What is GDPR?
General Data Protection Regulation (GDPR) is a stringent, set-in-law regulation that’s come into effect in the European Union, on May 25, 2018. The regulation replaces the 1995 Data Protection Directive and imposes stringent new rules around protecting personal data, that all businesses – not just those based in the EU – need to follow.
The GDPR aims to provide individuals with greater control over their personal data. This applies to any data that can directly or indirectly identify a person, including names, photos, email addresses, bank details, updates on social networking websites, location details, medical information, or a computer IP address.
The regulation stipulates that businesses must safeguard the personal data and privacy of EU citizens for transactions that occur within EU member countries. The GDPR also regulates the exportation of personal data outside the EU.
Understanding the Implications of GDPR
It’s essential for business owners to understand the provisions of the GDPR because it affects every company that processes the personal data of people living in the EU, regardless of where the business is located.
A company will face heavy fines if they are found to be in non-compliance with GDPR standards, up to 4% of annual global turnover or €20 million—whichever is greater. The fines vary depending on the severity of the breach and how much the company attempted to protect an individual’s data.
The GDPR also simplifies the regulatory environment for international businesses by unifying the regulation within the EU. This means that it interacts with every aspect of a business that involves the processing of personal data.
The Importance of GDPR for Business Owners
Business owners should care about the GDPR for three main reasons.
1. Severe Penalties: The GDPR introduces tougher fines for non-compliance and breaches, making it a top priority for businesses. Not just large corporations, but small-to-medium sized businesses are also within the GDPR’s sights to ensure compliance.
2. Increased Trust: Compliance with the GDPR can also benefit businesses by creating a level of transparency and trust with customers. By demonstrating that your business takes data protection seriously, you can improve your company’s reputation and potentially drive more business through increased customer confidence.
3. Data Governance: GDPR provides businesses with the impetus to improve how they handle data and the insights that flow from it. Cleaning up data, knowing exactly where and how it is stored, and understanding how it flows within and outside an organization is a good business practice.
Business owners must make their businesses GDPR compliant. It may involve some work, but the potential penalties for non-compliance make it a necessary effort. Moreover, compliance contributes to better customer relations and improved data governance, which are beneficial in the long run.
The GDPR is here to stay, and business owners cannot afford to ignore it. It strives to put the power back into the hands of the consumer, giving individuals more rights to their data without the fear of businesses mishandling their information. By becoming GDPR compliant, business owners can show their commitment to privacy, which only improves trust and the overall customer relationship.
Remember, protecting your customers’ data isn’t just good business practice, it’s a legal necessity. And while GDPR may feel overwhelming, it’s all about doing what’s best for your customers—and what’s best for your customers is ultimately best for business.