We live in an era where the technological world is growing at an exponential rate and information has become one of the most important assets in the market. Increasingly, the information collected by companies is greater (from their employees, customers, business contacts, newsletter subscribers, web users…) and, consequently, the importance of these entities complying with their data protection obligations is also greater, since guaranteeing data privacy and security can be an increasingly difficult challenge.
This fact has resulted in increased regulation on the matter and greater concern from citizens about safeguarding their personal information, and those companies that fail to comply with their data protection obligations face negative consequences such as, among others, hefty fines.
Being aware of the regulations and adapting to them is very important for companies that want to be competitive in today’s market.
Benefits of carrying out periodic data protection audits for companies
Below, we analyze the benefits of companies performing periodic data protection audits:
1. Personal data protection is ever-changing
Data protection law is constantly changing and evolving as it adapts to technological advances, new threats to the privacy of personal information, and because its application depends on the interpretation by data protection authorities.
Additionally, being closely related to new technologies, it must adapt to the new regulations that are constantly emerging, especially in a highly regulated context like the European Union. A clear example of this is the new Artificial Intelligence Regulation and its interconnection with the General Data Protection Regulation (“GDPR”).
In this sense, by carrying out periodic data protection audits, companies can ensure they stay informed about developments in the field.
2. Even small changes can have repercussions in data protection
Many of the activities carried out daily by companies involve the processing of personal data and, therefore, even small changes or those that may seem simple at first glance can affect data protection obligations.
For example, if a company located in the European Union wants to switch CRM providers to one based in the United States (something quite common considering many large tech companies are located there), it must consider that it is performing international transfers of personal data, which entails adopting certain safeguards established in the GDPR.
Periodic data protection audits can help companies adapt to the changes that have occurred and the new obligations that may have arisen.
3. Corporate reputation and the trust of customers and potential customers
Non-compliance with data protection regulations (known either due to a sanction, failure to meet certain obligations towards customers, or even suffering security breaches affecting personal data) can have a very negative impact on a company’s reputation.
As we mentioned at the beginning of this article, citizens are increasingly concerned and aware of the importance of protecting their personal data. Therefore, knowing that an entity does not comply with its data protection obligations can generate a feeling of insecurity, and lead them to seek alternatives that make them feel safer.
Corporate image can also be affected if there is knowledge of non-compliance by the company, which has a great impact on the perception of the company, both by the public and potential investors.
4. Sanctions
Data protection regulations establish various sanctions for cases where obligated parties fail to comply with their data protection duties.
A company that does not comply with these regulations can face fines reaching millions of euros.
The GDPR establishes that the highest fine for non-compliance with data protection obligations can reach 20 million euros or 4% of the total global annual turnover of the fined company, whichever amount is greater.
For all the above reasons, it is recommended that companies carry out data protection audits periodically, at least once every one or two years, depending on the volume of data processed and the specific risk level.
In any case, a data protection audit should be brought forward when there are significant changes in the company or in the regulations, when related faults or vulnerabilities are detected, or when new personal data processing activities are about to be undertaken (for example, when launching new products or services that involve processing any type of personal data).
If you want information about our data protection audit services, you can send us a message at contacto@metricson.com or via our contact form on our website.
Article written by:
Lawyer specializing in privacy and technology contracting
About Metricson
With offices in Barcelona, Madrid and Valencia, and a strong international presence, Metricson is a leading firm in legal services for innovative and technology companies, with a solid specialization in privacy and security. Since its founding in 2009, we have advised more than 1,400 clients from 15 different countries, including startups, investors, large companies, universities, institutions, and governments. Additionally, at Metricson we are experts in identifying and managing security breaches in companies, helping them protect themselves against risks and threats.
If you want to contact us, do not hesitate to write to us at contacto@metricson.com. We look forward to talking to you!