What is GDPR?
GDPR is a new set of rules introduced by the European Union to give citizens more control of their personal data. It came into action on May 25, 2018. This data protection law is imposed in 28 EU countries and was designed specifically to control and process personally identifiable information of EU residents regardless of their geographic location. Any organization that offers products and services to the EU residents or monitors their behavior must meet GDPR compliance regulations. Basically, it sets a new standard for data storage, usage, and collection among all the European companies. It has changed the way companies handle privacy and give rights to control and access to their own data online. GDPR aims to simplify the regulatory environment where both EU citizens and businesses can fully and safely benefit from the digital economy. It is worth noting that GDPR is not limited to the European Union. No matter where your company is based in the world, you’ve to follow GDPR when providing services and collecting data from EU citizens.
Why do you need GDPR?
Today, nearly every aspect of your life can be tracked, digitized and logged. Your pictures, locations, hobbies, and all your personal information is collected, stored and traded by companies and governments; thanks to the internet. The new GDPR regulations cover things that could identify a person based on name, contact details, computer location, race, and sexual orientation. From now onwards the companies have to prove that they have rights to hold such kind of data and keep it safe. In today’s data-driven world, GDPR is designed to safeguard the data and privacy breaches. If you deal with customers in Europe, then you need to make sure that the way you collect, store and use data is compliant to GDPR. Many companies are already concerned regarding GDPR because the potential penalty is 4% of the companies’ annual turnover. So this means if a company breaches the law, then they might have to pay a multi-million pound fine.
What happens if you are not GDPR- compliant?
If your company is not GDPR compliant, at first, you most likely will be warned and given a timeline to make your company compliant, but in more severe cases as a fine- you need to pay 4% of your global turnover or maybe €20 million in some extreme cases. The higher level fine results when-
- Data Infringement occurs
- Data is not properly handled
- An unauthorized data transfer occurs
- Requests of customer data access are ignored.
So, make sure you are not doing something that can push you into a big penalty trouble. In short, GDPR is now more focused on data privacy. You can read more about how to avoid GDPR fines in another article.
Benefits of GDPR to the businesses
Below mentioned are the benefits that GDPR compliance can bring to your business:
1. Enhancing customer confidence.
Let’s face it- your customers need assurance that their data is safe within your organization. Do you agree? Even as a customer, we want our data to be safe. Here GDPR can act as a guarantor. According to the new legislation, each organization must have a Data Protection Officer (DPO) accompanied by the data processing activities audit. Also, each company has to follow the GDPR compliance checklist and comply with all the sets of data protection principles that fall under GDPR. It ensures that all the necessary system is in the right place and keep the personal data and information of your customers safe and secure.
2. Reduced Maintenance Cost.
When your business is compliant with GDPR, it can help your organization to cut the costs. How? Well, it asks you to give up the legacy applications and data inventory that is useless or irrelevant for your business. Moreover, apart from keeping your data updated, it enables you to cut the costs of data storage. As a cost-benefit, GPPR allows your organization to engage with your customers even more effectively.
3. Give a new level to Decision Making.
If you are tired of making automated decisions based on an individual’s personal data, then GDPR has got you covered. An automated decision such as providing a loan to the customers or not can be easily prone to big issues. Therefore, GDPR mandates the rights to get human interventions and decrease the prospect for automated decisions. GDPR allows the data of your organization to be more consolidated and make sure that your data is easy to use and you have complete knowledge of its value. When you use customer information effectively, it will enable you to make sound decisions and result in a better Return on Investment (ROI).
4. Increased integrity among the audience.
Another benefit that comes with the compliance of GDPR is that it strengthens your relationship with your customers. Once you have the consent of your loyal customer base and you’ve done explaining to them how is it that you are going to use their personal data, they’ll hear you more. Ever since the consumer has become more aware of their privacy concerns, transparency can lead to better trust. Consequently, GDPR can work in your favor in maintaining the trust and to bring edge-to-edge competition to the competitors.
5. Enables you to kick-start a new business trend.
The GDPR is the first promising step towards a new trend that enables companies to keep the sensitive information of their customers private. Nearly a decade ago, It was impossible to perceive that a business could go Eco-friendly, vegan-friendly, or LGBT-friendly. It is no brainer that, coexistence with GDPR is hard, but now that businesses are more flexible and keeping their customers’ needs and privacy at the top, it is no less than starting of a new culture. In the coming months/years, GDPR will have more profound effects on the businesses.
Companies affected by GDPR
Many companies are directly affected by the EU’s The General Data Protection Regulation. There is no point of debating if it is important or not, but it’s just coming and affecting businesses. Now the question is how many companies will get influenced by GDPR. Some core examples are:
- Online retailers and businesses. Do you want your personal information to be used for marketing purpose? Probably NOT. And, it’s quite obvious as no one wants their data to be used by the third-party. So consumers should make it clear that they don’t want to expose their data as their profiles are more prone to be in danger. It has been noted that one in three adults in Europe contacts online retailers not to use their data for marketing purpose. Or, according to GDPR guidelines, it must be ‘Forgotten.’
- Online banks and financial services. The growing trend of online banking is not hidden. It makes our lives more convenient. Banks and online financial institutions, support the data and security protection measures to comply with some restrictions. Also, they need to comply with protocols visibility, enabling consumers access and direct control to their relevant information. In case, a customer wants to see the information, the financial institutions and banks must be able to provide precise information without any hassle.
- Medical and Healthcare. In the digital world, one of the industries that are making a massive shift is medical and healthcare. With the arrival of predictive analytics and electronic health records, personal records are stored online. Fortunately, in the medical industry, the procedures are already strict when it comes to handling and safety of these records, the medical industry has always been a step ahead. But the only concern is its compliance with GDPR as it’s more strict than HIPAA.
Apart from these, there are still many companies that are affected by the GDPR regulations. Undoubtedly, GDPR is a regulatory update for those who possess a business in Europe or provides services and sells products to its customers. Because data security and privacy is a big concern, in order to win the trust of the customers, it is important to comply with GDPR regulations.
What involves in Personal Data?
So, what constitutes personal data? Well, it contains any information (direct or indirect) related to the users by reference to an identifier. It includes - name, location, online identifier, identification number or any personal details.
How GDPR Impacts your business?
So, finally, the most awaited question- HOW GDPR IMPACTS YOUR BUSINESS? If your company is overprotective about its data storage, usage, and collection, GDPR brings a new level of transparency. Investing in GDPR can be a good idea as it helps to build the confidence and trust of your consumers in your business. In the eyes of the user, companies that are not GDPR compliant or don’t even want to invest in it are less trustworthy. On the other hand, the companies that provide value access to their customer’s data wins the trust of their users successfully.
Embrace GDPR with Open Arms
Digitalization of the world has brought a radical shift in the speed, volume, and variety of data produced. At the same pace, intentional and unintentional data threats have come into the picture. With consumer becoming more and more aware of the security of their data, it has become mandatory for businesses to embrace GDPR. Undoubtedly, GDPR is not a piece of cake, but a complex topic. It acts as a security guard against data abuse and safeguards your customers’ data from any kind of data threats. Therefore, rather than running away from it, every company big or small should embrace it with open arms. Do this not only to avoid massive penalties but also to boost your business.