IT compliance is the regulatory framework for companies relating to their information technology. Specifically, compliance regulations ensure businesses follow best practices to safeguard customer data and improve information security.
Regulatory requirements differ depending on country, industry, and other factors. Businesses in the UK must comply with UK, EU, US, and other laws, regulations, and standards. Compliance focuses on helping organisations from a top-down perspective to protect personal data, improve data governance, and reduce the risk of data breaches.
Different standards (outlined below), like GDPR, two International ISO 27001 protections, HIPAA, and PCI-DSS, regulate different industries and regions. Some regulations overlap, but each provides broad guidelines to follow. While a simple IT manager checklist might have been sufficient in years past, that is no longer the case. Now, compliance must meet standards set by various regulatory bodies.
Why IT Compliance Matters?
Now, we answer why IT compliance is essential to your organisation.
Risk Mitigation
Strict compliance requirements reduce the risk of security breaches, loss of customer data, or worse. Failure to protect critical infrastructure risks subjecting the business to claims for financial losses because of improper IT security.
Compliance is not only for regulations. Companies likely have internal compliance requirements and may have contractually obligated ones, too. The latter are stipulations regarding specific servers, software, systems, and procedures.
By combining regulatory compliance with internal and third-party compliance requirements, companies reduce security risks both top-down and bottom-up.
Operational Continuity
Business students often believe that the unique goal of a business is to make a profit. However, it can be fairly argued that the primary goal of a business is to stay in business. Because if this does not happen, there will be no future profits.
Operational continuity is highly relevant to IT compliance. Adherence to sensible standards ensures businesses stay within tried and tested IT policies. This protects against business catastrophes and extended disruptions.
Reputational Management
Brand reputation is built over many years. It is difficult to create but can disintegrate because of inferior policies, carelessness, or inattention.
By following industry regulations to protect customer data, brands protect their reputation from potential harm. Clients and partners trust that their data is safe. By protecting their reputation, they have continued confidence in their business dealings.
Key Components of IT Compliance
Here are the key components of IT compliance plans:
Data Protection – IT compliance requires adherence to data protection laws across various jurisdictions. For the EU, GDPR is relevant. Various US states now issue data protection regulations (a recent example is CCPA in California). When operating in their location, adhering to their respective data protection laws is necessary.
Network Security – Compliance standards mandate securing the network infrastructure. This includes using intrusion detection systems for better cybersecurity, file encryption as standard, and highly secure firewall protection.
User Access Control – It is necessary to restrict access to networks, apps, and storage systems to authorised personnel only. This includes using tiered security levels to limit network, folder, and file access via user access controls. This includes authentication systems, such as login credentials, fingerprint scans, and two-factor authentication methodologies.
Incident Response – A detailed, multi-layered incident response plan is required. This is developed and regularly updated to ensure relevance. Employees refer to and follow the incident response plan if a new cyber threat or live data breach occurs.
Types of IT Compliance Standards and Regulations
IT compliance standards and regulations fall into three broad categories. The various types of IT compliance standards are detailed below.
International and Industry Standards
ISO 27001: Two ISO 27001 international standards exist relating to information security management. The first is the original standard, and the newer one relates to IT-Grundschutz. They offer frameworks for IT security to provide adequate protection from digital threats.
PCI-DSS: The Payment Card Industry Data Security Standard (PCI-DSS) is required for businesses acting as merchants (even as a third party) and service providers (e.g. payment processors). The standard revolves around payment transaction information storage, processing, and transmission.
NIST: The National Institute of Standards and Technology’s (NIST) cybersecurity standard is used in the USA. It originates from the US Department of Commerce agency. Their security recommendations offer a risk-based approach following suggested best practices.
Sector-Specific Regulations
HIPAA: The Health Insurance Portability and Accountability Act (HIPAA) established the legal requirements for keeping patient data safe. Introduced in the US, it now encompasses healthcare providers, patient plans, and related services.
SOX: The Sarbanes–Oxley Act (SOX) established relevant internal control mechanisms and more transparent financial reporting requirements for public companies.
Regional Standards
GDPR: The General Data Protection Regulation (GDPR) represents data privacy and protection laws from the European Union. Issued in May 2018, its requirements include obtaining data consent, allowing individuals to see data held, and requesting data deletion. Also, any data breach must be reported within 72 hours.
CCPA: The California Consumer Privacy Act (CCPA) is the first large-scale state law protecting data privacy. At least 19 other states have since followed, including Colorado (CPA) and Virginia (VCDPA).
The IT Compliance Process
Below is a basic introduction to an IT compliance process:
Assessment
A compliance audit is required first. It confirms whether there are significant or minor gaps between current internal practices and necessary standards. The overall data handling, user access policies, network security, and other factors are evaluated.
Microbyte can complete a comprehensive compliance audit for your business. Get in touch to learn more.
Implementation
New IT policies, network management, user controls, and updated or newly required procedures are part of meeting compliance requirements.
For this implementation, it is best to integrate new software tools and other technologies to establish, meet, and maintain security compliance.
Monitoring and Reporting
Continual monitoring and regularly scheduled reports are needed for internal audits and to meet requests from outside regulators (or other third parties). Otherwise, an audit failure is likelier, suggesting a systemic issue relating to IT compliance.
Utilising software to automate the reporting process streamlines compliance tracking and prevents it from becoming burdensome.
Continual Improvement
Regulations do not exist in a vacuum. They are struck down, and others are set in their place. Because of this evolution, policies and software tools must strengthen, too.
Employees must receive updates on new security threats and training to manage revised compliance requirements. A periodic refresher about existing requirements is never a bad idea either.
Common Challenges in IT Compliance
Below are a few of the common challenges encountered with creating and managing robust IT compliance procedures:
Resource Limitations
A lack of available personnel causes some SMEs to struggle to meet regulatory compliance standards. Considering that large corporations often employ a team to satisfy this need brings the difficulties into stark relief.
Budget limitations for hardware, software, and ongoing training must be sufficient. Otherwise, it is better to outsource IT compliance to a qualified, managed services company like Microbyte.
Changing Regulations
Lapses in compliance occur easily. All that is required is an unnoticed regulatory change that does not result in new or updated procedures.
Alternatively, sloppy internal procedures can deviate from approved ones until compliance is negatively affected.
Technological Complication
Achieving IT compliance and remaining so is complex. While newer software has safe, practical IT procedures, that was not always the case. Particularly troublesome are legacy IT systems that are more complex to upgrade to newer solutions.
Alternatively, complex IT systems make 100 per cent regulatory adherence a minefield to navigate.
Tools and Best Practices for IT Compliance
Compliance Management Software – Use compliance tools that offer automation for compliance tracking and reporting purposes. This should include proper risk and compliance assessments based on international, regional, industry, and sector-specific standards.
Real-Time Monitoring Tools – Track and receive timely alerts for compliance violations using monitoring tools. Real-time updates ensure prompt responses. Patch management is also important to prevent known software vulnerabilities from remaining unpatched.
Best Practices – Regularly train employees to stay abreast of and adhere to IT compliance requirements. Schedule internal audits to maintain compliance with regulatory standards. Also, third-party audits should be scheduled to provide impartiality and a dependable second look.
Consequences of Non-Compliance
Financial Repercussions – Stiff legal penalties and substantial fines result from non-compliance. Sometimes, the fines amount to millions when the situation warrants it. Business insurance against operational risks may not cover these unexpected expenses or be insufficient.
Reputational Damage – Customers trust their data with businesses. B2B companies do, too. Non-compliance, possibly leading to a subsequent data breach, severely damages the company’s reputation. As a result, people and companies may choose to take their business elsewhere.
Operational Disruptions – A security breach creates a logistical nightmare and a potential interruption to operations. Systems and personnel can become overwhelmed dealing with the consequences of the data breach and the time to recover. During this time, customers may receive inferior service, affecting consumer ratings.
How to Stay Compliant
Keep Updated – Compliance regulations and standards are not stagnant. They are updated when requirements change, or obvious omissions get rectified. IT compliance teams must regularly look for changes to existing regulations and additional requirements, such as GDPR, which was introduced in 2018.
Proactive, Not Simply Reactive – Use a compliance calendar and reminder prompts to avoid missing important events. Automated software tools help to maintain adherence to regulations by surfacing relevant information quickly.
Continuous Training – Effective IT compliance requires ongoing training rather than a one-off approach. Inform employees that security awareness and IT compliance are prerequisites for your company.
Conclusion: Ensuring IT Compliance in a Changing Digital Landscape
IT compliance is necessary to establish acceptable security standards, enforce compliance, and ensure proper data governance. Compliance obligations relate to legal and regulatory requirements for IT networks, data protection, personal data, and risk management.
A compliance team must take a proactive approach to establishing and maintaining compliance with the regulatory bodies. Software tools, staff training, and a continually updated approach to compliance are needed. This can be overly burdensome for smaller organisations.
Microbyte offers compliance consultations, audit services, and subscription updates to ensure ongoing adherence to relevant regulations and standards. Because of the complexity and changing nature of IT compliance, it is better to partner with a managed service provider like us rather than try to go it alone.
