IT Compliance: Definition, Standards, and Risks

The IT compliance landscape is changing as governments address rising data security risks. As a result, organizations must stay on top of their risk management and security procedures to ensure compliance with new laws and requirements. Aside from these general regulations, organizations operating in more tightly regulated industries need to be aware of additional compliance requirements. 

Regulations are tightening, while data security is becoming more challenging and complicated. Fortunately, solutions, such as automated monitoring, are available to help organizations comply without overburdening IT professionals. This helps mitigate risks while keeping IT teams efficient and costs relatively low. 

What is IT compliance?

IT compliance refers to observing legal and practical rules or standards designed to keep data and sensitive information secure. Because data is shared throughout organizations, all departments must practice compliance and implement a cohesive strategy to meet IT compliance requirements.

There are a few important components of IT compliance that organizations should consider: 

• IT governance: The purpose of IT governance is to align the capabilities of the IT team with the organization’s security needs and strategic goals. As this relates to compliance, the IT team must balance regulatory requirements with the organization’s strategy and the resources available to accomplish that. 
• 1. Risk management: Understanding risk assessment and mitigation strategies is essential for IT teams. Regulations require companies to protect consumer data, so organizations need to identify and appropriately prioritize vulnerabilities to comply. Organizations should also create disaster recovery plans to minimize the amount of data at risk if a security incident occurs. 
  2. Regulatory standards: IT teams need to be aware of major regulatory frameworks, such as HIPAA and SOC2, and the more general legal requirements established by the GDPR in Europe and the CCPA in California, for example. HIPAA applies to medical providers handling sensitive patient information, and SOC2 typically applies to service providers that contact private consumer information.

• IT security compliance: IT teams need to ensure that employees follow internal compliance regulations. Many security incidents are caused by human error, so managing access and establishing a zero-trust environment are two important steps to ensure compliance with protocols. 

IT compliance vs IT security

IT compliance ensures that your IT systems meet specific legal, regulatory, and industry regulatory standards. On the other hand, IT security is about protecting your organization’s data and systems from unauthorized access and other types of cyber attacks. While IT compliance aims to meet external requirements, IT security encompasses a broader scope and focuses on proactive mitigation of potential risks.

Understanding IT compliance standards

Compliance standards vary across states and countries, but most have some common requirements. To keep consumers in control of their own data, the regulations generally require companies to provide or delete data at the consumer’s request.

Europe’s GDPR standards are a bit tighter than most regulations in the United States; the primary difference is how consent is handled. The GDPR requires companies to obtain affirmative consent from consumers before collecting and accessing data. The CCPA, for example, only requires companies to provide consumers the option to opt out of data collection.

There are also frameworks that guide organizations outside of legal requirements. For example, the International Organization for Standardization (ISO) and the National Institute of Standards and Technology (NIST) are guidelines for best practices. While IT professionals are not obliged to follow them, they are helpful for creating policies that encourage and support a secure, compliant environment. 

Types of IT compliance standards

1. HIPAA (Health Insurance Portability and Accountability Act)

HIPAA establishes standards for protecting sensitive patient health information, such as medical histories. This standard typically applies to healthcare organizations such as hospitals, health insurance providers, and any other business that handles patient information. HIPAA compliance reduces the risk of data breaches and ensures that patients’ data remains confidential and secure.

2. GDPR (General Data Protection Regulation)

GDPR is a European regulation designed to protect the personal data and privacy of individuals within the European Union (EU) and European Economic Area (EEA). It also governs the export of personal data outside these areas. Any organization that processes or stores the personal data of EU citizens, even if the organization itself is based outside of the EU. To comply, organizations need clear policies on data collection, access, storage, and sharing, as well as transparent user consent mechanisms and incident response plans.

3. The Personal Information Protection and Electronic Documents Act (PIPEDA)

The PIPEDA is a Canadian compliance standard that governs how private organizations collect, use, and share personal information, similar to the EU’s GDPR. It applies to Canadian businesses across industries and global organizations that handle any personal data of Canadians.

4. PCI DSS (Payment Card Industry Data Security Standard)

PCI DSS ensures that any organization handling payment card information ensures secure payment transactions and the protection of sensitive financial information. This applies to businesses involved in processing, storing, or transmitting payment card data, from financial institutions to e-commerce vendors. Non-compliance could lead to fines and even potential revocation of payment processing capabilities.

5. Sarbanes-Oxley Act (SOX)

SOX is a US federal law that aims to increase transparency in corporate financial reporting and prevent fraud. While it primarily targets publicly traded companies, SOX has significant implications for IT departments, especially regarding data accuracy and integrity. SOX compliance is a legal requirement for businesses under its scope.

6. ISO 27001 (International Organization for Standardization – Information Security Management)

ISO compliance outlines best practices for establishing, implementing, maintaining, and continually improving an information security management system. Any organization that wants to improve or confirm its information security processes can should learn how to become ISO certified. An ISO 27001 certification signifies robust security protocols, which can act as a strong indicator of reliability for businesses that want to stand out in competitive markets.

7. SOC 2 (System and Organization Controls 2)

SOC 2 is an IT compliance standard that applies service providers who manage customer data. such as SaaS providers, data centers, and managed service providers (MSPs). This compliance standard assesses how an organization’s IT infrastructure meets the standard’s five core principles: security, availability, processing integrity, confidentiality, and privacy. SOC 2 compliance boosts a business’s credibility and may be required to meet some vendor requirements.

8. Network & Information Security Directive (NIS2)

The NIS2 Directive is a cybersecurity compliance standard. It focuses on ensuring resiliency and business continuity for essential sectors such as energy, transport, banking, healthcare, and digital infrastructure in the EU. Designed to enhance the existing Network and Information Systems Directive, NIS2 requires IT security measures such as remote monitoring, access control, and regular compliance audits to protect critical infrastructure and sensitive information.

9. Gramm–Leach–Bliley Act (GLBA)

The GLBA focuses on financial institutions and mandates the secure handling of customers’ private financial data. Enacted in 1999, this law safeguards consumer privacy while promoting accountability. IT professionals in the financial sector need to meet the GLBA’s core requirements, which IT must enable and enforce effectively. These include implementing data security tools, preventing unauthorized access to customer data, and practices to prevent data breaches due to cyberattacks.

Risks associated with IT compliance

Noncompliant organizations risk security breaches, data corruption and theft, high recovery costs and fines, and reputational damage. Many companies are shifting from traditional, locally-based hardware infrastructures to cloud or hybrid infrastructures, which adds complexity to the security environment and increases potential vulnerabilities. This makes compliance more difficult to achieve, further increasing risk.

Security incidents have long been painfully expensive for companies, but failure to comply with recent regulations opens them up to incurring fines on top of any recovery costs. 

Some organizations also need to consider things like HIPAA and SOC2 compliance, which are specific regulations and standards designed to provide additional consumer protections.  Medical practices, for example, must carefully follow HIPAA regulations to ensure that no privileged information falls into the wrong hands.

A data breach can result in severe consequences, including patient identity theft. Compliance violators could spend up to a year in prison and receive fines up to $50,000.

Consumers often require SOC2 compliance to ensure data privacy. While it is not a legal requirement and thus does not risk fines or prison time, keeping customers’ data secure is essential for business continuity and ongoing success. A company that allows customer data to be exposed or stolen risks reputational damage, customer and revenue loss, and expensive downtime. 

Benefits of IT compliance

For IT professionals, IT compliance isn’t just about adhering to regulatory requirements; it also offers organizations many advantages.

1. Protecting sensitive data and systems

Meeting compliance requirements ensures that sensitive data is stored, processed, and accessed securely. Remaining compliant with industry standards reduces the chances of costly data breaches and cybercriminals gaining unauthorized access.

2. Ensuring a strong security posture

Many compliance requirements overlap with security best practices. Meeting IT compliance standards often means that an IT team utilizes robust security tools, such as full disk encryption, remote monitoring, or role-based access control, which further strengthens an organization’s overall cybersecurity posture.

3. Improving and streamlining IT processes

Compliance audits and routine compliance management give IT teams and organizational decision-makers more insight into making more informed decisions about improving IT operations. IT compliance enables IT teams to establish clear processes for data handling, device security, and system oversight, which ultimately boosts efficiency.

4. Building a trustworthy reputation

Organizations that prioritize compliance can receive official certifications from regulatory bodies, adding legitimacy to a security-first reputation. Customers, stakeholders, and regulators tend to view compliant organizations as more reliable and responsible, giving them an edge over the competition.

5. Preventing financial penalties

Failure to comply with regulations can result in penalties, typically in the form of fines. For example, non-compliance with PCI DSS in payment processing could lead to penalties costing thousands in fines.

Best practices in IT compliance

Compliance may seem daunting, but as regulations become more strict, it’s essential for continued operation. Here are some best practices organizations should follow to begin improving their security posture:

• Establish an IT compliance management system: This compliance management system should contain all of an organization’s policies and documentation pertaining to compliance. Regular penetration testing, continuous monitoring, and frequent checking for new standards are all important parts of managing compliance. 

• Continuous monitoring and improvement: Monitoring programs are an important part of the compliance management system, and automated monitoring solutions are ideal for maximum visibility into user activity and data access. The resulting visibility and documentation will be invaluable if the organization ever be audited. Once IT teams have brought the organization into compliance, there should be continued fine-tuning.

• Compliance training and awareness: The importance of training staff on compliance procedures cannot be overstated. The majority of data breaches are caused by human error, often employee negligence. Training is essential to decrease the risk of social engineering, phishing, and compromised credential attacks.

IT compliance checklist

Aside from the best practices we listed earlier, here’s a helpful checklist you can use to maintain IT compliance within any organization:

• Identify applicable regulations

Pin down the regulations relevant to your organization, such as GDPR, HIPAA, or PCI DSS. This depends on factors such as your industry, location, and the types of data you manage. Keep track of any changes or updates from regulatory bodies on these standards.

• Conduct a gap analysis

Compare your current IT processes and systems against the regulatory standards you need to meet to identify areas of improvement.

• Implement access controls

Use access control tools, from multi-factor authentication to full disk encryption, to prevent data breaches and unauthorized access to sensitive data.

• Create IT security plans

Establish clear policies for data handling, device management, and user access and make sure employees understand their role in maintaining compliance. Also, create incident response plans to ensure business continuity and minimize downtime.

• Ensure data resiliency

Safeguard sensitive data from ransomware and other cyber attacks by utilizing backup software. The best backup software ensures redundancy and rapid data restoration following a disaster or attack

• Automate IT operations

Use IT automation tools to reduce the chance of human error and to improve efficiency with IT processes. For example, IT teams can automate detecting and patching vulnerabilities with patch management software.

The importance of IT compliance

Compliance has a role in data protection, regulatory adherence, and risk management. By attending to regulatory requirements, organizations naturally improve their security posture, enabling them to protect themselves and their data from attack. This affects more than just the IT team. When the organization meets compliance requirements, it decreases its risk of incurring fines and losing customers and revenue.

Prioritizing IT compliance increases the likelihood of long-term success. While it may be tempting for leaders to ignore compliance and prioritize other issues, a single security incident could cost millions of dollars, plus the fines for failing to comply with regulations or legal fees from lawsuits brought by customers. Consider utilizing IT security software like NinjaOne to reduce the risk of attacks and data breaches.

NinjaOne’s IT security solution consolidates the tools IT teams need to strengthen their security posture and comply with regulatory standards. Features like encryption, automated patch management, and backup software can be viewed and managed from a single dashboard. This saves administrators time spent switching between tools, streamlining operations. See how you can boost IT efficiency with NinjaOne’s comprehensive suite of It management tools. Sign up to try NinjaOne for free for 14 days.