How Cybersecurity Compliance Affects You
Many businesses are legally required to meet cybersecurity compliance standards. Failing to meet these standards could lead to devastating consequences for your business, including hefty fines, legal penalties, or even forced closure. Not sure which compliance standards apply to your business? Read on to find out more about IT security compliance.
What Is Compliance in Cybersecurity?
Generally speaking, compliance in cybersecurity refers to a set of standards and regulatory requirements set by an authority. The specific agent that defines and enforces compliance depends on your industry, but compliance is usually mandatory.
Why Does It Matter?
Cybersecurity standards are binary. You either meet them or you don’t—and you really should meet them. There are severe penalties for non-compliance across industries, including hefty fines, criminal charges, and even business closure. If you care about your business’s success, you need to care about compliance.
The Different Types of Cybersecurity Compliance by Industry
Now that we understand why compliance matters, let’s review the specific cybersecurity compliance standards for various industries.
Healthcare Cybersecurity Compliance (HIPAA)
The U.S. Health Insurance Portability and Accountability Act (HIPAA) is the set of cybersecurity regulatory standards for the United States healthcare industry. HIPAA requires every business involved with protected health information (PHI) to enact adequate security measures that protect this sensitive data.
Not sure if your business deals with PHI? Protected health information is all individually identifiable health data held or transmitted by a covered entity or its business associate in any form, including electronic and paper data.
Here are some common examples:
- Patient Names
- Birth Dates and Healthcare Service Dates
- Telephone Numbers
- Geographic Data
- Fax Numbers
- Social Security Numbers
- Email Addresses
- Medical Record Numbers
- Medical Photographs
- Biological Identifiers
- Vehicle Identifiers
For more thorough information on HIPAA, check out this source by the U.S. Department of Health & Human Services.
What Happens If You Aren’t HIPAA Compliant?
There are serious consequences for failing to comply with HIPAA, both of the civil and criminal variety.
The Office for Civil Rights (OCR) oversees all civil punishments for HIPAA non-compliance. These punishments are imposed on a tiered basis, with the tier being determined by how the entity violated the law. The four tiers are as follows:
- Unknowing Violations
- Reasonable Cause Violations
- Corrected Willful Violations
- Uncorrected Willful Violations
After determining the tier a violation falls into, the penalty is determined by how many private health records were compromised. Here’s a table breaking down HIPAA violations and their minimum and maximum civil penalties:
|Violation / Penalty||Minimum Penalty||Maximum Penalty|
|Tier 1: Unknowing Violation||$127 per violation||$63,973 per violation|
|Tier 2: Reasonable Cause Violation||$1,280 per violation||$63,973 per violation|
|Tier 3: Corrected Willful Neglect Violation||$12,794 per violation||$63,973 per violation|
|Tier 4: Willful Neglect Violation||$63,973 per violation||$63,973 per violation|
All civil penalties have a calendar-year cap of $1,919,173.
Now that we understand the civil consequences of HIPAA violations, let’s review the criminal penalties. Remember that criminal penalties are imposed in conjunction with civil ones.
|Violation / Penalty||Maximum Criminal Penalty|
|Wrongful Disclosure of PHI (Tier One)||One Year in Prison|
|Wrongful Disclosure of PHI Under False Pretenses (Tier Two)||Five Years in Prison|
|Wrongful Disclosure of PHI Under False Pretenses With Malicious Intent (Tier Three)||Ten Years in Prison|
If you operate in the healthcare industry, HIPAA isn’t a choice. Stay compliant or risk facing the consequences described above.
Want To Stay HIPAA Compliant?
Failing to comply with HIPAA could lead to dire ramifications for your business. Don’t leave compliance up to chance—enlist the help of professional IT security compliance services.
Cybersecurity Compliance for the Finance Industry (GLBA)
The Gramm–Leach–Bliley Act (GLBA) is designed to protect consumers by making financial institutions explain their information-sharing practices and protect sensitive data. The GLBA was recently amended to consider auto dealerships as financial institutions, with dealers having until 6/9/2023 to comply.
The GLBA consists of three rules that define how financial institutions can handle clients’ private financial information.
Rule 1: The Financial Privacy Rule
The privacy rule also sets parameters for how data is collected, used, distributed, and most importantly, protected.
Rule 2: The Safeguard Rule
The safeguard rule defines how security should be approached. It mandates the implementation of proper cybersecurity protections across a variety of channels, some of which include:
- Administrative Channels
- Physical Channels
- Technical Channels
These protections are designed to defend private financial data. Additionally, the safeguard rule forces organizations to improve their cybersecurity by instituting an information security plan, testing their security measures, and more.
Rule 3: The Pretexting Rule
The pretexting rule restricts businesses from collecting data under false pretenses. This means that your organization cannot use deceptive strategies in order to obtain financial information.
The best way to comply with the pretexting rule is by running an ethical operation and training your employees on proper procedures.
What Happens If You Aren’t GLBA Compliant?
While states have a role in enforcing GLBA compliance, the Federal Trade Commission (FTC) is the primary authority. The FTC has the power to audit any organization at will to confirm that the GLBA is being followed. If they discover that the requirements aren’t being met, your business could face harsh civil and criminal penalties:
- Financial institutions can be fined up to $100,000 for each GLBA violation.
- Institution officers and directors can be fined up to $10,000.
- Involved actors can face up to five years of prison time.
Beyond direct penalties, GLBA non-compliance comes with an enormous amount of negative press and customer mistrust. Make sure consumers can trust you by staying GLBA compliant.
Make Every Type of Cybersecurity Compliance Easy
Instead of trying to memorize the list of security compliance regulations/standards for your industry, leave it to a professional. A managed security provider can guarantee that your business meets every compliance requirement.
Government Cybersecurity Compliance (FISMA)
The Federal Information Security Management Act (FISMA) requires federal agencies to implement comprehensive information security plans to protect sensitive data. FISMA standards are regulated by the National Institute of Standards and Technology (NIST), the chief FISMA governing authority.
FISMA compliance is complex, but to summarize, you must:
- Maintain an inventory of all systems and integrations in use
- Understand and meet your risk categorization level
- Create a “living” security plan
- Meet 20 specific security controls
- Perform a three-tiered risk assessment after every cybersecurity change
- Conduct yearly security reviews
Interested in learning more about FISMA? Check out this governmental resource.
What Happens If You Aren’t FISMA Compliant?
Failing to be FISMA compliant comes with serious consequences, including:
- A loss of federal funding
Is your business prepared to lose all of its federal funding? If not, then you need to take FISMA compliance seriously.
- Governmental hearings
If your FISMA non-compliance caused real damages, you might be forced to attend a government hearing where your liability is determined. If found liable, your business may be censured from all future government contracts.
In summary, failing to be FISMA compliant devastates your business and ruins future prospects of government work.
Simplify Cybersecurity Compliance
If you think cybersecurity compliance is hard to understand now, wait until next year. Industry standards are constantly changing to combat the latest cyberthreats. Even if you meet cybersecurity compliance today, who knows if you will later.
Simplify compliance by partnering with Virtual-Q. We track all IT security compliance changes and consistently reinforce our cybersecurity framework to stay prepared for any cyberattack. Contact us today to get started.
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