Data protection in business is critical to any organisation’s security strategy. Companies must ensure that customer data, employee data and company information are secure and protected from any potential threats.
This article provides an overview of the importance of data protection in business, the difference between UK GDPR and EU GDPR, best practices, and what companies should know to stay compliant.
Before reading this guide, be sure to refresh your brain with all the relevant terminology with our Data Protection and GDPR Glossary of Terms (A-Z).
What’s in this guide?
- What is Data Protection?
- Why Data Protection is Important
- What is Personal Data?
- What is Sensitive Data?
- Is There a Difference Between UK GDPR and EU GDPR?
- What Are The Key Principles Of Data Protection?
- Benefits of Data Protection
- Risks of Not Having Data Protection
- Data Protection Best Practices
- How Does the Data Protection Act Affect Employees?
- How to Gain Consent from Customers
- When to Register Your Company with the ICO
- Data Protection Checklist For Small Businesses
- Data Protection Day with Trust Hogen
What is Data Protection?
Data protection is the process of safeguarding data, such as personal and sensitive information, from exploitation or unauthorised access and misuse.
It involves creating policies and procedures to protect data and using technologies to encrypt and store data.
The Data Protection Act 2018 (DPA) is a UK law that regulates data processing activities and helps ensure that personal data is handled in a responsible way. The General Data Protection Regulation (GDPR) is an EU regulation that sets out rules for the processing of personal data by businesses and organisations operating within the European Union.
Why Data Protection is Important
Data protection is essential for any organisation. It ensures that personal data is stored and processed securely, in compliance with the relevant laws and regulations.
This helps to protect individuals from identity theft and data breaches, while also protecting companies from costly fines or reputational damage resulting from non-compliance.
Compliance with the Data Protection Act and UK GDPR will help companies build consumer confidence and maintain customer loyalty – but more on that later on in the guide.
To find out more about why data protection is important and some key data protection best practices, read our blog post!
What is Personal Data?
Personal data is any information which can be used to identify a living individual.
This could include a person’s name, home or email address, date of birth, gender, nationality, Internet Protocol (IP) address, or location data. Anything that can prove your physical presence somewhere is also classed as personal data.
Under the UK GDPR, any company or organisation processing this type of data must ensure it is stored securely and in compliance with the relevant data protection regulations.
What is Sensitive Data?
Sensitive data is information that requires extra protection. Typically, this includes sensitive personal data such as biometric or genetic data, religious or philosophical beliefs, racial or ethnic origin, trade union membership, sexual orientation and health data.
When collecting any type of data from customers or clients it’s important to be aware of the types of data you are collecting, not just to comply with data protection regulations, but also to ensure that it is used responsibly.
Is There a Difference Between UK GDPR and EU GDPR?
Following the UK’s exit from the European Union (EU), the United Kingdom introduced two essential pieces of legislation to ensure data protection laws in the UK remain adequate and GDPR-compliant. These were called the Data Protection Act 2018 and UK GDPR.
The UK GDPR applies to companies that process the personal data of people in the UK, while the EU GDPR applies to companies processing data throughout Europe and the rest of the world.
Although they are relatively similar, there are a few key differences between UK GDPR and EU GDPR:
- Consent: In the UK, an individual must be 13 years or older to give consent to their data being used. However, in the EU the age of consent rises to 16 years.
- Enforcing bodies: The Information Commissioner’s Office (ICO) monitors and enforces data protection laws in the UK, while the European Data Protection Board (EDPB) does the same in the EU.
- Areas of jurisdiction: If a company operates in the UK and EU, it must comply with both UK and EU GDPR. If a UK company doesn’t operate in the EU, it must only abide by UK GDPR.
- Reasons why data is collected: UK GDPR allows personal data to be collected for security, immigration or intelligence service reasons. Only in certain circumstances can data in the EU be collected for these reasons.
To find out whether EU GDPR principles apply in the UK, the difference between data protection and GDPR, and more, read our blog post – is there a difference between UK GDPR and EU GDPR?
What Are The Key Principles Of Data Protection?
The key principles of data protection are enshrined in Article 5 of the General Data Protection Regulation. These principles must be followed by any organisation which holds and processes personal data, such as names, addresses, contact details or bank account information.
Although GDPR principles will apply to UK companies that do business within the EU, not every UK business will need to comply with the EU GDPR.
That’s why the Information Commissioner’s Office (ICO) has set out a series of data protection principles that apply to companies functioning within the UK. They are similar to the principles laid out in the GDPR, but there are some noticeable differences between them.
The seven key principles businesses must follow for UK GDPR and data protection compliance are as followed:
All personal data must be processed lawfully, transparently and in a manner that’s fair, meaning that explicit consent must be gained before data is processed.
Your reasoning for processing data must be clearly established and communicated to an individual. This is typically done through a privacy notice.
Only the smallest amount of data required to complete the desired purpose must be collected. Any data that doesn’t relate to your stated purpose (e.g. address or mobile phone number) should be avoided.
All the data stored should be up-to-date and accurate. Any incorrect or incomplete information should be corrected or deleted. Individuals have the right to rectify their data, especially if it’s incorrect.
How long each company keeps each piece of data must be justified. Data controllers must also demonstrate that the data is safely and securely stored, to protect it from unauthorised access or alteration.
Once the retention period of a piece of data has expired, a data controller must delete the data. Data subjects also have the right to request their data be erased at any time, and data controllers must comply.
All personal and sensitive data must be kept secure from threats at all times, both internally and externally. Security measures must be introduced and implemented to protect this data from unauthorised access or destruction. We’ll touch on some data protection best practices later on in the guide!
Each organisation must be able to demonstrate they have appropriate measures in place to prove their data protection compliance.
To find out more about each principle and other factors to consider with UK GDPR compliance, read our post on the key principles of data protection.
Benefits of Data Protection
The key benefits of data protection compliance are:
- Increased trust from customers and other data subjects
- Improved customer experience
- Greater efficiency when working with personal data
- Protection from legal action, fines or reputational damage caused by data breaches
- Strengthened data security practices
- Enhancing your organisation’s overall brand image
Risks of Not Having Data Protection
However, not complying with the DPA can have serious consequences for you and your company, such as:
- Fines from the ICO
- Legal action from data subjects
- Loss of customers or clients due to a lack of trust in your organisation
- Reputational damage caused by data breaches
- Poor customer experience and reduced efficiency with personal data.
Data Protection Best Practices
Now you know the benefits of DPA compliance (and what could happen if you fail to comply), it’s time to look at the best methods of implementing data protection within your workplace.
Below are seven key practices that can be implemented today to help your organisation reach data protection compliance:
1) Data erasure: All data should be erased as soon as it is no longer necessary.
2) Security: Implement security measures, such as firewalls and encryption to protect data from unauthorised access.
3) Data loss prevention: Establish processes that prevent data loss and regularly monitor them.
4) Access management: Ensure each person with access to data has appropriate permissions and privileges.
5) Privacy notices: Provide privacy notices that clearly explain how data is collected, used and stored.
6) Data inventory: Take a full inventory of all data held within the organisation.
7) Training: Ensure all staff are aware of the importance of data protection compliance and have the necessary skills to comply with GDPR
How Does the Data Protection Act Affect Employees?
Employers must ensure their employees’ personal data is kept secure and confidential.
That’s why robust security measures must be put in place to safeguard this information from misuse, damage and destruction.
Under the Data Protection Act, employers must follow the seven principles set out earlier in this guide in order to be compliant.
As per the Data Protection Act, all employers must:
- Gain explicit, informed consent from employees before collecting their personal data. There must be a lawful basis for processing this data.
- Inform employees of how their data will be used and stored.
- Ensure appropriate security measures are put in place to avoid unauthorised access or misuse.
- Allow employees to access and make amends for any errors in their personal data. They can request to have their data deleted at any time.
- Clear and accessible records must be kept, especially of any data that is regularly processed. This must coincide with regular training, auditing and documenting processing activities.
- Data must only be kept for as long as it’s needed.
- Public bodies must employ a Data Protection Officer (DPO) to oversee data protection compliance.
- Put a plan in place for responding to subject access requests (SARs).
- Respond quickly and effectively to any data breaches that are discovered. Transparent communication with those affected is vital in this conversation.
- Regular data breach checks must be undertaken to identify any potential areas of risk.
Discover several extra data protection rights as an employee and how to create an employer’s data protection action plan in our post on how the data protection act affects employees.
How to Gain Consent from Customers
As mentioned earlier in this guide, any data collected must have an individual’s explicit, informed consent, as per the DPA. But how is this consent gained?
Below are several key things to consider when collecting an individual’s personal and sensitive data:
- The law states that customers must be provided with clear, specific, granular and concise information about what their data will be used for and how long it will be kept.
- Consent can be obtained verbally or in written form, but your consent requests must be separate from other terms and conditions.
- Genuine choice and control must be offered to people, including the ability for them to withdraw consent. You should tell them how they can withdraw their consent.
- If you’re using an opt-in function, do not rely on pre-ticked boxes.
- Any third parties who will rely on consent must be named.
- Evidence must be kept to demonstrate consent. This will include who, how, when and what you’ve told people.
- Consent should not be a precondition of your business’s service, so avoid it if possible.
When to Register Your Company with the ICO?
In addition to the key principles of data protection, most UK businesses may need to pay a data protection fee to the Information Commissioner’s Office (ICO). The reason for this is to support the ICO’s work and data protection compliance in the UK.
All data controllers must notify the ICO with details of their processing activities. This is a legal requirement, and the fine for non-compliance can be up to £4,000.
You are exempt from paying the ICO if you only process personal data for one (or more) of the reasons below:
- Advertising, marketing and PR
- Accounts and records
- Not-for-profit reasons
- Personal, family, or household affairs
- Staff administration
- Judicial functions
- Public register maintenance
- Processing personal data without the use of an automated system (e.g. a computer).
If you’re unsure if you must pay a data protection fee, we recommend using the ICO’s self-assessed registration.
Once registered, data controllers must renew their notification every year, unless their processing activities are exempt from the DPA.
After experiencing a breach, your company may be issued with an ICO Enforcement Notice, an Information Notice (where you must provide the ICO with information for their investigation) or an Assessment Notice (for a compulsory audit).
If you fail to comply with the specified steps laid out by these notices, your company could face a fine of up to £17.5 million or 4% of your total worldwide income.
Remember: If your company deals with data from people in other countries then you might need to register with the EU’s General Data Protection Regulation (GDPR).
Data Protection Checklist For Small Businesses
Now we’ve covered everything data protection, let’s run over essential steps small businesses should take to ensure they are compliant:
- Frequent audits: It’s essential to know what data you have and where it is. Conducting regular audits can help you ensure your data is secure, but also make you aware of where the data is coming from, how it’ll be used and where it’s going.
- Training staff: Training employees on data protection and cyber security is key. By implementing data protection training and awareness in the workplace, all staff should be aware of the company’s data protection policy and any relevant EU regulations, such as GDPR.
- Record data and review security measures: Ensure that all policies and procedures in regard to handling and processing data are clearly written and updated regularly.
- Secure systems: Ensure that data is stored properly and securely. Any software or applications used by your business should be kept up to date with the latest security patches.
- Delete data: Any data that is no longer needed or used must be deleted.
- Subject access request plan: Subject access requests must be responded to within one month. Preparing a plan in advance of any such requests will help you quickly gather the required data and respond accurately.
- Create a data breach plan: In the event of a security breach, you need to know how to respond quickly and effectively.
- Privacy policy review: Privacy policies for your customers and suppliers should be regularly visited and updated.
- Consent review: Regularly review how you seek, record and manage consent. People should be able to opt-in and opt-out with ease.
- Delegate responsibility: Appoint someone, such as a Data Protection Officer (DPO), to be responsible for data protection across the business.
- Check age: If your business deals with data from people under the age of 13 (16 in the EU), you must make sure that they have permission from a parent or guardian before collecting their data.
- Supply chain due diligence: Make sure that any third parties you work with are also compliant with the DPA and UK GDPR.
- Cross-border compliance: If you transfer data outside of the UK, make sure to check that any data protection laws in those countries comply with GDPR.
By following this checklist and understanding the basics of data protection, you can ensure your business is compliant with the DPA and keep it safe from cyber attacks. Good luck!
Data Protection Day with Trust Hogen
Thank you for reading our guide exploring data protection in business. We hope you learnt something new.
You may already know, but over the course of January, we have dedicated an entire month to data protection in order to celebrate Data Protection Day on January 28th.
To learn more about data protection, visit our knowledge page and check out our previous articles!
Trust Hogen is a leading independent managed security service provider (MSSP) that offers comprehensive data protection as a service. Our team of experts are here to help keep your data safe. Get in touch today to find out more.
Stay secure and happy Data Protection Day!