GDPR: When should my business get started?
This article is directed to companies who might be handling data from European citizens, who are looking at getting acquired, or who are selling their services to a company with attachment to the EU.
You might have heard about the General Data Protection Regulation (GDPR), a EU legislation that has the potential to significantly change how businesses of all sizes store and protect their data. It's intended to both strengthen data protection in the European Union, and the export of personal information outside the continent. As such, it's relevant to any SaaS business storing customer data around the globe.
Once GDPR goes into effect this coming spring, the effects of noncompliance could be significant. Relevant organizations who are not in compliance will have to pay up to 4 percent of their annual revenue or 20,000,000 Euro, whichever is highest. The law is set to become active on May 25, 2018, following a two-year transition period that began after it was first adopted in April 2016.
What does GDPR compliance entail?
In its entirety, the regulation is complex. Almost 100 individual articles go into depth about the details, which range from the definitions of data rights to reporting responsibilities on behalf of the organization in question. In fact, that complexity may be why SaaS businesses like yours have stayed away from ensuring compliance to this point.
To get started in the right direction, consider the below a brief examination of the steps needed toward compliance. These include:
- Understanding your internal data flows. Before even starting to take steps toward data protection, you have to gain an understanding of how data flows in your organization. A formal evaluation can help you understand both daily processes and potential vulnerabilities.
- Understanding your data access privileges. Who in your organization currently has access to sensitive data, and why? An easy step toward GDPR compliance is limiting access to sensitive information only to those who need it.
- Building the right policies. Your company should have set written policies in place that are designed to not just limit access, but ensure data privacy and monitor data quality in ways that can be enforced across the organization.
- Training your employees. Systematic processes are only as secure as the professionals in charge. Anyone who handles sensitive data needs to be trained on how exactly to approach it, along with secure ways to share as necessary (and possible).
- Building a breach and vulnerability response mechanism. Almost half of all cyber attacks target small businesses. Part of GDPR compliance has to be building a system that helps you not just detect vulnerabilities, but also react to breaches as necessary.
Of course, this is only a generalized list of the various steps needed for compliance. Still, it's a vital first step toward ensuring you are on the right track for the all-important May 25 date.
When should my business take action toward GDPR compliance?
The answer to this question is deceptively simple: the time for GDPR compliance is now. The actual implementation of the new regulation may still be months away, but the complexities involved require a head start to make sure that when May 25 comes around, your company is ready for a changing environment.
Many businesses, especially those in the SaaS space, have already taken action. That's because they are essentially data operations, relying on sensitive subscriber information as a core part of their business model. These businesses have made significant process toward becoming compliant before the deadline next spring.
Take another look at some of the steps required for compliance outlined above. None of these can be implemented within a few days or even weeks. Training and policy building, especially, can take months. That's why taking action now is absolutely crucial to make sure that once the GDPR becomes active legislation, your business is prepared.
Acquisitions in the age of GDPR
Compliance with new data protection regulations becomes especially important for tech startups looking to get acquired by bigger companies. Corporations like Microsoft, Google, and Facebook are already compliant ahead of its implementation date; in fact, they're beginning to offer pathways to compliance for businesses using their services.
When these tech giants look for acquisitions, they have to keep data security in mind. They are naturally inclined to protect their data and minimize their vulnerabilities, which is why they will likely shy away from smaller businesses who are not compliant and will put themselves at risk.
Come 2018, these corporations might think twice about acquiring a startup that is not yet compliant. While some room for adjustment always exists, the need to understand and begin to enforce GDPR regulations only becomes more pressing should your business look or hope for acquisition in 2018 and beyond.
What you can do to get ready for GDPR now
The regulation is right around the corner. In just a few months, every piece of data you hold from a citizen of the European Union will be subject to standards much stricter than we have experienced in the digital age. Is your organization ready for that change? If not, now is the time to get started.
A thorough data audit should be followed by an assessment of current vulnerabilities, which includes access of key personnel to your various sensitive data files. Reporting structures may need to be revised, as do security policies designed for previous regulations. Training and automated or standardized response mechanisms can minimize vulnerabilities moving forward.
The key is to start paying attention. Even before the Holidays, begin to assess your needs, and work your way toward GDPR compliance. The earlier that process can start, the more likely you will become to not just set yourself up for success, but also keep all avenues open to growing your business.