Data Inventory is Essential for GDPR and Privacy Compliance

Creating robust privacy protection programs is only possible when organizations understand their data well. Data inventories enable a business or organization to have a comprehensive understanding of the data they hold and how each piece of the data is being used and stored. For this reason, data inventories are critical to building a solid data protection program, which can lead to improved GDPR and the California Consumer Privacy Act (CCPA) compliance. 

What Is a Data Inventory?

A data inventory is a comprehensive list of data assets collected, processed, and stored within the organization. A data inventory includes updated information about data, its source, and additional metadata. Data inventories within an organization are directories used to manage data, especially sensitive data, and maintain compliance.

Moreover, sensitive data within an organization is not limited to just personal data. For instance, sensitive data can also include business data about vendors, processes, information about the contract between an attorney and their client, and intellectual property data. All of the above data is classified as sensitive data, and they have to be captured within your data inventory to be comprehensive. Data inventories can help businesses identify which data they need and can store. 

Besides, data management’s goal is to facilitate data-driven decisions and drive business value – so there is little incentive to collect any data that does not offer business value. A data inventory can help you assess whether you are collecting the right kind of data or need a particular type of data and whether or not the data is valuable and sufficient. 

Data Inventory and GDPR 

Privacy protection regulations such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) enforce strict guidelines. According to the new privacy laws, collecting and processing data without proper consent from users or legitimate business needs can get you into trouble. Therefore, businesses have to be careful about the data they are collecting and storing. Additionally, the regulations require businesses and organizations to clearly understand user data and how the data is being used and stored. Therefore, information governance and proper data inventory are critical aspects of the privacy protection regulations.

Furthermore, the regulations also require businesses to address data subject access and erasure requests (DSAR) within 90 days. Data inventory becomes essential to handle requests required by different privacy protection policies. 

A comprehensive data inventory process to address GDPR consists of the following:

  • Understand the definition of personal data as specified under GDPR.
  • Identify personal data within the organization.
  • Understand and classify (structured, unstructured, relational database) the data — is the data difficult to identify, export, or if the data is difficult to delete. 
  • Understand how personal data is used.
  • Know who has access to the data.
  • Know with whom the data is being shared. 
  • Know the duration of data retention. 
  • Find out where the data is stored, including third-party systems – data storage can happen on servers or in different geographical locations.
  • Track data movement as it travels across the organization – right from the moment of collection to usage and storing. 
  • Third parties, business partners, and vendors should be considered and vet options to improve compliance. 
  • How is the data being protected, and also who is responsible for data protection within the organization? 

6 Ways to Improve Privacy Policy Compliance with Data Inventories

Proper data inventory is fundamental to GDPR compliance. Here are six ways data inventories can improve GDPR compliance;

  • Effectively manage data sharing and permissions – determine which third parties have access and to what extent or capacity. 
  • Address individual rights requests (data subject access requests – DSAR). 
  • Carry out risk assessments, including Data Protection Impact Assessments (DPIA), to determine the necessary controls effectively. 
  • Manage data protection practices and programs. 
  • Develop effective breach notifications and provide actionable information to all those impacted by the breach. 
  • Help Data Protection Officers (DPO) and other staff within the organization to effectively execute their duties and responsibilities. 

To Wrap Up

Ensuring GDPR and privacy laws compliance can be extremely challenging unless a business clearly understands the type of data they collect and how it is used and stored. To be GDPR and other privacy laws compliant, businesses and organizations should rely on data inventory to optimize their data management processes. Data privacy protection will only grow in prominence as many states and countries introduce new laws and regulations. Moreover, data inventory can also help businesses ensure the quality of their data and ensure organization-wide data management best practices.

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Amar Kanagaraj

Amar Kanagaraj

Amar Kanagaraj is the founder and CEO of Protecto, a tech company with a mission to dramatically (10-100x) improve how organizations protect data and defend data privacy. Organizations have piled data over the years. Unfortunately, growing cyber-attacks and privacy regulations make these data piles into landmines. Protecto uses AI and privacy engineering to tackle the complexity. It locates the top 1% of the data and activities that could cause severe data privacy and security problems.

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