Understanding cybersecurity compliance: A critical business imperative.
Once a regulatory afterthought, compliance is now a critical component of cybersecurity. That goes for every business, of any size, in hundreds of different industries across North America.
But how is compliance defined—and does it really matter?
Compliance requirements differ across industries and geographic locations. Some companies only have to satisfy regulations when they launch their business. Some are required to meet annual benchmarks and report on compliance metrics. Some can even be subject to fines and penalties if they fail to comply with legal rules.
Healthcare, finance, and defense are just a few examples of industries that compile and enforce strict rules for data storage, device encryption, and communication protection. As more and more companies move to hybrid or virtual operations, technology compliance becomes incredibly important—especially as more states in the U.S. pass increasingly tough data security laws to protect consumers from data breaches, email compromises, and information theft.
What is cybersecurity compliance?
Consider cybersecurity compliance as a type of blueprint to follow as you build your business—just as you would follow an architectural plan if you were building or renovating a house. You must start with a strong, reliable foundation, and then build up reinforced layers of protection against specific threats.
Just when you think you’re done, an inspector may come along to determine whether your construction adheres to specific rules. If it doesn’t, you may be forced to bring your work up to code in a certain amount of time.
Sounds scary, right? However, businesses shouldn’t be afraid of enhanced cybersecurity compliance requirements. More stringent regulations offer better protection for protected information. When a company takes the security of its data more seriously, it can have positive impacts on the rest of the IT environment—and the organization at large.
Compliance also ensures security standards remain the same across all businesses in an industry. This is critical in the digital era with scams, hacks, and cybercrimes proliferating.
Not sure about whether compliance applies to your business? Here are a few of the regulatory laws and governmental organizations working to protect consumers, enhance data protection, and ensure compliance:
● Health Information Portability and Accessibility Act (HIPAA), a healthcare-specific data protection law signed in the U.S. in 1996
● Personal Information Protection and Electronic Documents Act (PIPEDA), a Canadian privacy law first enacted in 2001 before being expanded in 2004
● General Data Protection Regulation (GDPR), a broad set of data privacy protocols adopted by the European Union in 2016
● International Standards Organization (ISO), a worldwide federation of national standards bodies featuring representatives from more than 160 countries
● American Bar Association, a voluntary association of United States lawyers and law students
● American Bankers Association, a Washington, D.C.-based trade association for the U.S. banking industry
● American Council of Life Insurers, which advocates on behalf of 280 member companies whose products and services help 90 million American families achieve financial security
● Financial Industry Regulatory Authority (FINRA), a private American corporation that acts as a self-regulatory organization for member brokerage firms and exchange markets
● Securities Industry Financial Markets Association (SIFMA), a U.S. industry trade group representing securities firms, banks, and asset management companies
● Defense Federal Acquisition Regulation Supplement (DFARS), which implements and supplements Department of Defense policies
● Payment Card Industry Data Standard (PCI), an information security standard used to handle credit cards from major card brands
● FTC’s Standards for Safeguarding Customer Information Rule (the Safeguards Rule), which requires covered companies to develop, implement, and maintain an information security program with safeguards designed to protect customer information
While the details of each regulatory body differ, key areas of overlap include the way that they:
● Define personal information
● Require protection of that information
● Empower consumers to take control of their data
● Compel businesses to notify consumers of data breaches
What does this information mean for your business?
Many companies consider themselves too small to worry about compliance and treat it as an afterthought. But the hard truth is that data breaches, phishing campaigns, and email scams can strike at any time. And many small businesses have become bigger targets for cybercriminals looking to exploit those industries still struggling to adopt compliance standards.
IT-focused compliance solutions come in many forms, too. Software applications can help business leaders understand which compliance regulations apply to their business and recommend best practices for satisfying them. Data archiving can help companies in sensitive industries comply with government rules. Meanwhile, training and education can mitigate human error and protocol lapses that lead to information compromise.
Cybersecurity compliance services delivered by a trusted IT partner like CMIT Solutions can have a positive impact on your business. We dedicate extra effort to ensure compliance, pairing your company with experts who understand HIPAA, DFARS, PCI, and more.
This removes the guesswork from compliance, aligning your business with the requirements of standards organizations across the U.S. and Canada.
What’s an example of compliance in action?
On a national level, consider the FTC’s Safeguards Rule, which was updated in October 2023 to require non-banking financial institutions regulated by the FTC to report certain data breaches and other cybersecurity events directly to the FTC.
The Safeguards Rule applies to financial technology companies, mortgage brokers, credit counselors, financial planners, and tax preparers. These institutions did not previously have to report incidents to the FTC, and the new rule applies to a broader category of incidents defined as “notification events.” These events will be entered into a publicly available national database that overlaps with existing state laws like New York’s Stop Hacks and Improve Electronic Data Security Act.
The SHIELD Act, passed in 2019 and fully implemented in 2020, expands the state’s current laws about data breaches. Like HIPAA, it imposes affirmative cybersecurity obligations on covered entities. The law states that “any person or business that owns or licenses computerized data, which includes private information of a resident of New York, shall develop, implement and maintain reasonable safeguards to protect the security, confidentiality, and integrity of the private information including, but not limited to, disposal of data.”
What do those “reasonable safeguards” look like?
● Designating one or more employees to coordinate a data security program
● Identifying reasonably foreseeable internal or external risks
● Assessing the sufficiency of safeguards in place to control the identified risks
● Training and managing employees in the security program practices and procedures
● Selecting IT service providers capable of maintaining appropriate safeguards and requiring those safeguards by contract
● Adjusting the security program in light of business or new circumstances
● Assessing the risk in network and software design, information processing, transmission, and storage
● Detecting, preventing, and responding to attacks, intrusions, and system failures
● Regularly testing and monitoring the effectiveness of key controls, systems, and procedures
● Assessing the risks of information storage and disposal
● Protecting against unauthorized access to or use of private information during or after the collection, transportation, and destruction or disposal of the information
● Disposing of private information within a reasonable amount of time after it is no longer needed for business purposes by erasing electronic media so that the information cannot be read or reconstructed
Could your business meet these compliance requirements by next week, next month, or even next year? Even if your company is not located in New York, do you have any clients who live or work in the state? If so, you could be on the hook for such stepped-up regulations. And even if not, other state laws are on the books with more to come in the future.
How can I get help?
At CMIT Solutions, compliance is in our DNA. We’ve helped thousands of clients adjust to new regulations across every North American industry, from finance and law to accounting and construction. We shape customized solutions that meet your needs, all at a cost any business can afford.
With individualized IT solutions and elite support delivered across the U.S. and Canada, we pride ourselves on helping our clients satisfy every requirement, no matter how burdensome it seems. Looking for compliance help that can make a difference? Contact CMIT Solutions today.