Since the General Data Protection Regulation (GDPR) went into effect in the EU five years ago, it has had a profound impact both within the bloc and beyond. With it, data governance and privacy investments have become non-negotiable for companies looking to leverage data to drive innovation and growth. Proper data governance protects customer data, one of a business’ most sensitive and important assets, from data breaches and disruption. With breaches now costing companies in the UK an average of £3.4m, investment into data governance has never been more important.
GDPR inside and outside the EU
“GDPR’s influence on the tech industry goes far and beyond the European Union,” says Daniel Bailey, vice president of EMEA at digital analytics platform Amplitude. “We’ve already seen how the law empowers data protection regulators with the cases of Meta, Amazon, and Google incurring multi-million dollar fines. These examples have intensified the scrutiny faced by tech companies, and the growing imperative to reach compliance.”
GDPR is, by its very nature, global in scope. In many ways, it has led to the enforcement of privacy rights across the world. “GDPR is spreading due to The Brussels Effect,” Bailey explains. “This refers to the EU’s ability to influence the rules and regulations of other countries and impact their citizens’ lives through market mechanisms. Therefore, the bloc’s reach also applies to external organisations that process the data of EU citizens.”
The Brussels Effect has also led to the overhaul of data protection laws across the globe. In the UK, for example, the Government’s revised Data Protection and Digital Information Bill (DPDI) will come into effect this autumn. The bill has been met with resistance from experts via an open letter, who believe it will enable companies to circumvent the EU’s GDPR, diminishing data protection rights. Yet, others see the DPDI as more progressive than the GDPR, reducing business overheads and creating a huge revenue stream for the economy.
The importance of investing in data governance
With the rise of digital products, data is at the heart of every company. This means that data governance also needs to be at the heart of every company’s data strategy.
“Data governance is a set of practices that help ensure the safe and effective use of data. It also helps businesses maintain data quality, which is critical for informed decision-making. Because data governance can be complex, breaking it down into its core components helps establish high data security and integrity,” Bailey explains.
So, what are the major components of data governance that companies need to consider? Policies are one crucial area. Companies need to establish policies around collecting, storing, processing, and using data since it must be protected whilst being stored and transferred. Procedures must also be put in place so that data is handled in compliance with policies. Integrating checks and balances will give the business visibility to ensure they’re being monitored. Businesses also need to consider standards, which are baselines that are often set by a regulator to make sure organisations protect their data in a certain manner, and they ensure a business manages data consistently. Finally, the tools a company uses enforce and adhere to the policies, procedures, and standards.
“Depending on the type of data a company collects and leverages, data governance will look a little different for everyone, but the core components remain the same,” Bailey adds. “It’s not just about complying with laws. Ultimately, proactive data governance increases confidence in the quality of the data companies are using to make decisions. With quality data comes better decision-making, improved customer experiences, and increased customer trust.”
Implementing a strategy
So, what are the best practices to implement data governance easily and efficiently, and which tools can help? Bailey says that breaking this seemingly mammoth task down into smaller chunks will ensure no stone is left unturned.
Establishing roles and responsibilities ensures only the people who need data can access it. To do so, define each role with least-privilege access to maximise the security of sensitive data. When it comes to education, all employees should be trained on company policies and procedures, a non-negotiable for company-wide compliance. Data breaches are often the result of a human error, so this is a critical step in building ironclad data governance. Implementing regular audits will identify risks and ensure the company is still closely following its policies. They also help the business adapt to changes in both internal and external needs or regulations. Finally, monitoring data usage on a consistent basis will help businesses catch any suspicious or unauthorised activity.
Bailey notes that even with a strong strategy in place, companies can encounter challenges. With organisations now collecting vast amounts of data every day, it can be tricky to keep track of everything. What goes where, what can be transferred, what can be leveraged, and what is worth leveraging?
“Implementing tools can help organisations stay compliant, improve their data governance, and collect high quality data. Comprehensive data governance platforms can augment the entire implementation process by helping companies follow their best practices and allowing them to manage data efficiently and effectively, whilst remaining compliant,” Bailey says. “AI should alleviate workloads and help humans improve their work, rather than replacing them. By automating certain processes, companies can save time whilst ensuring strong security. For example, machine learning (ML) solutions can automate the monitoring process and quickly pinpoint anything out of the ordinary. Finally, using an analytics tool can allow businesses to monitor their data-usage and leverage insights to optimise their product.”
Bailey, however, adds that the rapid and constant development of new technologies, such as AI and ML have spurred calls for newer, tighter regulations. “Companies must consider key principles when implementing AI tools for safe and effective use.” These include complying with data and regulations, committing to protecting user data and providing full transparency into when and how AI is used. “Governing bodies are still catching up, but when they do, organisations must adapt to ensure that their tools adhere.”
Privacy and protection remain paramount
The GDPR has brought privacy and protection to the forefront, with companies now having to comply with tight regulation and adapting how to innovate. Investing into data governance to navigate these laws ensures the best of both worlds. Businesses can leverage higher quality and more accurate data to enable better decision making, unlocking growth and success whilst remaining compliant. For customers, they can rest assured knowing that their data is protected.