Small and midsize businesses face a unique set of challenges when addressing compliance with the EU’s General Data Protection Regulation.
In many ways they’re under more pressure than larger firms because resources are usually limited, making penalties for noncompliance potentially disastrous. Allocating enough money to overhaul content procedures can limit opportunities for short term growth.
In fact, a recent survey of midsize European businesses revealed that a quarter of businesses completing their GDPR checklists are “cutting back in other areas including plans to create innovative new products or to fuel growth through international expansion.”
Apart from updating current data handling procedures, the GDPR also instructs some companies to invest in a data protection officer and team to manage any ongoing issues the law will raise.
From data requests and employee training to continuous monitoring and breach reporting protocols, it’s a lot to implement without putting some sort of strain on revenues, production or both. As awareness of personal data rights grows, consumers may choose to only do business with companies that actively protect them. The GDPR is meant to empower the public, put data back into the hands of their owners, and provide peace of mind. If a company is unable to explain how it will cope with the GDPR or hasn’t implemented a clear plan, customers may switch to the competition.
Churn is something all businesses experience, but it’s especially detrimental to smaller organizations that rely on word-of-mouth referrals and customer testimonials.
The GDPR is about empowering individuals with more control of their data, which will turn the need to instill brand trust from a marketing message into an essential part of business success. Presumably regulators will work with SMEs who prove they’ve been proactive in their approach to data security and to fulfilling GDPR requirements. However, organizations that fail to comply may face penalties up to 4 percent of annual revenues, regardless of size.
The Silver Lining
The GDPR will force some organizations to make changes in one way or another, but there are some good reasons to welcome that. In fact, the regulation should offer long term benefits to all companies that comply.
Aside from improving overall data security, businesses that rid their repositories of redundant, obsolete or trivial (ROT) content can use the relevant data that’s left to improve communication with leads and existing customers, improving ROI. Cleaning repositories will also help SMBs reduce data storage costs.
There is another upside to GDPR. It’s an opportunity to set your business apart. Complying (or pursuing compliance) will obviously make companies less vulnerable to cyber threats, but what about reputation? Reputations take years to build and only moments to destroy. Consider how recent data breaches (such as Uber and Facebook) have influenced public opinion.
Businesses that take GDPR seriously are putting customers first and the success of a SMB is largely affected by brand confidence. People have an overwhelming variety of options when it comes to where they spend their money, so whether a SME flourishes, let alone stays in business, depends heavily on customer satisfaction.
SMEs should use compliance as a tool to rise above the competition.
Not only does regulatory compliance help businesses retain users, it also promotes company innovation, driving up demand. Modernised infrastructure, improved data storage and better organisational systems can reveal useful data patterns, helping businesses discover new trends.
This makes it easier for companies to launch new products. GDPR provides an opportunity to overhaul obsolete systems, making them more efficient and driving long term growth.
Source: Cyber Security Intelligence