Part 1: What is the EU General Data Protection Regulation and how does it affect your business?

Part 1: What is the EU General Data Protection Regulation and how does it affect your business?

In the past couple of months, you probably noticed an onslaught of emails in your inbox from addresses you don’t recognize telling you that they’ve “updated their privacy policy”. And if you’re on the business side of the spectrum, you’ve most likely been notified and called forth to comply with the EU General Data Protection Regulation (GDPR), which came into force across the European Union on May 25, 2018. But what is it really? What is its scope and what does it mean for smaller businesses?

You’ve been served: GDPR 101

The GDPR is a new standard for consumer rights regarding the personal data companies divulge to companies when they do business with the latter. It is essentially designed to give people more control over their data, as it compels organizations to secure clearer consent for using people’s information. It introduces tougher fines for failing to protect data.

The regulation harmonizes data protection across EU member states and brings in a number of key measures that include mandatory breach disclosure, the right to be forgotten, and the right to data portability. It applies to organizations, regardless of location, that are involved with business activities and transactions to individuals in the EU, or the monitoring of individuals as far as the activities take place within the EU.

While the GDPR has been imposed for almost a year now, it still leaves much to interpretation. Many companies are still catching up on its stipulations such as providing a “reasonable” level of protection for personal data. There are tons of other questions too, but for small- to medium-sized businesses (SMBs), what does the GDPR mean?

What does the GDPR mean for SMBs?

The GDPR impacts both data security and business outcomes for enterprises of any size, which means it also requires SMBs to manage their data flows, processes, and transfers. In this regard, SMBs are expected to measure the risks of their respective business practices over the privacy of their data subjects (i.e., customer or employee), align their interests with the rights of the data subjects, and provide proper documentation.

According to the regulation, SMBs or companies with less than 250 employees and an annual turnover not exceeding €50 million are given some exceptions under the GDPR due to the smaller risk that they pose compared to bigger organizations. For example, SMBs are relieved of maintaining a record of processed activities, and EU member states can determine whether SMBs or micro-enterprises are mandated to have a Data Protection Officer (DPO).

Companies with more than 250 employees need to maintain and keep more detailed records such as details of your organization, name of your designated DPO, the reasons for processing the data, a description of the data, how long they will be retained, and an overview of the security measures your organization has put in place. However, if your business, only processes EU residents occasionally, you may be exempt from disclosing all these added information.

It’s also important for SMBs to remember that the GDPR explicitly states that they need to provide the same level of detail to processing activities the same way larger enterprises do “if the processing it carries out is likely to result in a risk to the rights and freedoms of data subjects, the processing is not occasional, or the processing includes special categories of data or personal data relating to criminal convictions and offenses referred to in Article 10”.

Staying ahead

The good news is, the majority of SMBs are making the effort to protect their customer data. Since the implementation of GDPR, SMBs have been hiring the right people, considering security in their buying decisions, and are creating and revisiting data security policies on a regular basis. In fact, 61% of SMBs have an individual or team within their organization dedicated to security, privacy, and compliance. How can you ensure your business can stay compliant? First, you need to think about protecting your customer data because one slip-up can cost you up to $148 per record lost, or you could be compelled to shut your business down for good. Here are a few tips on how you can get a head start:

Only collect what you need – Have the proper knowledge about your data processing activities so you can come up with a tailored response to the rights of your customers. For instance, if your customer wishes to withdraw their personal data, you can ask the following regarding your data-handling process:

  • Who can access the data?
  • What do you do with user data?
  • How often can it be used?
  • What is the value of the data?

Plan and allocate resources well – Compliance costs and inadequate skills can be a big problem for SMBs. Scale this challenge by partnering with the right provider or team of experts that knows what it entails to successfully implement the necessary changes while making sure they’re financially viable.

Use proper security controls – Firewalls, encryption, and network security are critical components to help you establish a starting point for your data protection practices. In case of a data breach, you can at least be assured that you have secured a proper defense line.

Being proactive about your business’s compliance isn’t just all about padlocks and passwords. It also means that you need a dedicated security team like Prosum to ensure protection and compliance efforts as the GDPR continues to present a significant data governance challenge to all affected businesses. Prosum can help your business adapt quickly, avoid reputational risks, and costly fines. Additionally, while you reap the benefits of compliance, such as increased trust, secure data transfers and collection, and technological neutrality, Prosum can deliver impactful solutions to further your success on your road to being GDPR compliant. For more insights, contact us today.

This article is Part 1 of our GDPR series. Read the next installment below or check out Everything you need to know about the EU General Data Protection Regulation.

Part 2: GDPR: Benefit or burden? (What happens if you violate GDPR)