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The Data Privacy Imperative
20 min read
20 min read
The data privacy regulatory challenge also presents significant opportunities that undoubtedly transcend the mere mitigation of compliance risk.
The demands of digital life have fundamentally transformed the data processing landscape and corresponding privacy protection regimes. Consumers are becoming increasingly more cautious about sharing data and more insistent on retaining control over the handling of their information. As a result, regulators are racing to curtail proliferating breaches and put in place badly needed safeguards to protect citizens.
Evolving data privacy regulations are constantly shifting the data management responsibilities of companies. In response to these rapidly changing regulatory requirements, businesses have adjusted their approach to compliance and data processing. With time, companies have become aware that data governance presents an opportunity to create a point of differentiation and a source of competitive advantage.
In attempt to reconcile the idea of privacy with the dynamics of a growing digital economy, governments have adopted new regulations, such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the United States. However, jurisdictions across the world have reached markedly different conclusions about the desired equilibrium between privacy imperatives and commercial interest.
The European Union started with the GDPR, which enhanced consumer protections and provided users with more control over their data. Only four years after the GDPR entered into force, the EU introduced a new regulation called the European Data Act. This proposed legislation is intended to stimulate data-driven innovation and cultivate a competitive data market.
Other nations are also following suit. The United Kingdom has introduced a post-Brexit data protection reform that revises existing EU standards and moves the needle towards a more business-friendly approach. However, this digression from the current UK data protection regime, which essentially mirrors the GDPR, will inevitably disrupt business continuity across the continent.
In the United States, after years of solid strides in advancing the data protection regime at the state level, Congress is now the closest it has ever been to passing comprehensive federal action. The privacy protections offered by the proposed American Data Privacy and Protection Act (ADPPA) have exceeded the expectations of many. If passed, this bill would present a meaningful compromise that would unify the existing patchwork of privacy laws currently in place across the country.
In accordance with their European integration agendas, all six Western Balkans countries have taken steps to harmonize data privacy legislation with EU standards. While some have enacted new laws that replicate the provisions of the GDPR, others have chosen a different route and adopted secondary legislation that aligns existing regulations with the new EU norms.
Countries across the region have also established or transformed relevant authorities for data privacy and protection. In doing so, they have provided designated addresses where companies and consumers can present concerns regarding data management. In most cases, such authorities function as independent agencies.
The essential equivalence between data privacy regimes in the Western Balkans and the EU facilitates considerable clarity and continuity for businesses. As a rule of thumb, companies that are GDPR compliant should not expect to encounter any issues related to data privacy when operating in the Western Balkans.
Fragmentation of the regulatory landscape has presented a challenge for companies with international operations. Diverse requirements emerging across different jurisdictions and markets have diminished the competitive advantages of scaling operating models across geographies. Companies familiar with a climate of converging standards are now being faced with progressively localized conditions.
This perplexing medley of regulations has created an impetus for businesses to deviate from their traditional homogenizing approach to data management practices. Organizations have become more attentive to the peculiarities of regulatory regimes, upgraded data infrastructures, and elevated data governance procedures to meet diverging standards. However, the considerable investments associated with implementing such reforms have led to a significant spike in compliance costs.
Effective leveraging of intelligent data use is helping brands build digital trust and enhance customer relationships. As companies seek to provide seamless services across countries and create personalized experiences for their customers, several key steps can make the difference:
Assess the regulatory demands of each pertinent jurisdiction
Review respective potential market opportunities
Target the optimal location for the establishment of data operations
Select local providers to complement processing capabilities
Allocate appropriate budgeting
Establish infrastructure accordingly
Develop protocols for data management and migration
With the right systems in place, companies can bolster their readiness to comply with difficult aspects of regulatory requirements, such as the deletion and transfer of data upon the request of individual consumers. They can also develop more robust capabilities for applied analytics and take advantage of invaluable machine-learning tools. In doing so, companies will not only meet the data privacy imperative but also harness the power of data itself.
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