Compliance is an essential consideration for every single business, and the rules are different in each industry. Healthcare organisations treating American patients, for example, are famously subject to the Health Insurance Portability and Accountability Act (HIPAA). Australian financial and insurance firms are no better off. Legal requirements are strict, and the consequences of non-compliance can be dire.
Unfortunately, there is also less information available about this field. And with the rules constantly changing, it can be difficult to identify what exactly you must do. How can you be expected to maintain compliance, and avoid penalties, if you don’t even understand what you’re supposed to do?
That’s the problem we’re here to solve. So let’s talk about compliance: what does it mean, how can you achieve it, and why should you even care?
Understanding Compliance: What Is It?
Compliance is the process of adhering to laws, regulations, and standards that outline how your business should behave. In the IT space, this usually relates to security and privacy. Government bodies consider it your responsibility to protect the data your business collects and prevent it from being compromised during a breach. This means implementing strong security measures, internal policies, and controls.
Why IT Compliance Management Matters
In high-risk industries such as finance and insurance, failure to adequately comply with all legal requirements can result in severe consequences. Under the Privacy Act, you could even be subject to fines worth millions of dollars. In a sector where trust is everything, such an incident could follow your reputation years into the future.
In comparison, effective compliance promises tantalising benefits:
- Loyalty: By demonstrating your commitment to protecting sensitive data, you build trust and strengthen client relationships.
- Efficiency: A structured set of compliance policies streamlines certain processes, reduces redundancy, and keeps everyone on track.
- Security: Stronger security means fewer cyber-attacks and data breaches.
- Stability: All of the above contribute to greater financial, operational, and reputational stability, improving your chances of long-term success.
Compliance Management in IT: A How-To Guide
1. Identify Applicable Regulations
Before you can achieve compliance, you must first understand the rules. This means determining which regulations apply to your business, and what the requirements are. Some common standards for Australian finance and insurance firms include:
- The Privacy Act: Australia’s main data protection law, which requires strong protection of sensitive personal information and imposes heavy penalties for disobedience.
- The Payment Card Industry Data Security Standard (PCI DSS): A global standard regulating the handling of payment information.
- The Notifiable Data Breaches (NDB) Scheme: An Australian regulation requiring that certain types of data breach be promptly reported to the authorities for further investigation.
- Foreign Regulations: Even if you are located in Australia, certain overseas laws may still apply to you. For example, you are subject to the GDPR if you ever serve EU citizens in any capacity.
2. Conduct an Audit
Using the information you just collected, perform an audit of your existing IT infrastructure. This involves creating a comprehensive inventory of all data and systems, and then identifying potential compliance issues within your current environment. You will also need to carry out a full risk assessment, outlining potential threats and vulnerabilities.
3. Implement Policies and Controls
Once you have a clear picture of your biggest risk factors, it’s time to address them. Develop a strategy that identifies:
- Which solutions will most effectively solve your problems (for example, role-based access controls, multi-factor authentication, or network segmentation) and why
- When they must be implemented
- What the adoption process will look like
- Which resources will be required in order to complete this task
4. Educate Staff
Your workforce is just as important as the technological measures you implement. Teach employees why compliance matters, what the rules are, and where your new measures fit into this. Provide additional support while they learn the new systems and policies. If mistakes are made along the way, treat this as a learning opportunity.
5. Monitor and Maintain
Any effective compliance program is ultimately an ongoing process. Keep an eye out for any new developments, and regularly adjust your strategy. At bare minimum, you should update the plan each year, after a breach has occurred, and when you first hear about a new regulation.
Bonus: Consider Outsourcing
Compliance can be extremely difficult to maintain, especially over a long period of time. Given the high stakes, this is not an area you can afford to fail in. If you’re uncertain whether you can achieve compliance on your own, consider outsourcing to an expert. While this does cost a monthly fee, they provide expert guidance that could potentially save your business thousands of dollars in the future.
Keep Your IT Compliant and Avoid Penalties
Compliance is not a suggestion, or a simple box to tick. It is a fundamental part of ensuring long-term stability and success. In high-risk industries such as finance and insurance, it’s non-negotiable. Take the time needed to properly understand and comply with your relevant regulatory standards. It might seem difficult, but it is significantly easier – and cheaper – than the alternative.
Many businesses underestimate just how important their technology is for compliance management. The truth is, it can make a huge difference. Read our article to learn how.
FAQs
What Are the Consequences of Ignoring Compliance?
Failure to obey regulations can result in security breaches, financial instability, reputation damage, data loss, and even compliance audits.
What’s the Difference Between IT Security and IT Compliance?
These are two different but related concepts. Security focuses on preventing cyber-attacks, while compliance is about adhering to the requirements set by regulatory bodies. Usually, you will accomplish one by achieving the other, as they demand very similar actions. Access controls, for instance, help you maintain both security and compliance.
Which Laws and Regulations Apply to Finance and Insurance Firms?
The exact laws that apply to you will depend on your size, sector, customer base, and the types of data handled. However, at a bare minimum, all Australian businesses are subject to the Privacy Act. This is a good place to start.
Are IT Compliance Frameworks Useful?
An IT Compliance framework, such as the Essential Eight or NIST, can be very useful. It helps guide your efforts, strengthening your security posture and improving your compliance with relevant laws at the same time.