GDPR Compliance: A Short Guide For Beginners

GDPR Compliance: A Short Guide

The protection of personal data is critical in today’s data-driven environment. The General Data Protection Regulation (GDPR) is an internationally recognized compliance standard that was created to safeguard an individual’s right to privacy, particularly with regard to personal data. It is associated with the processing of personal data within the European Union (EU) countries. The GDPR guidelines prohibit companies operating both domestically and internationally from mishandling sensitive data belonging to EU residents.

Knowing how to comply with GDPR is crucial whether you’re a business owner, data protection officer, or someone navigating the digital world. It is now necessary for businesses operating in Europe, as well as for organizations handling the data of European people, wherever they may be located, to comply with the General Data Protection Regulation (GDPR). It is, therefore, imperative for startups to comprehend and adhere to these standards to foster confidence with their stakeholders, clients, and users, in addition to avoiding heavy penalties.

The General Data Protection Regulation (GDPR) went into force on April 14, 2016, and was ratified as legislation by the European Parliament on May 25, 2018. Under the GDPR guidelines, businesses must notify the supervisory authority and any impacted parties of significant data breaches within 72 hours of becoming aware. The GDPR also outlines the legitimate grounds for gathering personal data; once information has been gathered for a legitimate purpose, it cannot be used for any other purpose. 

In this blog, we will provide you with a brief overview of what the GDPR compliance framework is, who should implement it, key GDPR terminologies, and its benefits and costs.

What is the GDPR Compliance Framework?

The General Data Protection Regulation (GDPR) is a set of data privacy and security guidelines jointly adopted by the European Commission, the European Parliament, and the Council of Ministers of the European Union to ensure improved and harmonized data protection for individuals inside the European Union. It is the biggest update to data privacy laws in two decades.

The General Data Protection Regulation (GDPR) makes a significant declaration regarding the private data of EU citizens and residents and their right to ask data controllers and processors to remove, amend, and transfer their data. As a result, the GDPR significantly modifies its predecessor, the Data Protection Directive 95/46/EC. The goal of all the GDPR reforms is to give consumers more control over their data while increasing transparency about the data gathering and use process. The rules, thereby, contribute to updating data legislation to reflect our linked digital world.

So, who needs to comply with the GDPR guidelines?

Who Should Implement GDPR Compliance?

Any entity (individual, company, or organization) that gathers or uses personal data from any person within the European Union is subject to GDPR. Any information that makes it possible to identify a specific individual is considered “personal data.” Any business that has a website or app that gathers user data from the EU is required to abide by GDPR.

The GDPR laws function this way since they aim to protect the data and privacy rights of all EU internet users, regardless of where they go online or make a transaction. First, GDPR compliance is legally required if you transact business with EU nationals. Furthermore, GDPR is a need for your brand if you want to build trust with EU customers so that they would genuinely want to do business with you.

Now that you understand who should implement GDPR compliance let’s see who these guidelines affect.

Who Do the GDPR Guidelines Affect?

There are three bodies that are affected by the GDPR guidelines. These are as follows:

  1. Controllers of Data: Public or private data controllers are the entities that initiate the process of gathering personal data from individuals. Data controllers are responsible for the information they collect and must follow certain guidelines while processing user data to protect its integrity and privacy.
  2. Processors of Data: Data processors are typically hired by data controllers to process security tasks. In most cases, data processors are located inside the EU, but occasionally they are not. GDPR mandates that when processing data, Data Processors adhere to the law. It is the duty of the data processor to make sure that external organizations that they outsource their processing operations comply with GDPR.
  3. Data Subjects: These are individuals whose data is gathered and handled by Controllers and Processors. The GDPR gives data subjects the power to control how organizations use their personal information. 

In the following section, we will highlight some key concepts and considerations related to the GDPR guidelines. These may have deeper implications for the growth of your startup, especially if you are dealing with solely EU citizens.

Key Terminologies of GDPR Compliance

Despite its technical nature, the GDPR’s language is essential to comprehending and proving compliance with its rules. Here are the terminologies you should be familiar with:

  1. Personal Data: Any information pertaining to an identified or identifiable natural person (referred to as the “data subject”) is considered “personal data” under the GDPR.

In addition to more indirect identifiers like IP addresses or cookie IDs, this can include more obvious ones like name and address. You should outline in your privacy policy the kinds of personal information your startup gathers and uses. Examples of personal data include phone numbers, photographs, bank details, opinions, passport and social security numbers, etc.

  1. Processing: “Processing” refers to almost any action that can be taken about personal data, including gathering, storing, using, and deleting information. You should be very explicit about how you process the personal data you collect in your privacy policy.
  2. Consent: “Consent,” defined by GDPR, must be freely provided, explicit, informed, and unambiguous. Positive opt-in is necessary; pre-checked boxes or any other kind of implicit permission are unacceptable. Clearly state in your privacy policy how you will seek, document, and handle consent.
  1. Rights of Data Subjects: Under the GDPR, data subjects are granted a number of rights, including the ability to access, correct, erase, limit, and more regarding personal data. Your privacy policy ought to specify these rights as well as the means via which data subjects can use them.
  1. Data Protection Officer (DPO): You might need to employ a DPO if your startup handles sensitive data or monitors extensively. If so, you should describe the DPO’s responsibilities and provide their contact details in your privacy policy.

DPOs are required only for “controllers and processors whose core activities consist of processing operations which require regular and systematic monitoring of data subjects on a large scale or of special categories of data or data relating to criminal convictions and offenses.” Not all businesses are required to have one. The primary duties of the DPO are to guarantee the GDPR’s implementation, maintain a record of all processing activities involving personal data, and offer counsel and notification to data collectors and processors of their legal requirements under the GDPR.

These essential GDPR phrases should be included in your company’s privacy policy, and you should ensure your users can readily understand them. Instead of using technical legalese, use straightforward, succinct language to communicate the essential details. It is also recommended that you structure your policy so that each element is given a quick synopsis up front, followed by more in-depth details. This technique helps users more readily comprehend their rights and practices by making your policy more approachable and navigable.

We will further delve into some more concepts of GDPR compliance that directly impact the way businesses manage and process personal data.

Some More Key Concepts of GDPR Compliance

Here are some other essential concepts of GDPR:

  1. Data Breach Notification: Reporting data breaches to the appropriate supervisory authority within 72 hours of discovery is another crucial component of the GDPR. The data subjects must also be notified if there is a strong risk that the breach would affect the rights and liberties of natural people. Strong plans for responding to data breaches must be in place for startups.
  2. GDPR Fines and Penalties: The possibility of fines and penalties is one of the most direct effects of non-compliance with the GDPR. The financial ramifications might be severe—up to €20 million or 4% of the global yearly revenue of the business from the previous fiscal year, whichever is greater. Such sanctions might be disastrous for companies, especially in their fragile early stages.
  3. Privacy by Design and Default: One of the main tenets of the GDPR is “privacy by design and by default.” It entails building data protection into your systems and procedures from the beginning instead of doing so after the fact. It also means that by default, the strongest privacy settings ought to be in place. As a startup, integrating these concepts into your business plan from the beginning can guarantee compliance and foster confidence among stakeholders and customers.
  4. Data Transfers Outside the EU: Extra factors must be considered if your startup has an address outside the EU or transfers personal data there. Only certain circumstances and protections—such as Standard Contractual Clauses (SCCs) or an Adequacy Decision by the European Commission—allow the transfer of personal data outside of the EU.
  1. Effect on Organizational Strategy: Lastly, the GDPR will have a big impact on your entire plan for conducting the company. GDPR compliance necessitates a thorough analysis of your business processes, from selecting what data to gather to thinking about how to store and safeguard it. It can call for modifying your personnel training programs, IT infrastructure, or your goods or services are designed.

Last but not least, let’s check out the benefits and costs of GDPR compliance.

Benefits of GDPR Compliance

If businesses comply with the GDPR guidelines, they can expect to reap the following benefits:

  1. Build and maintain a data processing register: In short, you can enumerate the specific personal data being collected, together with the date, reason, and other details, systematically in a single storage location. This will additionally also shed a great deal of light on the data your business possesses, thereby proving to be far more beneficial than the use of CRM systems and other data platforms.
  2. Indicate transparency: You can show exactly what information is gathered, why, and how it is processed. Once more, this takes a great deal of work, but when done well, your clients will have a great deal of faith in what you do and why. Once they get this and have faith in your strategy, they should have greater faith in your business.
  3. Reduce the amount of company information gathered: While this is easier said than done, there are significant advantages to a firm investing in reducing the amount of data collected. These advantages include improved business processes, lower storage costs due to less stored data, etc.
  4. Protect personal information: Data security has always been a hot topic. Still, not all businesses have gone far enough. The GDPR now requires that personal data be secured, and if this is done correctly, it should lower the amount of data breaches. Reducing the amount of breaches is undoubtedly beneficial for businesses when considering costs, reputation, and various other factors.
  1. Better customer relationships: Customers may trust that their data is being properly saved and used if a business complies with GDPR or, at the very least, has implemented the procedures mandated by the law. This fosters trust and can improve a company’s connection with its clients. Consent is essential to this as well. Customers can feel secure knowing that their data will only be used for the purposes they have consented to under GDPR. Customers’ concerns about the potential exploitation of their data are growing as organizations rely more and more on data. Another strategy to improve client interactions and your business’s reputation is to be explicit and open with consent.

Coming to the costs of GDPR compliance, here is an estimated breakdown of its different expenses based on the processes.

Costs of GDPR Compliance

GDPR Certification can involve several costs, including certification fees, consultant fees & internal costs, as explained below:

  • Internal Costs: The company incurs expenses to get ready for GDPR certification, which are referred to as internal costs. The expenditures associated with GDPR certification may encompass employee training, paperwork, and audit readiness. Depending on the organization’s size and degree of certification preparation, internal costs can vary.
  • Certification Fees: Depending on the certification type and the certifying body, certification fees can differ in price. To comply with GDPR, an organization can obtain ISO 27001 and ISO 27701 certifications, which can vary in cost based on the organization’s size and complexity. The typical certification cost for GDPR compliance attestation can range in thousands depending upon the size of an organization.
  • Consultant Fees: A lot of organizations decide to engage with consultants. The complexity of the organization’s data processing activities, the amount of support needed, and the consultant’s experience can all affect how much a consultant charges.

GDPR Compliance Readiness with Akitra!

Establishing trust is a crucial competitive differentiator when courting new SaaS businesses in today’s era of data breaches and compromised privacy. Customers and partners want assurances that their organizations are doing everything possible to prevent disclosing sensitive data and putting them at risk, and compliance certification fills that need.

Akitra offers an industry-leading, AI-powered Compliance Automation platform for SaaS companies. Using automated evidence collection and continuous monitoring, together with a full suite of customizable policies and controls as a compliance foundation, our compliance automation platform and services help our customers become compliance-ready for security standards like SOC 1, SOC 2, HIPAA, GDPR, PCI DSS, ISO 27001, ISO 27701, ISO 27017, ISO 27018, NIST CSF, NIST 800-53, NIST 800-171, FedRAMP, CCPA, CMMC, SOX ITGC, and more such as CIS AWS Foundations Benchmark, Australian ISM and Essential Eight etc. In addition, companies can use Akitra’s Risk Management product for overall risk management using quantitative methodologies such as Factorial Analysis of Information Risks (FAIR) and qualitative methods, including NIST-based for your company, Vulnerability Assessment and Pen Testing services, Trust Center, and AI-based Automated Questionnaire Response product to streamline and expedite security questionnaire response processes, delivering huge cost savings. Our compliance and security experts will provide customized guidance to navigate the end-to-end compliance process confidently. Akitra Academy provides easy-to-learn short video courses on security, compliance, and related topics of immense significance for today’s fast-growing companies.

The benefits of our solution include enormous savings in time, human resources, and cost savings, including discounted audit fees with our audit firm partners. Customers achieve compliance certification fast and cost-effectively, stay continuously compliant as they grow, and can become certified under additional frameworks using a single compliance automation platform.

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