GDPR – How organizations are adjusting to the new era
On 25 May 2018, the world did not stop simply because the General Data Protection Regulation (GDPR) became enforceable. For many organizations, however, the enforcement date became a distraction, an unofficial deadline. In reality, there was no finish line.
We all recall the panic-driven deluge of marketing consent emails from companies this past summer – some we engage with, many we forgot about and others we never saw. That deluge has now slowed down to a trickle.
Also, noticeably quieter are the salespeople peddling “GDPR-compliant” and “one-size-fits-all” solutions. Foreboding news headlines no longer scream about fines of up to 20 million EUR or 4% of total worldwide annual turnover for the slightest misdemeanor.
Three-plus months on from the enforcement deadline, here are a few observations and reflections on how organizations are adjusting to life under the new European privacy and data protection regime.
#1: Business as usual for some?
It would be inaccurate to say that organizations have quickly thrown off the restraints placed on them by the GDPR regarding the processing of personal data. However, it would be equally inaccurate to claim that poor data protection practices have been fully discarded and that we are now living in an era where organizations treat our personal data appropriately.
For Europeans at least, there is evidence of some change in behavior from large technology and global marketing companies, some of whom are already under scrutiny by regulators. For some other organizations, however, GDPR fatigue has begun to set in and organizational priorities are shifting from expensive programs to other hot-button enterprise risk issues.
GDPR compliance initiated a rush of activity that led to the creation of (or updates to) policies, procedures, system inventories and contracts. Some organizations brandished these new shiny documents as their evidence of being “GDPR-ready.”
However, having controls by themselves without a plan to assure that their design and operating effectiveness achieves the desired control objectives is half-hearted. Weak governance and the absence of privacy assurance programs increases the risk of a return to the past.
In reality, control effectiveness cannot be fully determined until after a designated cycle of operation. It may take at least one year before we start to see true changes in organizational attitudes toward data protection.
#2: Integrating privacy into enterprise risk management
Forward-thinking organizations saw GDPR compliance as an opportunity to return to the drawing board and, in some cases, revisit their approach toward enterprise risk management.
Far from simply fulfilling a checklist of requirements, some organizations used their GDPR compliance programs to test the alignment between their operational risk, information security, IT governance and privacy functions.
This also was an opportunity to embed privacy risk into enterprise risk management frameworks, check the health of three-lines-of-defense models, adjust risk tolerance levels and develop new key risk indicators (KRIs) to provide end-to-end assurance.
Where new privacy risk management processes (such as steering committees) have been implemented, they will need time to develop traction. In the long term, the right approach could see organizations improving the maturity of their data protection controls while also improving their overall enterprise risk posture.
#3: The “SAR-pocalypse” did not happen
It just didn’t.
Depending on who you spoke to, the increased public awareness of privacy rights enshrined in the GDPR would unleash an avalanche of data subject access requests (SARs) from incentivized or incensed data subjects.
Executives feared that customers, disgruntled employees and coordinated activists flexing their new regulation-enabled muscles would bombard their service desks with requests seeking to enforce rights of access, erasure and others.
The term 'SAR-pocalypse' (a hypothetical denial-of-service scenario caused by an organization’s inability to manage an excessive volume of SARs) was whispered in hushed tones with real concerns that failing to deal with requests within the required period could attract penalties.
In the weeks just before and after the enforcement deadline, many organizations did in fact see a sharp rise in the number of data subjects requests they received. However, many of those requests originated from people annoyed with the panic mass mailing campaigns in the weeks prior to the enforcement date. Understandably, many of the requests were for erasure and account deletion.
A retail organization I spoke with noted a higher-than-usual volume of requests in the weeks leading up to 25 May. Requests to be erased reached an all-time peak in the weeks following. However, by mid-June, those numbers had begun to drop. By the end of August, request volumes had returned to pre-25 May levels.
I am yet to hear of any organizations admitting that their service desks have toppled over due to a flood of SARs. However, organizations should not trivialize the need to keep their personal data flows up-to-date and to keep testing the effectiveness of their process for responding to SARs and other GDPR-related queries.
#4: Waiting to see what the regulators will do with penalties
‘Data Breach Scapegoats Wanted!’, wrote one satirical industry commentator on social media.
While Europe’s regulators adjust their oversight machinery to be able to effectively police the GDPR, there is a collective holding of breath by organizations waiting to see what precedents will be set with post-25 May financial penalties.
Perhaps the most high-profile data privacy related incident to hit the headlines since the GDPR enforcement deadline was the one involving the infamous Cambridge Analytica. For its part in the scandal (which preceded the 25 May enforcement date), the UK Information Commissioner’s Office (ICO) fined Facebook £500,000 (the maximum fine under the old UK Data Protection Act 1998).
Data privacy breaches continue to be reported, and post-25 May, the UK regulator has continued to take enforcement action against erring organizations. For example, British Telecommunications plc (BT) was fined £77,000 (hardly 4% of their global annual turnover) for sending nuisance emails to customers.
When scrutinized through the lens of Article 83 (“Each supervisory authority shall ensure that the imposition of administrative fines...in respect of infringements...shall in each individual case be effective, proportionate and dissuasive”), it might be a while before a “GDPR-scale” maximum penalty is imposed on any organization.
The absence of scapegoats may be because Europe’s regulators are either overwhelmed with data subject complaints or simply biding their time until they find the right opportunity to set a dissuasive precedent.
Rather than waiting for precedents and second-guessing regulators, organizations should continue to improve their incident prevention, detection and response procedures while maintaining a state of readiness for potential data breaches.
#5: After the hype, what comes next?
As the GDPR hype starts to wane, organizations should not lose sight of the wider benefits that can be derived from an improved attitude toward data protection.
For example, there will continue to be opportunities to improve data governance and unlock business insights from the personal data they lawfully process if organizations maintain their discipline around personal data collection and processing.
As informed consumers continue to exercise their enhanced consent rights under the GDPR, available inventories of user data are likely to come under pressure. By focusing on data quality (including processing data that is “adequate, relevant and limited to what is necessary”) rather than scale, organizations can improve engagement at different points within the customer journey.
The Privacy & Electronic Communications Regulations (soon to be ePrivacy Regulation) remains a hot topic and the next keenly anticipated regulation from Europe. Correctly implementing GDPR requirements should have placed most organizations in a good position to adopt the requirements within the ePrivacy regulation.
While senior executive support for GDPR remains warm, Data Protection Officers need to test their newly minted powers and ensure that their independence (including avoiding conflicts of interest with other tasks and duties) goes beyond qualities and responsibilities listed in a job description.
There is no turning back
The reality for many organizations is that GDPR program funding and resources will move elsewhere. Data privacy champions will change roles. Vendors will come and go. Applications will be developed and retired. Meanwhile, more countries and jurisdictions (like California) are likely to strengthen their own data privacy laws. The journey never ends.
Somewhere in all of this, care must be taken to avoid the slow erosion of data protection controls arising from negligence and poor governance and a return to the old ways. Seeing the GDPR not as a checklist but as an opportunity to transform corporate attitudes and embed good data protection practices will help organizations thrive under the new privacy regime in the long-term.
(This post originally appeared on the ISACA blog site, which can be viewed here).