May 23, 2023

Stubborn Obstacles to GDPR Compliance

The launch date for the European General Data Protection Regulation is just two months away, so companies that are staying on track to success deserve some preliminary congratulations at this point. Well done! Even if every single component of the law isn’t fully in place just yet, forward motion is to be commended, and a great deal can be accomplished in the remaining two months.

But the home stretch is also the point at which some of the best-laid plans go awry. If every mile marker on your roadmap to compliance has been hemmed in by a tight timeline, missing just a few key milestones may be setting you back. And if you’ve encountered an unanticipated obstacle that’s essentially holding you at square one, there’s still time to push that stone out of the way and move forward. The most common hold-ups are listed here. If these look familiar, it may be time to reach out for support.

“We didn’t have clients in the European Union…But then we did.”

If your entire client base and all partners, vendors and data stakeholders live outside of the areas overseen by the GDPR, you may have removed this regulatory concern from your list of priorities altogether. But things change. If you need to revisit your data management protocols due to growth in your company or the arrival of new customers, it’s not too late. Keep in mind that EU citizens own their data, and accelerate the path to compliance, extensions, and appeals.

“Our notification procedures are not in place or not reliable.”

The GDPR requires proper notification of affected parties in the event of a breach or data exposure. But for some organizations, this is easier said than done. Just because a notification system is in place does not mean it works or can be counted on to activate at any hour of the day or night. If you lack confidence in your system for bureaucratic or technical reasons (for example, your notifications rely on a staff too small to connect with your growing customer base), tools are available that can close the gaps.  

“We’re having issues related to privacy by design and default.”

This obstacle can arise when a company expects to develop, customize, or design a proprietary app from the ground up for data protection and management purposes, and the product is not slated to appear before the steadily approaching deadline. Some outside guidance can accelerate the software development process.

“We haven’t hired a DPO.”

This new employee should have a respected place at the leadership table and should be able to make data-protection decisions that are judicious and implementable. He or she should be able to identify issues before they become problems, lead a team if necessary, and have the technical experience to make sound recommendations. Identify the roadblock that’s keeping you apart from this person so you can remove it. Do you lack the budget to hire a skilled expert? Are you having trouble with sourcing and recruiting? Or are you not quite sure how to evaluate candidates? In all cases, outside perspective can help.


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Frequently Asked
Questions

What type of compliance standard can you help with?

We help our clients based on their needs. The majority of our contracts involve SOC-2, HIPAA, and most recently GDPR. Feel free to ask us if we can help with your particular case. If we aren't able to, we can most likely recommend you to someone who can.

How long does a SOC 2 engagement usually take?

We move as fast as our clients are able to make progress. Our fastest client to date got their SOC-2 Type I four months after signing our engagement letter. That record is up for grab if you are up for it.

In our experience however, it takes 6-9 months to achieve a SOC-2 Type I,  and 3-6 additional months to obtain a SOC-2 Type II report.

Which standard do you follow for your security policies?

All of our security policies follow the ISO-27001 standard. The Confidentiality, Integrity, and Availability standards cover the range of standards we like to work with for SOC 2.

Why do we have to become SOC 2 compliant if we are relying on AWS which is already compliant?

SOC 2 stands for Service Organization Control, meaning your clients are interested in understanding your controls, not your hosting provider’s control. As part of your vendor assessment we recommend reviewing AWS’ SOC 2 report, but relying on their report is not enough to become SOC 2 compliant.

Who is behind SOC 2?

The American Institute of CPAs. The AICPA is an established and respected organization that provides two forms of audits to companies that demonstrate evidence of a secure data-protection infrastructure. A Type I is a point in time audit that addresses the company’s description of its system, the suitability of the system’s design, and the effectiveness of its internal data controls. A Type II report happens over a period of time and emphasizes design and also focuses on the validity of the company’s controls.

Are SOC 2 reports a legal obligation?

No, but most enterprise level organizations that engage with sensitive data (again, almost all of them) have an obligation to their stakeholders to prove due diligence regarding data security, which means they’ll want to vet their service providers using this tool. SOC 2 can help these prospective service providers set themselves apart from the competition. Just as important, a SOC 2 report represents a meaningful and respected signifier of trust.

What can happen to a company without a SOC 2 report?

A lack of a SOC 2 report won’t result in legal problems, but it can and will limit outside assessments of the company’s commitment to data security. When large-scale clients look for providers, or large-scale backers look for a likely return on their investment, they don’t want concerns about security to stand in the way. Trust is a chain made of links that have each been put the test and have proven their ability to withstand pressure and scrutiny. Company leaders are wise to let SOC 2 auditors apply this pressure so their clients and backers don’t have to.

When is it too late for a SOC 2 audit?

Never. Even companies that have been in business for years but have never obtained a SOC 2 report can—and should—take steps in this direction now. Being compliant with SOC 2 can open the door to a broader base of more significant clients and larger contract opportunities. That being said, startups in the threshold of the marketplace, and new business owners who hope for an eventual public offering, should obtain a SOC 2 report during the development and financing process. By the time the company approaches Series B and C fundraising rounds, a report should be in hand.

How complicated is the auditing process?

The auditing process can be easy, or complicated depending on your level of preparation.

Preparing for the audit can take some time, attention, and the guidance of reliable data security experts. Don’t leave any part of this process to chance. Approach SOC 2 compliance one step at a time, and start by contacting a consulting firm with track record of experience in your area of the marketplace.