What Is Data Compliance?

Data compliance is a set of processes that ensure companies manage data in line with legal, regulatory, and organizational standards. This applies across a range of data behaviors, including how data is collected, stored, processed, and shared. 

Indeed, with the prevalence of cross-border operations and cloud platforms, there is greater focus on how companies safeguard this information in more complex international situations. While many companies focus on establishing alignment with local regulations, Ascot’s network of experts across the globe supports compliance on an international scale.

We’ve put together this article as a structured overview of exactly what this type of compliance is and what it entails. With careful application, founders and organization owners engaging with global operations will have the knowledge to influence their success, supported by strong data frameworks.

Understanding Data Compliance

So, what is data compliance? Put simply, it means aligning with local and international legal compliance standards for the correct handling of sensitive personal and company information. Legally, this involves adherence to laws on data protection. Operationally, it establishes that data obligations are integrated into day-to-day activities.

Unlike data security or information technology (IT) risk management, compliance fulfils legal obligations, rather than simply protecting the organization from breaches. Non-compliance can certainly lead to significant consequences, including investigations and fines from regulatory bodies, shutdown operations, and reputational damage among consumers and other stakeholders.

Why Data Compliance Matters for Global Businesses

Managing customer, employee, and partner data across multiple jurisdictions brings significant risks. Cross-border systems present additional vulnerabilities, with missteps resulting in severe penalties and lost business opportunities. Beyond avoiding regulatory fines, mitigating such risks supports trust-building with clients and vendors alike. This boosts retention, the long-term validity of contracts, and smooth cross-border operations.

Certain industries are under a particularly high level of data management scrutiny. Businesses in finance, healthcare, and e-commerce sectors handle particularly sensitive information, making close adherence to global frameworks and perhaps choosing compliance service provider firms vital.

Key Areas of Data Compliance

• Data privacy legislation – Adhering to the increasing number of data privacy laws is essential. These depend on the jurisdiction, such as the General Data Protection Regulation (GDPR) in the E.U., the California Consumer Privacy Act (CCPA), or Lei Geral de Proteção de Dados (LGPD) in Brazil.
• Data sovereignty – When an organization stores or creates data within the borders of a specific country or region, there will be certain obligations it will need to attend to. This can be particularly challenging for companies storing data on cloud platforms or across multinational infrastructures, as data sovereignty may not necessarily be tied to the country the organization is operating in.
• Cross-border transfer protocols – Moving data internationally poses compliance challenges. The data may not only be subjected to different handling laws on the jurisdiction it’s being moved to, but some jurisdictions also require safeguards to be in place to ensure protection during transfer processes. Experienced international legal and compliance service providers can offer insights here.
• Consent and transparency practices – Gaining consent for and providing clarity on how data is handled maintains trust alongside complying with regulations. Solid frameworks for how businesses obtain informed permission, alongside documenting this streamlines reviews and audits.

Data Governance and Compliance

Data governance and compliance is a joint framework, working together to manage data both legally and responsibly. Governance policies act as internal rules and structures that manage who can access what types of data and under which circumstances they can use it. Compliance measures ensure that these policies also meet or exceed the external legal requirements.

There are various data governance policies that help mitigate risks and support ongoing compliance. Role-based access controls ensure there are standardized restrictions on data use for staff with specific seniority, and usage needs. Audit logging creates clear records that aid transparency and accountability. Additionally, data lifecycle management policies provide strict frameworks on how and when data is created, used, stored, and destroyed.

Data Compliance Standards to Know

Data regulations are evolving regularly. However, there are some consistent compliance frameworks it’s vital to know about. These include the following.

ISO/IEC 27001

This is the globally recognized framework for building, maintaining, and improving information security management systems (ISMS) to mitigate risks. The most direct way of adopting and demonstrating this standard is to seek certification from an external accredited body that regularly audits the company’s ISO/IEC 27001 practices and provides feedback on areas for improvement.

National Institute of Standards and Technology (NIST) privacy framework

The NIST privacy framework is a flexible but robust guide to ensuring companies incorporate the most relevant privacy protections into their operations. Adoption of this framework usually involves mapping the core framework functions—identify, govern, control, communicate, and protect— to each workflow that handles any form of data. This isn’t a certified protocol, but documenting adherence to NIST principles helps standardize data protection in day-to-day activities.

Health Insurance Portability and Accountability Act (HIPAA

In the U.S. healthcare sector, HIPAA is a mandatory regulation all businesses handling protected health information (PHI) must adhere to. Adopting these standards involves safeguarding across physical and digital domains alike, encrypting health data and ensuring secure transmission protocols, among other measures.

Payment Card Industry Data Security Standard (PCI-DSS)

The PCI-DSS is a global security framework that governs how credit card data and other payment information is handled by organizations. While it’s not strictly a form of legislation, key banking and card providers mandate that data handlers have compliant protocols in place. The standards include adopting sufficient firewalls, encryption processes, and frequent vulnerability testing, among other steps. Demonstrating compliance usually involves arranging audits by Qualified Security Assessors (QSAs) and annual reports to payment processors.

Steps to Build a Data Compliance Program

Programs should be tailored to a company’s needs, but the general steps are:

• Data audit – Companies should conduct thorough audits to map where each type of data comes from and how it flows through systems toward its storage point.
• Obligation identification – With visibility of the data flow, businesses can identify which legal obligations apply, depending on geography, industry, and operational processes.
• Policy building – Organizations should develop clear policies that cover aspects such as data access, retention, and deletion. These policies need to be transparent, actionable, and adaptable to changes.
• Training and updating – All employees must be trained on compliant behavior with regular refreshers provided. Companies should also review and update data management processes regularly for long-term resilience.

Tools and Technologies That Support Data Compliance

Alongside program policies, there are technologies that support compliance through automation and monitoring. Data Loss Prevention (DLP) tools can be integrated into systems to help detect and mitigate unauthorized data transfers. Adopting encryption and tokenization tech helps to protect data, whether it’s in transit or at rest. As a result, even successful breaches tend to be less disruptive.

Additionally, organizations can use consent management platforms to centralize and monitor user permissions. This can complement audit logging and alert systems that provide enhanced visibility on how data is used and modified, alongside real-time warnings of suspicious activity. 

Common Data Compliance Challenges

Staying data compliant comes with a variety of challenges—chief among these is the need to keep up with frequently evolving regulations across the globe. Another key issue businesses face is shadow IT (unofficial or unsanctioned software tools) and uncontrolled data copies that both raise the risk of data flows extending outside the company’s compliance protocols. 

It’s also vital to recognize that the business imperative to stay agile and adopt more efficient cloud migration practices rapidly can also add strain to data protection. It’s important to balance flexible operations with strong security. Additionally, while third-party vendors are essential in many industries, there is a need to ensure these partners’ actions align with internal and industry compliance expectations.

Global vs. Local Data Compliance Obligations

Global and local data regulations can differ, but this doesn’t mean companies can choose between them. Rather, operations should include both centralized governance models that are based on international frameworks and localized adaptations that are customized to specific jurisdictions’ requirements. It’s a difficult balance to achieve, particularly when practical unified cloud systems don’t necessarily meet regional compliance mandates. Nevertheless, navigating this tension between efficiency and legal obligations is a strategic challenge of data management that companies must commit to.

FAQs

What is data compliance?

It means that all personal, sensitive, or regulated data is handled by organizations in line with relevant legal and industry-specific standards.

How is data compliance different from data security?

Compliance is about ensuring organizations meet legal data requirements, whereas security is focused on protecting data from potential unauthorized access and breaches.

What industries are most impacted by data compliance?

While all businesses are impacted, the sectors facing most scrutiny include finance, healthcare, SaaS providers, logistics, and international e-commerce.

Do small businesses need to worry about data compliance?

Yes. There should also be particular focus for companies operating globally, storing consumer data, or utilizing cloud platforms with international users.

How often should data compliance policies be updated?

Policies should be updated at least annually and any time major regulations change in companies’ target markets.

References

European Commission. (2024). Data protection. Europa.eu.  https://commission.europa.eu/law/law-topic/data-protection_en#:~:text=Data%20protection%20-%20European%20Commission

Flinders, M. (2024, June 3). What is data sovereignty?. IBM.com https://www.ibm.com/think/topics/data-sovereignty

NIST. (2025). Privacy Framework. NIST. https://www.nist.gov/privacy-framework