In the realm of data management, two terms often surface as critical yet frequently confused: data governance and data compliance. While they may seem similar, each plays a distinct role in how data is handled, protected, and utilized within an organization.
Understanding these differences is not just a matter of semantics — it's essential for any business that wants to leverage data effectively while staying on the right side of regulations. In this blog, we’ll define data governance and compliance and take a look at the key differences between them.
Data governance refers to the overall management framework that defines who can take action, with what data, under what circumstances, and using what methods. It is a comprehensive approach that ensures data is consistent, trustworthy, and doesn't get misused.
Foundational governance:
Structural governance:
Quality governance:
Data governance provides the strategic oversight and policy framework that guides these activities, ensuring data is managed consistently and in compliance with organizational standards and regulations. For more info on data governance, check out our f#ull guide to the 6 building blocks of data governance.
Data compliance deals specifically with adhering to laws and regulations governing data protection and privacy. This legal framework ensures that an organization's data handling practices conform to statutory requirements, typically designed to protect individual privacy and prevent data breaches.
Crucial elements of data compliance include:
Data compliance is a critical subset of data governance aimed specifically at legal conformity.
Effective data governance can simplify compliance efforts. A robust governance framework provides the necessary infrastructure and clarity for managing data, which can help meet compliance requirements more easily. Conversely, the demands of data compliance can influence and shape an organization's data governance policies to ensure they are robust enough to meet legal standards.
Understanding the distinctions between data governance and data compliance can clarify their roles within an organization:
For marketers, the precision of campaign targeting and personalization hinges significantly on data governance. Ensuring that your data is well-organized and maintained leads to clearer insights and more effective strategies.
Here are just a few of the benefits marketers stand to gain from well-executed data governance.
For more info check out our blog on the key benefits of data governance.
In marketing, poor data governance can lead to a chain reaction of setbacks. If data isn't properly managed, every subsequent decision based on that data could lead your strategies astray.
In marketing, where personal data is gold, compliance isn't just legal; it's a strategic asset. Understanding and adhering to data compliance ensures that your marketing strategies respect privacy laws and build trust with your audience.
Some of the benefits marketers can get from a good compliance strategy include:
Data compliance missteps in marketing can be costly, not just in terms of fines but also in the erosion of customer trust and brand integrity.
Equifax’s data breach involved the exposure of sensitive personal information, including Social Security numbers, birth dates, addresses, and in some cases, driver’s license numbers of approximately 147 million individuals. The breach was caused by a vulnerability in a web application framework that Equifax used, which had a known security flaw that Equifax failed to patch in a timely manner.
Equifax’s failure was rooted in inadequate data governance and compliance practices. Despite having knowledge of the vulnerability, Equifax did not act promptly to apply a security patch. This lapse in security measures and failure to respond to known risks reflects poorly on the company’s adherence to best practices for data protection and regulatory requirements. The breach highlighted Equifax’s shortcomings in maintaining effective data security protocols and risk management practices.
Consequences:
The $700 million settlement included provisions for consumer compensation, credit monitoring services, and other penalties. This case exemplifies how lapses in data governance and compliance can lead to severe financial and reputational damage.
The British Airways breach exposed personal and financial details of around 500,000 customers. Attackers used a malicious script to collect information entered on the airline’s website, including credit card details and personal data. This breach was the result of poor security measures that allowed unauthorized access to customer information.
British Airways failed to implement adequate security measures to protect customer data, which directly contravened the GDPR requirements for data protection and privacy. The inadequacy in their data governance policies, such as insufficient encryption and lack of effective access controls, led to the breach. The ICO’s fine was a direct result of these compliance failures, reflecting the serious impact of not adhering to stringent data protection regulations.
Consequences:
The £183 million fine served as a stark warning about the importance of adhering to GDPR standards. The breach affected British Airways' reputation, leading to a loss of customer trust and significant operational impacts.
Both data governance and data compliance are crucial for managing data effectively in today's digital world. While they serve different purposes, they are interdependent. Good data governance facilitates compliance, and stringent compliance requirements can enhance governance frameworks.
Organizations must understand both to ensure not only that they are protecting themselves from regulatory penalties but also that they are making the most of their data in a secure, organized, and strategic manner. Understanding and implementing both aspects effectively is vital for any organization that wants to use its data as a strategic asset while minimizing risk.