In the current digital business landscape, data is everything. From minor transactions to major behavioural changes, data is becoming central to marketing and strategy. Businesses use consumer data to improve customer experience and refine their marketing strategy.
However, there are also growing fears around data compliance, consent, and intent. Customers need to trust that their personal information will not be sold, leaked, or misused. This is where customer data compliance comes in.
Companies need to adhere to ever-changing regulatory and compliance standards, but this can be an overwhelming and time-intensive task. Many businesses simply don’t know where to start. This article will introduce six best practices to ensure data compliance for your business.
In this blog, we'll cover:
Customer data compliance, or data protection compliance, is an all-encompassing term for the practices and industry standards in place to ensure customer and company data is secure. To be compliant means following these regulations to protect data from theft, misuse, or loss.
A key element of customer data compliance is tracking the type and quantity of data being stored and how that stored data is managed through its lifecycle.
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There are numerous industry or location-specific regulations regarding data safety and privacy. Here are some of the most common compliance regulations:
The Health Insurance Portability and Accountability Act (HIPAA) of 1996 is a federal law regulating the ways that sensitive patient health information is handled by businesses and providers. A HIPAA violation, then, means that an organization has failed to comply with HIPAA rules and private health data has been wrongfully disclosed.
The Cybersecurity Maturity Model Certification (CMMC) was released by the Department of Defense (DOD) to ensure appropriate levels of cybersecurity and cyber hygiene of the Defense Industrial Base. All companies doing business with the DOD must be CMMC certified.
Why is data compliance important?
Organizations need to take data security and compliance seriously. For one thing, compliance is crucial for protecting customers’ privacy and maintaining trust. Customers are more likely to trust a company with a track record for handling personal information safely and responsibly.
Aside from maintaining customer loyalty and reducing churn, there are other business benefits to complying with GDPR or CCPA regulations. It also reduces the risk of reputational and financial damage that would result from a data breach. Furthermore, a compliant organization with established processes for data handling is more likely to be resilient and nimble—meaning faster recovery if something unexpected happens.
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It is essential to keep a record of all data protection measures and audit procedures—the more detailed, the better. Doing so ensures that a single employee leaving won’t derail the entire organization, as all relevant information about compliance activities is permanently held.
It is good practice to list all of the compliance requirements which apply to your organization specifically. If you are operating in New Zealand, for example, you would have to know about regional regulations associated with the .nz domain and any data compliance regulations.
A comprehensive compliance activity record is also a testimony to the company’s good-faith efforts to comply with regulations. This is important, as regulators can soften punishments for good-faith exceptions.
Furthermore, auditors require detailed records in order to evaluate the controls you have in place as a company. You’re more likely to pass an audit if you have sufficient evidence that the organization takes data security seriously.
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In today’s digital age, many users are uncomfortable with how much data companies collect and store about them. It is important, then, to clearly communicate what data you are collecting and capture consent from your customers. A bespoke consent and preference management solution could make it easier for customers to update and manage their preferences.
Think about every detail of the customer experience. If your business uses hosted VoIP phone systems for communication, the stored call data must adhere to compliance regulations—make sure that customers are able to withdraw consent if they do not want their data to be stored.
Here are some terms you should know when it comes to customer consent:
It’s crucial to manage privacy preferences in order to build a foundation of trust in your customer relationships. Consider employing secure and privacy-focused contact centre softwares to handle queries and build solid consumer relationships.
Data unification means consolidating all customer data—offline and online, front-end and back-end, structured and unstructured—into customer profiles. Bringing together all data from multiple channels and disparate systems into a single database is a huge step to organizing and benefiting from the data collected.
In short, this comes down to streamlining the way you extract meaningful insights from large amounts of data. For example, you may use call analytics solutions to organize various customer data gleaned from telephone communications into one accessible format.
When you know who your customers are and how they behave, you can categorize them into distinct profiles. These profiles unlock opportunities for personalization, such as individualized communications at key times or targeted birthday emails with personalized offers. These experiences are increasingly expected by modern customers, so you may want to use a customer data platform (CDP) to most efficiently unify your data.
Who is responsible for data compliance? As with any other business process, it's best practice to appoint a single person in charge to oversee all the moving pieces when it comes to compliance.
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This person should be looked to as an authority on data security and compliance standards, so credibility is important. Whether they are a Data Protection Officer, a Data Administrator, an enterprise security leader, or go by a different title entirely, the person in charge must have a direct line to executives and be able to influence others throughout the company to meet standards.
While one person should be a point person for data security, they should lead the way and instill good habits in all employees. For example, if employees are granted remote access to company resources and sensitive data, this should be done through a secure VNC such as RealVNC’s Remote Desktop Software for iPad. The point person can implement this and see that everyone is comfortable using remote access tools.
A Common Controls Framework (CCF) is a foundational framework of security processes and controls aggregated from the vast array of industry informational and privacy standards. Organizations should use a CCF to meet security compliance requirements with minimal risk of becoming “over-controlled.”
Implement a CCF focusing on the unique security of your organization. This will help guide employees, managers, and auditors through existing compliance assessments. By using a central framework, you can more easily identify gaps with other frameworks to be explored in the future. You can also analyze your current control set against existing standards, therefore bypassing the need for expensive readiness assessments.
Invest in customer data compliance
Falling short of customer data compliance can be a costly mistake for businesses. It can hugely affect your reputation and your bottom line. However, by sticking to these best practices and investing in up-to-date digital solutions where necessary, you can ensure customer data compliance for your business. In the long run, your balance sheet and your customers will thank you.