There is no need to reiterate the danger posed to businesses by cyber-criminals around the world. Much has already been written about that subject, so you should already be aware of the danger. However, we are going to talk about another security-related matter that warrants serious concern, and that is compliance. Every industry has certain regulations they must follow, whether they be self-imposed by the larger industry or enforced by the law. Failure to remain in compliance can result in serious consequences of all sorts, so let’s discuss how you can evaluate and improve your compliance situation.
Step One: Find Your Regulating Agencies
If you want to get a handle on all the rules that you have to follow, you can start by looking for the people who make those rules. For instance, if you work in the healthcare industry you will need to abide by the guidelines of HIPAA. That is not an organization, but a specific law called the Health Insurance Portability and Accountability Act of 1996. In this case, the regulating agency is the federal government itself.
Another example would be the regulations imposed by the PCI Security Standards Council. PCI stands for “Payment Card Industry.” The name is apt because the council consists of representatives from Visa, Mastercard, and all the others you would expect. Anyone who wants to process payments using major cards will have to abide by these security standards.
As you can see, the standards and practices vary from one industry to another. However, it is very important to get in touch with the relevant authorities from your industry and request a complete copy of their rules.
What Is A Compliance Audit?
As you might guess from the name, a compliance audit is a thorough check to see if a particular organization is adhering to all applicable regulations. While there should always be people checking on compliance, a compliance audit represents a complete going-over.
When regulatory authorities come calling, they will want to see a recent compliance audit (or at least a review). This should be backed up by event logs and other hard data so that compliance can be demonstrated conclusively. In addition, it is also helpful to have an audit report from an external organization to go along with your internal one.
The Cost Of Non-Compliance
This is a dicey question because the costs can vary a lot. However, one thing about non-compliance costs that is universal: They are all pretty high! Even if you don’t receive any kind of fine, the cost of correcting the issues may be pretty expensive in itself. However, government fines are probably the worst potential consequences.
Why can government-imposed fines be so bad? Because they can be huge! For instance, the FDIC (which regulates banking and financial institutions) has been empowered by the federal government to impose non-compliance fines on those who fail to comply with its rules. These fines are separated in tiers, and read as follows:
Tier 1 fines: Up to $5,550 per day of non-compliance
Tier 2 fines: Up to $27,500 per day of non-compliance
Tier 3: Up to $1,100,000 per day of non-compliance
Thankfully, most violations end up in the first tier, but that is still pretty expensive. $5,500 per day adds up to $38,500 per week, and that can add up pretty quickly. This is why most companies have whole departments dedicated to compliance…the cost of non-compliance can be nothing short of staggering.
Aside from that, there is also the possibility of being put out of business entirely. For instance, if your compliance issues are bad enough, you could even be shut down by the authorities. Some of these regulatory bodies issue licenses and certifications, without which your credibility will take a serious hit.
Basic Principles Of Compliance Management
As you might imagine, it isn’t easy to manage all of this stuff. These regulations will often change from one year to another, making compliance management even more difficult. Thus, compliance management has become a science in itself. Let’s look at some of its basic principles.
- 1. To account for all of your risks, you must understand all of your risks. Thus, threat hunting is a very important part of compliance management.
- 2. Always keep things proportional. Bigger risks require more precautions while smaller risks require fewer. The trick lies in knowing one from the other.
- 3. Monitor all regulatory changes. When the rules change, you will be expected to know immediately so do not delay.
- 4. Good communication between management and staff is one of the most essential ways to encourage compliance. Without good coordination between departments, good compliance is next to impossible.
- 5. Be careful about your business partners, because guilt by association is (unfortunately) a reality.
Once you have made a dedicated effort to meet all the requirements that apply, the final step is to test your setup and see if you are truly well-protected. The purpose of all these security standards is to make sure that sensitive data is well-protected from criminals. To that end, you can hire some “white hat” hackers (in other words, the good guys) to test your system and see if it can be penetrated. In the end, this is the best way to make sure that your security is up to the highest standards.
The importance of compliance cannot be overstated, as it will prevent your organization from incurring heavy fines and reputational damage that might be irreparable. Of course, if all of this is too much for you, you can always enlist the help of an expert company like PCH Technologies. We have the people and the knowledge to make sure that your compliance issues are dealt with swiftly. As you have already seen, the cost of non-compliance can be ridiculously high, so don’t delay. To find out more, call us at (856) 754-7500.