Changes in how online businesses interact with customer information are happening fast. If your business has a digital platform, then you are likely to be affected by the shift. This regulation was passed in 2016 and there was a provision granting a 2-year grace period. Therefore, the enforcement of digital compliance is set to start in 2018.
Although the deadline is approaching, most businesses are going on with their businesses oblivious of the impending enforcement. Before long, online businesses will be required to observe the regulations and this article will look into opportunities and challenges tied to the digital compliance.
What is digital compliance?
This is basically a number of rules and regulations that are put in place to govern how personal information is handled. The regulation goes further to specify that personal information is any data that can be used to identify an individual whether indirectly or directly. Therefore, basic information like an email address, name, contact information, IP address and geographical location and social media posts is covered therein.
When the digital compliance takes effect, your business will have to handle basic customer data in the same manner that you have handled sensitive information like payment details.
In an effort to ensure all businesses are observing the law, noncompliance will be countered by huge fines. Currently, the fines are standing at 4% of your annual revenue or 20 million Euros depending on the amount that is higher.
Which businesses are affected?
Basically, businesses that are operating from the EU are at the frontline. However, the regulation also applies to any business that is handling personal data from customers in the EU. Even when you are not taking payments from the EU residents, you need to comply.
Technically, any business located outside the EU is subject to the compliance as long as it’s handling data from customers in the European Union. Considering the wide scope, most businesses are bound to observe the regulation.
What this means for online businesses
As a consequence of the regulation, the customer is being handed back the ownership of their personal data. If your business intends to remain compliant, this means you might have to change the way you collect and store the data in question.
The opportunity
When you reflect on the compliance regulations as a whole, the affected businesses will be prompted to rethink their method of collection, use, and processing of data. In the process of auditing the current data processing practices, you’ll need to think about the following.
- The types of data collected from both clients and employees
- Whether all the data gathered is necessary
- The persons responsible for safeguarding the data in your business
- The duration that collected data can be stored on your systems
Conclusion
Today, customers are more informed about the collection and use of their personal data. As such, the first businesses to uphold transparency and compliance will win more customers than their competitors. Considering the fact that digital markets have become quite competitive, you can’t afford to overlook the aspect of trust in your interactions with existing and potential customers.
