Data Compliance: Meaning & Key Regulations 

Data breaches and compliance violations are on the rise, with regulatory fines reaching $19.3 billion globally in 2024 for non-compliance with privacy laws like GDPR, HIPAA, and CCPA​. As governments and regulatory bodies tighten their grip on data protection, businesses that fail to comply not only face heavy penalties but also suffer reputational damage, operational disruptions, legal consequences, and loss of customer trust.

With frameworks like ISO 27001, SOC 2, and PCI DSS constantly evolving, compliance is increasingly complex, especially for organizations operating across multiple regions.  

Manual compliance tracking is inefficient—automated compliance management solutions streamline audits, monitor risks, and ensure adherence to regulations. A proactive compliance strategy helps businesses protect sensitive data, maintain customer trust, and avoid costly penalties.

What are data compliance regulations?

Data compliance regulations establish legal and industry-specific standards for how organizations collect, store, process, and protect sensitive information. Their primary goals often include ensuring data accuracy, integrity, and transparency, protecting personal and financial data from breaches and unauthorized access, and establishing requirements for secure data storage, retention, and lawful disposal.

Regulatory laws such as GDPR, HIPAA, and CCPA, along with industry standards like PCI-DSS, set benchmarks for privacy and security across industries, governing diverse data sources like consumer records, employee information, and financial transactions.”

Beyond legal obligations, compliance frameworks help organizations mitigate cyber threats, enforce security policies, and establish accountability. Non-compliance can result in hefty fines, legal action, and reputational damage.

Why are data compliance standards important?

With the rapid expansion of digital services, businesses collect vast amounts of personal data, making cybersecurity risks and regulatory scrutiny more intense than ever.

According to IBM’s Cost of a Data Breach Report, the average cost of a data breach in 2024 reached $4.88 million, a 10% increase over the past year and the highest total recorded. This highlights the financial and operational risks of poor data management. High-profile incidents, such as the Facebook-Cambridge Analytica scandal and T-Mobile’s 2023 breach where the data of 37 million users was stolen, reinforce the need for strong data protection.

Non-compliance consequences include financial penalties, legal liabilities and lawsuits, loss of consumer trust, and reputational harm. To mitigate these risks, organizations invest in standards like SOC 2, ISO 27001, NIST 800-53, and CSA STAR, which help them adapt to evolving threats while ensuring compliance with global regulations. 

Beyond avoiding penalties, a robust compliance program strengthens security, fosters customer confidence, and provides a competitive edge.

What data compliance regulations should you follow?

Following the right data compliance regulations depends on your industry, geographic location, and business operations. Failure to comply with the appropriate regulations can result in legal penalties, reputational damage, and financial losses. Here are key factors to consider when determining which data compliance regulations apply to your organization:

Industry-specific regulations:

Certain industries have specialized data protection regulations or best practices that organizations must adhere to:

1. Healthcare: The Health Insurance Portability and Accountability Act (HIPAA) governs the handling of protected health information (PHI) in the U.S.
2. Finance: Financial institutions may need to comply with regulations such as the Gramm-Leach-Bliley Act (GLBA), which mandates safeguards for consumer financial data.
3. Payment processing: The Payment Card Industry Data Security Standard (PCI DSS) applies to any organization that processes, stores, or transmits payment card data, regardless of industry.
4. Technology and cloud services: The ISO/IEC 27001 standard and SOC 2 framework help organizations establish robust security controls for information management.

Geographic data protection laws:

Different jurisdictions have unique regulations that apply based on where an organization operates or where its customers are located:

1. Global: The General Data Protection Regulation (GDPR) applies to any organization processing personal data of EU residents, regardless of where the company is based.
2. United States: The California Consumer Privacy Act (CCPA) and Virginia Consumer Data Protection Act (VCDPA) govern personal data protection in specific states.
3. Asia-Pacific: Countries like Japan (APPI), Australia (Privacy Act 1988), and China (PIPL) have distinct privacy laws regulating data use.
4. Canada: The Personal Information Protection and Electronic Documents Act (PIPEDA) mandates data protection compliance for businesses handling personal information.

Additionally, Scrut’s Compliance Framework Finder helps businesses identify the right framework, ensuring they stay on the best path to achieving compliance.

5 key data compliance regulations

As governments and regulatory bodies intensify their focus on data security, businesses must comply with an increasing number of privacy laws and data protection standards to maintain their business and meet customer expectations.

Understanding different compliance standards is crucial for organizations to meet their regulatory obligations. Here are some of the key compliance regulations:

1. General Data Protection Regulation (GDPR)

The General Data Protection Regulation (GDPR) is an EU data privacy regulation that protects personal data in the EU and EEA. It applies to any organization handling EU/EEA citizens’ data, regardless of location. Non-compliance can lead to severe fines and restrictions.

Its key requirements are:

• Lawful basis and consent: Organizations must have a valid legal reason to process personal data. Consent is one option, but other bases include contractual necessity, legal obligations, and legitimate interests.
• Data minimization and purpose limitation: Data must be necessary for its stated purpose and not processed beyond it.
• Individual rights: Users can access, correct, delete, or restrict their data, and must be notified of high-risk breaches.
• Data security: Strong security measures are required, including risk assessments and reporting breaches within 72 hours.
• Accountability: A Data Protection Officer (DPO) is required only for public authorities, large-scale monitoring, or sensitive data processing. Non-EU businesses handling EU data must appoint an EU representative.

For serious GDPR violations, fines can reach €20 million or 4% of global annual revenue. Notable fines include €50M for Google (2019), €225M for WhatsApp (2021), and €746M for Amazon (2021).

Since its adoption, GDPR has influenced global privacy laws like CCPA, pushing businesses toward greater transparency, security, and accountability.

2. California Consumer Privacy Act (CCPA)

The CCPA, enacted in 2018 and effective since January 1, 2020, grants California residents greater control over their personal data. It gives consumers the right to opt out of the sale of their personal information while allowing businesses to process data for other purposes unless restricted by law. The law primarily applies to larger businesses that meet specific revenue or data-processing thresholds.

The 2020 California Privacy Rights Act (CPRA) expanded CCPA, taking full effect in 2023. Since its enforcement, CCPA has reshaped data privacy in the U.S., influencing laws in Virginia, Colorado, and other states.

CCPA applies to for-profit businesses that collect personal data from California residents and meet at least one of the following:

• Annual revenue over $25 million.
• Buy or sell or process data of 100,000+ California residents or households per year.
• Derive at least 50% of revenue from selling personal data of California residents.

Under the CCPA, expanded by the CPRA, consumers have the right to know, access, and data portability, the right to correct, the right to delete their personal data, including data shared with third parties, and the right to non-discrimination. They have the right to opt out of data sales, while minors under 13-16 require opt-in consent and those under 13 need parental consent.  

Covered data applies to personal information, including identifiers (names, IPs), online activity, biometric data, and financial details. Penalties up to $2,500 per violation (unintentional) and $7,500 per violation (intentional) are levied. Consumers can sue for data breaches, with damages of $100–$750 per record. 

3. Health Insurance Portability and Accountability Act (HIPAA)

HIPAA, enacted in 1996, protects patient health information (PHI) from unauthorized access, fraud, and misuse. Enforced by the Office for Civil Rights (OCR) under HHS, it applies to healthcare providers, insurers, clearinghouses, and business associates handling PHI. HIPAA sets strict privacy, security, and breach notification rules.

Covered entities such as healthcare providers, health plans, and clearinghouses must comply with HIPAA. Business associates, including third parties like IT vendors and billing firms that manage PHI on behalf of covered entities, are also required to comply.

Non-compliance can result in penalties ranging from a minimum of $137 to $68,928 per violation, with a maximum annual fine of $2,067,813 and in severe cases, criminal charges.  

HIPAA remains a cornerstone of U.S. healthcare data protection, influencing laws like the HITECH Act and ensuring healthcare providers safeguard patient information against rising cyber threats.

Key HIPAA rules:

1. Privacy Rule (2003): Protects all PHI in electronic, paper, or oral form. Grants patients rights over their data, including access, amendments, and disclosure restrictions.
2. Security Rule (2005): Focuses on electronic PHI (e-PHI), requiring safeguards like encryption and firewalls.
3. Breach Notification Rule (2009):Mandates notification of affected individuals, HHS, and media (for breaches affecting 500+ individuals) without unreasonable delay but no later than 60 days. For breaches affecting fewer than 500 individuals, covered entities must notify affected individuals without unreasonable delay (no later than 60 days) and report the breach to HHS within 60 days of the end of the calendar year in which the breach occurred.
4. Enforcement Rule (2006): Defines investigation procedures and penalties, including audits and corrective action plans.

Excellus Health Plan was fined $5.1 million (2021) for a 2015 breach that exposed the PHI of 9 million customers. Fresenius Medical Care was fined $3.5 million (2018) for failing to implement proper security measures, leading to multiple breaches across its U.S. facilities.

4. ISO/IEC 27001 (Information Security Management System – ISMS)

ISO/IEC 27001 is an internationally recognized standard for establishing, implementing, maintaining, and improving an Information Security Management System (ISMS). Developed by ISO and IEC, it provides a structured approach to managing information security risks. ISO/IEC 27001 is not legally mandatory, but organizations adopt it to strengthen cybersecurity, reduce risks, and build trust.

Any organization, regardless of size, industry, or location, can implement and seek certification certify under ISO/IEC 27001, including:

• Tech, finance, and healthcare firms handling sensitive customer data.
• Cloud providers, IT firms, and consultants improving cybersecurity measures.

ISO/IEC 27001 certification strengthens security by enhancing risk management. It boosts credibility, builds trust with stakeholders, and improves efficiency by standardizing security policies.

ISO/IEC 27001 requires organizations to adopt a risk-based approach to information security. This approach involves conducting risk assessments to identify and evaluate threats, implementing risk treatment plans with security controls, and establishing company-wide security policies. Organizations must also enforce administrative, technical, and physical security measures, engage in continuous monitoring through audits, and prepare for incident response and business continuity. 

The certification process involves a gap analysis to assess current security practices, ISMS implementation to develop policies and controls, an internal audit to verify effectiveness, and an external audit by a third-party certification body. To maintain certification, organizations must ensure ongoing compliance with periodic audits and continuous improvements.

Although ISO/IEC 27001 does not impose fines, failure to comply can lead to reputational damage from security breaches, loss of business opportunities if clients require certification, and regulatory consequences if security lapses lead to GDPR, CCPA, or HIPAA violations.

Tech giants like Microsoft, Google, and AWS comply with ISO 27001 to ensure global security best practices. Many organizations also use it as a foundation for compliance with SOC 2, HIPAA, and GDPR. While not mandatory, ISO/IEC 27001 remains the gold standard for information security, helping businesses protect sensitive data, manage risks, and enhance security resilience.

5. Payment Card Industry Data Security Standard (PCI-DSS)

PCI-DSS is a security standard designed to protect cardholder data and ensure secure payment processing. Unlike government-enforced regulations like GDPR or HIPAA, PCI-DSS is a mandatory contractual obligation imposed by the Payment Card Industry Security Standards Council (PCI SSC) and enforced by acquiring banks and payment brands. The PCI SSC was established by Visa, Mastercard, American Express, Discover, and JCB.

PCI-DSS applies to any business that processes, stores, or transmits cardholder data, including retailers, e-commerce merchants, financial institutions, and third-party service providers. Even if a third-party payment provider is used, the merchant still has compliance obligations, but responsibility can be shared. Additionally, service providers themselves must also be PCI-DSS compliant.

Compliance helps reduce breaches and fraud, strengthens customer trust, and aligns with regulations like GDPR and CCPA. Adhering to PCI-DSS safeguards sensitive payment data, mitigates cyber threats, and ensures secure transactions.

Non-compliance can result in fines of $5,000 to $100,000 per month, higher transaction fees, or loss of payment processing rights. Businesses may also face liability for fraud losses, data breach costs, and reputational damage. 

Compliance is divided into four levels based on the number of transactions processed annually:

• Level 1: Over 6 million transactions – requires an annual on-site audit by a Qualified Security Assessor (QSA).
• Level 2: 1–6 million transactions – requires an annual Self-Assessment Questionnaire (SAQ).
• Level 3: 20,000–1 million transactions – requires an SAQ and quarterly vulnerability scans.
• Level 4: Less than 20,000 transactions – validation requirements vary by payment provider and acquiring bank policies.

PCI-DSS compliance is based on six core objectives, broken into 12 specific security requirements.

Organizations must validate PCI-DSS compliance through regular assessments and scans. Quarterly vulnerability scans are conducted by an Approved Scanning Vendor (ASV) to identify security weaknesses. Annual assessments vary by merchant level; Level 1 merchants must undergo on-site audits by a Qualified Security Assessor (QSA), while smaller merchants can fulfill compliance requirements by completing a Self-Assessment Questionnaire (SAQ).

How to ensure proper data and regulatory compliance

Organizations can strengthen data compliance and security by following these key steps:

1. Assess compliance standards and data inventory:

Identify relevant regulations based on industry and geography (e.g., GDPR, HIPAA, CCPA). Maintain a data inventory tracking what data is collected, where it’s stored, and who has access.

2. Implement immediate security measures:

Use authentication, role-based access, and encryption to limit data exposure. Deploy encrypted storage, firewalls, and access logs to protect data. Educate staff on regulations and best practices for data privacy.

3. Develop a long-term security plan:

Standardize procedures for responsible data management. Periodically assess compliance efforts and identify gaps with regular audits. Establish a breach response plan and protocols for detecting, reporting, and mitigating breaches.

By integrating these steps, organizations can meet compliance standards, enhance data security, and reduce risks of breaches and unauthorized access.

Automating compliance management with Scrut

Manual compliance management is inefficient and error-prone. Automating the process enhances security and simplifies compliance by:

• Real-time risk monitoring to detect and address threats proactively.
• Automated evidence collection for faster audits and streamlined reporting.
• Seamless integration with security tools to maintain continuous compliance.

Scrut automates compliance workflows, risk assessments, and audits, making it easier to meet standards like GDPR, HIPAA, ISO 27001, and more. Its platform ensures effortless compliance, reduced risks, and enhanced security—helping businesses stay audit-ready with minimal effort. Get in touch to learn more.