The costs of non-Compliance

Jun 30, 2021 | soffid

Faced with a range of obstacles, businesses are changing how they approach cybersecurity

Cybersecurity has been a priority for business leaders for many years. Yet, despite investments in security controls, cyber-attacks keep coming.

Failing to meet regulatory compliance standards costs organizations billions every year. Even worse? The financial impacts continue to rise. These costs come from more than just fines and sanctions but actual damage to business disruption and loss of productivity. By taking a continuous approach to compliance requirements, your organization can dodge these monetary bullets and improve information security and data privacy.

Data protection compliance costs less than noncompliance

Smaller companies — with fewer than 5,000 employees — in particular may be hit hard by GDPR requirements and other data compliance hurdles. A new report does the math.
Research has shown that having a CISO can lower the cost of a data breach. But is there an effect on the cost of data protection compliance?
In many industries, the value of data is increasing, and so is the cost of protecting sensitive and confidential information. Regulatory scrutiny of information security is higher in industries such as financial services and healthcare, but that doesn’t mean other companies are off the hook.

Compliance, similar to a robust cybersecurity framework, is a key enabler of business and its absence instills heavy monetary impacts in the case of both on-premise and cloud deployment. What is the cost of compliance? Are organizations saving costs by remaining non-compliant? Understanding this is imperative in the world of modern business where cyberattacks continue to grow sophisticated.

Non-Compliance Cost And Its Repercussions

Several organizations had rationalized the non-compliance cost to be lesser than it is needed for bringing data and technology processes under compliance. However, the impact of non-compliance cost is jaw-dropping compared to the cost of compliance with regulations such as PCI-DSS, HIPAA, GDPR, and so on.

Recent years have seen high recommendations for compliance regulations to prevent legal implications, consequences regarding business reputation, and possible fines

It has been witnessed that the demand for audit evidence requests is increasing and organizations, one in six times, are found non-compliant. This has resulted in huge fines when screened by third-party auditors. The majority of organizations believe that compliance becomes a problem while moving systems, infrastructure, and applications to the cloud. They think that challenges come to the fore while dealing with IT security compliance in the cloud.

Often Overlooked Costs

The complete financial costs of a data breach can be hard to quantify. Tangible assets are the easiest piece of the puzzle, but consider other expenses such as lost future business and reputational damage. Intellectual property loss, downtime, and operational impacts affect the daily activities of an organization and render it unproductive. Noncompliance is also a substantial financial factor—breaches often incur attorney’s fees, prosecution, and penalties.

Each data breach accumulates costs related to investigation, response, notifications to regulatory organizations, victim identification, public response, victim outreach, and internal and external communication campaigns. Victims often require compensation, as well.

Take a Proactive Approach

In light of the mounting risks to security and the expenses of a breach, every organization must make risk-aware decisions. The ultimate goal: mitigate risk without addressing every threat or vulnerability

What costs are involved in bringing your organization into compliance?  The following components typically make up compliance costs:

  • Data protection and enforcement – Preventing data leakage and enforcing data usage policies
  • Audits and assessments – Examining and inspecting the current stance of an organization compared to what is required by the compliance framework mandated
  • Policy development – developing internal policies that provide the structure needed to comply with various compliance regulation frameworks
  • Training – Training staff and others involved to carry out needed activities for compliance
  • Certification – certifying your business against various compliance regulations
  • Investment in security solutions and other specialized technologies (data loss prevention, governance, encryption, etc) – Investing in technology solutions that allow more easily bringing your business into compliance with regulation frameworks

To Sum Up

Compliance costs are significantly lower than that of non-compliance and leveraging technology solutions helps reinforce the process further. Holistic approaches are necessary for ensuring data compliance, security, and protection. As key functionalities of businesses evolve, surrounding malware protection, data usage, and backup, and audit applications, a number of AI-driven compliance solutions are coming to the fore. These solutions help shore up compliance programs, thereby avoiding risks and preventing costly repercussions of non-compliance.
While compliance costs are far less than the cost of non-compliance, using technology solutions can help to reduce those costs even further.  Soffid provides a holistic approach to ensuring your data is protected, secure, and compliant.

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