In today’s world, businesses of all sizes need to be aware of data privacy regulations and the importance of compliance. Enforcement actions of EU’s General Data Protection Regulation (GDPR) began in earnest in 2021-2022 and are predicted to continue ramping up. The California Privacy Rights Act (CPRA) is set to roll out in January of 2023 along with several other state laws. There are many reasons why compliance with privacy regulations is critical, the first and foremost being customer trust. But the fines that come from non-compliance can be crippling, as well, and are becoming more commonplace every year.
Preparing for compliance can seem overwhelming, but it’s entirely possible with the right strategies and knowledge. Here are 6 tips to help prepare your business for data privacy compliance in 2023.
Tip #1 – Understand the California Privacy Rights Act
The California Privacy Rights Act (CPRA) is a state privacy law that was passed in California on November 3, 2020. It provides additional privacy rights to California residents, including the right to know what personal information a business collects, the purpose for which the information is used, and the ability to opt-out from the sale or sharing of personal information. The CPRA also requires businesses to provide reasonable security for collected personal information, and gives consumers the right to sue for damages resulting from a data breach. The CPRA is considered one of the most comprehensive privacy laws in the United States and is expected to be a model for other states to follow.
The CPRA goes into effect on January 1, 20223. Make sure you understand what this law entails and that you can meet its requirements. This will provide a solid foundation for complying with other regulations (although is not a guarantee for total compliance across the board).
Tip #2 – Identify what personal data your business collects and stores
The first step to data privacy compliance is to identify what personal data your business collects and stores. This will help you determine which data privacy laws and/or regulations your business will be required to follow. There are broadly two types of personal data that businesses collect and store – personal information and sensitive personal information. To determine what type of data your business collects, you can ask yourself a few questions:
- What is the purpose of collecting and storing the data?
- Who will have access to the data?
- Who will the data be shared with?
The clearer you are on the type of data your business collects and stores, the easier it is to determine what data privacy regulations your business needs to follow.
Tip #3 – Update your data privacy policy
A data privacy policy is a written notice that discloses how your business collects, stores, and uses customers’ personal data. It is an important part of compliance because it shows customers that you care about their privacy. It also protects your business from legal action if someone were to sue you for violating the law. Depending on what local laws and regulations your company falls within, a data privacy policy may not be required by law, but it is recommended by experts. This is because a data privacy policy adds a level of transparency to your business and protects your customers from data misuse.
You should update your data privacy policy to reflect the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). The GDPR requires that businesses inform customers of the data they collect, how they use it, and who they share it with. The CCPA requires businesses to also disclose the ways customers can revoke their consent and request for deletion of their data.
Tip #4 – Update your business processes and systems
As you identify the types of data your business collects and stores, you can determine the data privacy laws and/or regulations your business will need to follow. This will help you identify which business processes and systems need updating. You may need to update your employee training on data privacy compliance, your data privacy policies, and your data management processes and systems. It’s important to not wait until the last minute to prepare for compliance because you may not have enough time to make the necessary changes. It’s also important to know that it will take time and money to make the necessary changes to comply with data privacy regulations.
Tip #5 – Update your computer systems, databases, and policies
Computer systems, databases, and policies are all important components of your business that need to be updated to comply with data privacy regulations. Your computer systems should be updated to protect your customers’ data and adhere to data privacy regulations. You should also update your databases to include the necessary information and protect your customers’ data. Policies should be updated to include information on data privacy compliance and protection.
Tip #6 – Train your staff on data privacy compliance
Finally, you need to train your staff on data privacy compliance. A lack of employee training can lead to data misuse and non-compliance with data privacy regulations. To avoid these issues, you need to train your staff on compliance. You can do this by hosting a training session and including the training as a part of new hire orientation.
As a business owner, it can be easy to put off compliance with data privacy laws. The rules and regulations can seem complicated and overwhelming. However, it can be done, and it’s important to not wait until it’s too late. It’s best to start preparing for compliance as soon as possible. If you follow these 6 tips, you will be well on your way towards compliance.
For more information on how to use data privacy requirements as a path toward building customer trust, check out our recent eBook, “In Data We Trust: A Guide For Establishing Customer Trust Through Privacy.”
