Identity Governance and Administration Compliance Risks
What Is compliance risk?Compliance risk is the potential for legal penalties, financial loss, or material loss arising from failure to follow industry standards, regulatory requirements, and internal policies to create best practices. Many organizations find that their digital transformation strategies increase compliance risk because the interconnected infrastructures and applications obfuscate users’ data access.
Why Do Companies Worry About Compliance Risks?Modern businesses need to balance a variety of compliance initiatives. Legislative bodies and industry standards organizations increasingly attempt to use the hammer of compliance to drive best practices. Understanding the concerns arising from compliance risk better enables you to prioritize your data security and privacy initiatives. Fines and Penalties Although people normally associate fines and penalties with laws, some industry standards incorporate fines. Additionally, some regulatory agencies levy penalties for noncompliance with industry standards. For example, the Payment Card Industry Data Security Standard (PCI DSS) fines for noncompliance range from $5,000 to $100,000 a month depending on the number of payments your company accepts and the willfulness of the noncompliance. The larger the company and the more willful the compliance violation, the more money your organization will be fined. Loss of Reputation While a data breach may not make above-the-fold or before-the-scroll headlines, heavy fines arising from poor data privacy and security controls will. Even without significant fines, many agencies need to publicly report organizations who violated regulatory requirements. According to the Salesforce’s 3rd State of the Connected Customer report:
- 84% of customers are more loyal to companies with strong security controls.
- 73% of customers say trust in companies matters more than it did a year ago.
- 65% have stopped buying from companies that did something they consider distrustful.