Listen to: "The 4 Most Common Compliance Risks and How to Avoid Them"
Most businesses must contend with some sort of compliance industry-specific obligation to avoid being subject to stiff fines and penalties, which is reason enough to do everything possible to satisfy requirements.
Since it has become so common for a governing body to set standards and policies within their related industry, and possibly for numerous protective reasons, most organizational leaders simply consider regulatory compliance one of the many costs of doing business today.
More importantly, there are plenty of intangible and non-mandated reasons to perform compliance-related duties. The primary reasons that business owners willingly jump through the necessary hoops most often involve protecting their customers and their own brand.
Additional Reasons to Do Everything Possible to Avoid Common Compliance Risks
Besides punitive fees, penalties and a sense of professional obligation, there are additional reasons to make your best effort to avoid common compliance risks, which include:
Reduced Legal Concerns
Along with fines and penalties set forth by the regulatory body in question, any compliance shortcomings or outright negligence may result in further legal troubles for your business. Compliance helps you to avoid additional legal issues that include work stoppages, lawsuits that could result in the ultimate shutdown of business, and hefty legal fees.
Improved Business Operations
Many times, regulations and standards provide insights into your industry that serve to help you sharpen your business operations. The PCI SSC (Payment Card Industry Security Standards Council), HIPAA (Health Insurance Portability and Accountability Act of 1996) and the GDPR (General Data Protection Regulation) are just a few regulatory bodies that monitor all the latest in risks that could affect consumer data. By maintaining regular compliance, you instantly protect your organization from data breaches and other risks.
Enhanced Public Relations
Any time you can let your customers, stakeholders and industry peers know you are fully compliant with all industry standards, your business gets a boost in good public relations. Each time you bring in a professional auditing team and receive authoritative certification, you can place that information on your website to let everyone know. As consumers become increasingly aware of the ever-multiplying data breaches that occur in a variety of industries each year, your fully displayed certification of compliance is likely to earn their trust and loyalty.
There really is no downside to performing the necessary steps to achieve compliance, whether it involves health and safety issues, hiring policies or an industry-specific regulation mandated by a local, state or federal body.
Do You Know About the 4 Most Common Compliance Risks and the Standards to Help Combat Them?
Every modern business, regardless of industry, faces a certain degree of risk. Risk has always been intertwined with any type of business endeavor, and good business leaders have adapted to risk related to their business by understanding it and finding ways to combat it.
In the technological age, the need for risk management has never been greater. Leaders in areas like healthcare and the credit card industry have taken note over the past several decades. These leaders in these businesses have developed regulations, acts and standards to help organizations avoid and mitigate risk that is inherent in their respective field.
Following are four of the most common risks and the best methods to minimize their impact and, ideally, avoid them:
- Identity Theft Via the Electronic Medical Records in the Healthcare Industry
- Credit Card Fraud in the Payment Card Industry
- European Union Consumers’ Confidential Information
- Natural Disasters and Massive Cyberattacks
Identity Theft Via the Electronic Medical Records in the Healthcare Industry: HIPAA
The rapid emergence of Electronic Medical Records (EMR) over the past three decades has taken the healthcare community by storm. EMR and other uses of available technology have made hospital communications—both with departments in the hospital network and across different healthcare networks, locally and nationally—easier than ever.
Of course, with that ease and convenience for healthcare providers and patients alike, there comes risk, thanks to the tireless work of cybercriminals. These bad characters are particularly attracted to the healthcare sector because healthcare records contain some of the most valuable information that they can easily sell on the black market. A few pieces of this valuable information includes:
- Full names of patients
- Social security numbers
- Home addresses
- Patient health histories
In response to the urgent need to protect patient privacy, particularly in the digital age, the HIPAA was developed and enacted in 1996 in the interest of overseeing Electronic Protected Health Information (EPHI). HIPAA’s purpose is to guide healthcare organizations in their efforts to protect EPHI consistently and thoroughly through an intensive series of requirements.
As a fundamental part of your business operations as a healthcare organization—or perhaps as a business associate or vendor doing business with a healthcare organization—you probably collect, store, transmit and process sensitive patient data. If that is the case, you must establish security controls and objectives, based on specific operations and HIPAA regulations, to properly handle risk management on this information.
HIPAA compliance requires that any covered entities perform regular internal audits to identify any possible security violations.
Credit Card Fraud in the Payment Card Industry: PCI-DSS
Another huge risk for businesses today involves credit card fraud. Hackers understand that, while the value of the information obtained in a payment card company breach is fleeting, it does not deter them from trying.
The Payment Card Industry Security Standards Council—founded and formed by major payment brands like Visa, MasterCard, American Express, JCB International and Discover Card Services—agreed to incorporate the PCI Data Security Standard (PCI-DSS) into each of their security programs. This standard has become the best weapon against relentless hackers who will never give up on the payment card industry.
The PCI-DSS includes 12 core requirements for protecting cardholder data that include the installation of firewalls, encryption of data, adoption and regular updates of antivirus programs, restriction of access to cardholder data, development and maintenance of secure systems and applications, and tracking and monitoring of all access to cardholder data.
A Qualified Security Assessor (QSA), certified by the PCI Security Standards Council, can help you stay on track to protect your valued customers’ data.
European Union Consumers’ Confidential Information: GDPR
After two years of preparation for companies worldwide, the General Data Protection Regulation (GDPR) took effect. The European Parliament worked on a set of requirements that would work to harmonize data privacy laws in the interest of protecting European consumers’ confidentiality when making transactions in Europe and around the world.
The EU wanted to place more control of data into the hands of its citizens by developing and mandating requirement matters that include the following:
- Data Portability
- Data Breach Notification
- Data Protection for Children
- The Right to Be Forgotten
- The Appointment and Training of a Data Protection Officer
- The Easy Identification and Availability of Data Upon Customer Request
This mandatory regulation comes with stiff penalties and fines for those not in full compliance, keeping companies on their toes all around the globe. Companies that are uncertain as to whether they are subject to the GDPR may wish to consult with an auditing firm for optimal risk management.
Natural Disasters and Massive Cyberattacks: Disaster Recovery Plan
It is important to never underestimate the potential power of a natural or man-made disaster on your computing system. As the technological landscape continues to rapidly shift, it is more important than ever to examine every possible disaster scenario that might affect your business in the event of a flood, hurricane, wind storm, tornado or fire.
While Business Continuity attends to the functioning of daily business matters in the event of a disaster, your Disaster Recovery Plan focuses supporting IT systems that support fundamental business functions. Your Disaster Recovery Plan lays out the processes and procedures that your team will employ to retrieve data and restore basic operating functions to your business a quickly as possible.
Although businesses are increasingly storing some portion of their data in the cloud, they must still be able to perform daily technology-based duties on the premises of their organization.
A few timeless, core elements of an effective Disaster Recovery Plan include the following:
- Identifying known and potential weaknesses, such as a strong potential to experience flooding or tornadoes
- Strategizing to minimize the duration of a serious disruption to business operations
- Facilitating effective coordination of recovery tasks by developing teams for various duties
- Simplifying recovery efforts by considering issues like potential relocation options
- Performing test drills to identify and correct problems
Are You Ready to Take on Risks That May Affect Your Business?
The risks we’ve discussed above are only the tip of the iceberg for today’s business owners, unfortunately. The great thing is that there are many ways to manage these risks.
At I.S. Partners, LLC., we understand that our clients face many challenges, and we can help you focus on your vision and mission without leaving yourself open to the many risks out there.
Call us at 215-675-1400, or request a quote so we can start a conversation about all the possible risks your business might face and how we can help relieve the stress for you by coming up with a solid plan.
This blog was originally published on August 13, 2018 and has since been modified and updated to reflect the most accurate information..