Modern businesses are driven by data. Business owners rely on various data for decision-making and effective functioning. While dealing with data, the business owners are responsible for storing, protecting, sharing, and using it the right way. In the purview of the various data scams coming to light that involved various big organisations, it is quite evident that data mismanagement and data misuse can tarnish the organisation’s reputation severely.

Also, organisations face a risk of financial penalties if they have acted unethically or carelessly to prevent data misuse. Over the last few years, the number of new rules and regulations that businesses need to comply with, has increased significantly as the authorities are taking control of the huge amounts of data stored in the servers and cloud worldwide. The fines imposed in the light of data security breaches have also increased, making data security more important than ever before.

What is data compliance?

Data compliance refers to the rules that the businesses must follow to ensure the sensitive digital assets it possesses like financial details and identify information of the individuals are guarded against loss and misuse. The compliance process is complex, and there are many rules that the business should adhere to, such as government imposed laws, international laws, industry-specific laws, etc.

It is paramount for businesses not to confuse the data compliance solutions with data security. While both the processes have the same goal, i.e., to minimise the risks that the company is exposed to, the compliance only ensures that the businesses meet the minimum legally-acceptable standards.

There are different types of compliance standards that businesses must be aware of. The top 5 data compliance standards designed to protect personal information data that the companies must adhere to are discussed below:


Sarbanes-Oxley Compliance or SOX deals with corporate fraud by mandating businesses to enact internal checks and procedures for financial reporting. It is more about financial reporting than data protection, and the IT department of the company has a major role in helping the company be SOX compliant. For example, the IT department may have to put a system in place to automate the firm’s financial reporting and support the CEO and the CFO get the reports in real-time.


The Health Insurance Portability and Accountability Act, 1996 sets out how the healthcare industry organisations ensure the safety and confidentiality of their health records. The penalty for failing to protect these data can be severe. According to the HIPAA data compliance standard, all electronic health records must be restricted to only those who have a valid reason to view them; HIPAA requires the data to be encrypted and a robust access control system.


The Federal Information Security Management Act protects government data against natural disasters and man-made activities. The act mandates the agencies to conduct regular reviews (annually) to ensure the information safety and information safety programs run efficiently.


This data compliance standard applies to all businesses that run credit card payments. The Payment Card Industry Data Security Standard requires the company to process, store, and transmit the credit card-related information in a secure manner. Even if the businesses use a third-party’s services to handle card payments, they are responsible for ensuring the safety of the individuals’ card-related information.


The General Data Protection Regulation is one of the newest standards that came into force in May 2018. This standard lays out a wide range of rules regarding individuals’ right to know about the data the businesses have about them and how they should process this data and the rules for reporting the breaches.

While there are several rules within the regulation, most of it can be linked to three basic principles – getting consent, minimizing the amount of data that the businesses hold, and ensuring the rights of data subjects.

While the above-mentioned are the most common data compliance standards that are followed worldwide, there many other compliance standards that may not necessarily apply to data protection. So, if you are a business owner and are planning to set up a data centre or a cloud solution, it is paramount that you consult an expert to ensure that you meet the data compliance standards.