any organization that relies on the data of its customers and employees should adopt an employee/customer-first strategy. To address regulatory compliance such as GDPR, data governance, and privacy practices must be central to the vision of every modern organization. Before delving into the importance of data governance for GDPR compliance, let us first define "Data Governance."

What is Data Governance??

Data governance is a strategy that incorporates truth, integrity, and transparency as the foundation of a data management policy that encompasses stakeholders, technologies, and existing policies involved in data management and security. A data governance policy specifies where and how data is stored, who has access to it, and what actions can be taken with it. Risk assessment, compliance, and data governance are all components of a good data governance policy. Risk assessment and prediction drive compliance, which drives the governance program.

Data Governance applies to a wide range of data categories and classifications; however, GDPR focuses primarily on personal data and imposes stringent measures (see GDPR Article 25[4]). As a result, data governance can be used to protect personal data privacy.

How to ensure compliance with GDPR?

The United Kingdom's Information Commission Office (ICO) has published a document[5] outlining 12 steps for preparing for GDPR, including "information held by the company," "how to communicate privacy information," "data breaches," "data protection," and "ensuring international compliance." This is an excellent place to start for businesses looking for an effective data governance strategy.

Besides the full text of the regulation, here are some key concepts. As a starting point, the data controller determines the purpose and method of personal processing data. If you decide why and how to handle data, you are the data controller. Typically, a data processor is an independent third party acting on behalf of a data controller. Both the controller and the processor must comply with applicable statutory and regulatory requirements. GDPR compliance checklist[6] suggests following the standard guidelines for data security.

1. Take data protection into account at all times, from the moment you begin developing a product to each time you process data. (Data protection by design and by default)
2. Encrypt, pseudonymize, or anonymize personal data wherever possible.
3. Create an internal security policy for your team members, and build awareness about data protection.
4. Know when to conduct a data protection impact assessment and have a process to carry it out.
5. Have a process in place to notify the authorities and your data subjects in the event of a data breach.

Conclusion

The critical takeaway from H&M and British Airways' previous black swan events is that they could have avoided both of these situations if a data governance plan had been in place. If H&M's stakeholders had used a data governance solution, they would have had strict access control over the data's workflow. If British Airways had adequate security measures in place to protect their systems, they could have avoided the hefty fine.

Surprisingly, the term "Data Governance" does not appear anywhere in the official GDPR documents; however, as evident, it is at the heart of what the policy stands for. Organizations are no longer in a position to take every new privacy regulation by the horns or manually inspect and aggregate data, which can be time-consuming, as policymakers and governments rapidly adopt new standards, using GDPR as a benchmark. If the companies do not comply, they will face fines and harm their reputation.

A GDPR-compliant data governance transformation, like any other, necessitates a shift in business culture. Even though changing privacy regulations can hasten data governance transformation, creating an employee/customer-first approach and a responsible approach to data handling can serve as catalysts for the transformation journey. Organizations that have yet to embark on their journey should do so as soon as possible.

The key to GDPR data management is handling personal data, the purpose of data collection, and data usage. QueryPie[6] makes it simple for enterprises to comply with international privacy regulations by providing global policy enforcement, data masking policy, and audit logs.