GDPR risks loom large for businesses: Veritas study
Organisations worldwide fear non-compliance with new European Union data regulation could put them out of business
Nearly half of global organisations are afraid they won’t meet the requirements of the General Data Protection Regulation, (GDPR), with inadequate technology cited as a core challenge
This is one of the findings from a recent global study from information management solutions provider Veritas Technologies.
A further 86% of organisations are concerned that a failure to adhere to GDPR could have a major negative impact on their business. A fifth said they fear that non-compliance could put them out of business. This is in the face of potential fines for non-compliance as high as $21 million or four per cent of annual turnover – whichever is greater.
Intended to harmonise the governance of information that relates to individuals (“personal data”) across European Union (EU) member states, the GDPR requires greater oversight of where and how personal data—including credit card, banking and health information—is stored and transferred, and how access to it is policed and audited by organisations. GDPR, which takes effect on May 25, 2018, will not only affect companies within the EU, but extend globally, impacting any company that offers goods or services to EU residents, or monitors their behaviour, for example, by tracking their buying habits. The study indicates that a whopping 47 percent of organisations globally have major doubts that they will meet this impending compliance deadline.
The research findings from The Veritas 2017 GDPR Report, which surveyed more than 900 senior business decision makers in 2017 across Europe, the U.S. and Asia Pacific, also found that more than 20 per cent (21%) are very worried about potential layoffs, fearing that staff reductions may be an inevitable outcome as a result of financial penalties incurred as a result of GDPR compliance failures.
Companies are also worried about the impact non-compliance could have on their brand image, especially if and when a compliance failure is made public, potentially as a result of the new obligations to notify data breaches to those affected. Nineteen percent of those surveyed fear that negative media or social coverage could cause their organization to lose customers. An additional one in ten (12%) are very concerned that their brand would be de-valued as a result of negative coverage.
Lack of technology hindering GDPR compliance
The research also shows that many companies appear to be facing serious challenges in understanding what data they have, where that data is located, and its relevance to the business – a critical first step in the GDPR compliance journey. Key findings reveal that many companies are struggling to solve these challenges because they lack the proper technology to address compliance regulations.
Almost one third (32%) of respondents are fearful their current technology stack is unable to manage their data effectively, something that could hinder their ability to search, discover and review data – all essential criteria for GDPR compliance.
In addition, 39% of respondents say their organisation cannot accurately identify and locate relevant data. This is another critical competency as the regulation mandates that, when requested, businesses must be able to provide individuals with a copy of their data, or delete it, within a 30 day time frame.
There is also widespread concern about data retention. More than 40 percent (42%) of organisations admitted that there is no mechanism in place to determine which data should be saved or deleted based on its value. Under GDPR, companies can retain personal data if it is still being used for the purpose that was notified to the individual concerned when the data was collected, but must delete personal data when it is no longer needed for that purpose.
Veritas’ research found that less than one third (31%) of respondents believe their organisation is GDPR ready. For those working towards compliance, seven figure investments are the norm. On average, firms are forecasting spending in excess of $1.4m on GDPR readiness initiatives.
“There is just over a year to go before GDPR comes into force, yet the ‘out of sight, out of mind’ mentality still exists in organizations around the world. It doesn’t matter if you’re based in the EU or not, if your organization does business in the region, the regulation applies to you,” said Mike Palmer, executive vice president and chief product officer at Veritas. “A sensible next step would be to seek an advisory service that can check the level of readiness and build a strategy that ensures compliance. A failure to react now puts jobs, brand reputation and the livelihood of businesses in jeopardy.”