6 business benefits of data protection and GDPR compliance

Complying with the General Data Protection Regulation is not just about appeasing regulators and avoiding fines. GDPR compliance also offers a range of business benefits in areas such as data protection, security and beyond.

The GDPR, which came into effect in 2018, is a regulation introduced by the European Union to protect data security and privacy. It requires businesses that manage personally identifiable information (PII) to take specific measures to protect and secure that data. Although the GDPR is an EU regulation, it states that any business that stores data about EU citizens or makes its services available to them must comply with the GDPR. So, GDPR compliance impacts organizations around the world, not just those based in the EU.

Consequences of GDPR non-compliance

There was some doubt in the years immediately following the GDPR’s introduction about whether its requirements were specific enough to drive strong enforcement. Some observers have also wondered whether the GDPR will be inconsistently enforced as its enforcement model relies on individual countries within the EU, not a central enforcement agency, to monitor for compliance and fines. Factors like these have given businesses reason to believe that failure to comply with the GDPR may not lead to serious consequences.

This is no longer a credible position. To date, regulators have issued a number of large fines for non-compliance with GDPR. Some of the most notable cases include the following:

Meta was fined 1.2 billion euros ($1.3 billion) in 2023 after GDPR regulators concluded the company transferred PII across borders without adequate data protection. This fine was on top of earlier fines levied against Meta, which totaled hundreds of millions of euros. Amazon was fined 746 million euros ($805 million) in 2021 for non-compliance with GDPR related to the use of targeted advertising without consumer consent. TikTok was fined 345 million euros ($372 million) in 2023 in response to violations of the GDPR’s data processing and transparency requirements. Google was fined several times by GDPR regulators between 2019 and 2022, mainly due to findings that the company lacked sufficient consent and transparency in ad personalization products.

These fines are just a few of the GDPR non-compliance fines involving big name companies. According to the GDPR Enforcement Tracker, regulators have so far issued more than 2,200 fines for non-compliance with GDPR, including many against private individuals or smaller businesses. There is reason to expect that fines for non-compliance will increase in the coming years due to new rules designed to improve GDPR enforcement in cases that cross national borders.

Data protection’s role in complying with the GDPR

Reasons vary for companies not complying with the GDPR. However, the single most common type of breach involves Article 5 of the GDPR, which governs how businesses process and store personal data. To comply with Article 5, companies must protect data “against unauthorized or unlawful processing and against accidental loss, destruction or damage” while ensuring that they do not retain PII for longer than necessary.

Data protection plays such a critical role in GDPR compliance due to Article 5. The primary purpose of data protection is to reduce the risk of inadvertent data alteration or deletion. Implementing data protection measures helps businesses meet this core GDPR requirement.

In addition, GDPR mandates should inform how companies approach data protection to the extent that storing PII in data backups longer than necessary could potentially cause a breach of Article 5. To remain compliant, businesses must ensure that they take steps to avoid non-anonymous inclusion of personal data in backups and can justify why they store backup data that may contain PII.

Benefits of GDPR Compliance

The key role data protection plays in achieving GDPR compliance helps explain why the benefits of compliance go beyond just avoiding fines. Companies that comply with the GDPR are likely to achieve several benefits.

1. Improved business continuity

Data protection technologies and procedures help companies ensure compliance with GDPR Article 5, which requires businesses to reduce the risk of accidental loss of PII. But data protection also improves overall business continuity by increasing the chances that organizations can recover critical systems and restore operations quickly after a data breach.

2. Higher data ROI

In a similar way, data protected as part of a GDPR compliance strategy is prepared to deliver a higher return on investment to the business. Companies hurt themselves financially when they invest heavily in acquiring, processing and storing data only to lose that data permanently because they failed to invest in data protection measures, including backup and recovery. Protecting data will continue to drive ROI even if that data is lost or damaged as long as it is recoverable.

3. Stronger data management

Data governance, which focuses on managing data availability, usability, security and integrity, helps businesses comply with regulations such as the GDPR. Businesses that comply with GDPR are likely to have a clear data governance strategy in place, along with controls to enforce that strategy. Companies, in turn, benefit due to their ability to find, process, protect and secure data in an efficient and scalable way – not just for the sake of GDPR compliance, but to maximize data resources in general and monetize.

4. Easy data migration

GDPR compliance goes hand in hand with the ability to easily move data between systems. When businesses consistently protect their data as part of a GDPR compliance strategy, they implement data backup and recovery methods that can be used to migrate data from one platform to another. For example, moving a database currently hosted on-premises to the cloud benefits from a reliable snapshot of that database using the tools deployed for data protection.

5. Increased data traceability and transparency

Determining where PII exists in order to adequately protect it is an important step towards GDPR compliance. Traceability and transparency capabilities better position an organization to track, manage and secure all the data governed by the GDPR. In addition, the ability to find and access other data assets can further maximize the monetization of data.

6. Reputation for data stewardship

Companies that comply with the GDPR demonstrate to regulators, customers and partners that they take data protection seriously and are responsible managers of data. GDPR compliance can also increase brand trustworthiness and provide an edge over competitors who may be perceived by customers as less reliable protectors of personal data.

Emerging GDPR Compliance Challenges

While there are many clear benefits to investing in VIP compliance strategies, procedures and technology, be aware that VIP compliance is becoming more challenging, thus forcing businesses to change their compliance techniques.

One emerging challenge is the impact of generative AI technology on GDPR compliance. Since the GDPR was written and enacted long before generative AI became mainstream, it remains unclear how regulators might interpret data processing and protection practices within the context of generative AI tools and technologies.

As a result, vendors such as Microsoft have chosen to integrate generative AI into broader platforms to “provide leverage around the models,” writes IDC research manager Alison Close in her report on the potential of generative AI in customer service. “Choosing OpenAI within Microsoft Azure,” she added, as opposed to deploying OpenAI services on their own without compliance rails in place, “is to ensure data privacy and GDPR compliance.”

Tracking PII across multiple environments is also a key challenge as more and more businesses adopt multiple clouds or IT platforms. In fact, it was the biggest GDPR compliance challenge in Europe as of 2022, according to IDC research manager Ralf Helkenberg. “Data visibility is essential to building privacy compliance,” he wrote in his report on GDPR compliance challenges in Europe, “but keeping track of personal data across different business environments is proving difficult.” Meeting this challenge, he reported, will require more extensive use of automated data discovery and classification tools.

Chris Tozzi is an adjunct research advisor at IDC as well as an advisor to Fixate IO and a professor of IT and society at a polytechnic university in upstate New York.