:: DPDP | Overcoming compliance challenges ::

Introduction

The Digital Personal Data Protection Act, 2023 ('DPDP'), a landmark in India's data protection journey, is now active. Many organizations have either completed their readiness assessments or are in the final stages of executing their compliance roadmaps. Concurrently, the Ministry of Electronics and Information Technology is nearing the completion of the DPDP rules, which are anticipated to be published for industry-wide consultation in the coming weeks. These rules will aid in the compliance with the DPDP Act.

The DPDP's operationalization poses a number of challenges. Particularly for small and medium enterprises, the DPDP's stringent requirements may present significant hurdles. Our evaluation of the DPDP's compliance landscape has identified common difficulties faced by organizations, necessitating action to ensure adherence. This thought leadership piece provides a synopsis of these challenges, along with recommendations to address compliance issues.

Commonalities in challenges

Inadequate data inventory & mapping | Resulting in unnecessary hoarding of data with heightened risk exposure:

Challenges in accurately identifying & classifying the personal data they collect, process, and store & consequently overlooking sensitive data and failing to implement adequate security measures.
The absence of a comprehensive understanding of personal data movement within an organization can obstruct effective data protection strategies. Without detailed data flow diagrams, it is challenging to identify vulnerabilities & protective measures.

Deficient data protection policies & procedures | Resulting in increased risks of data breaches:

Incomprehensive data protection policies that cover essential aspects such as data collection, processing, storage & dissemination.
Inadequate breach response strategies, causing delays in incident management, worsening breach consequences; & invoking regulatory fines.
Absence of comprehensive training for employees regarding data protection resulting in errors and unintentional data breaches.

Inadequate data security measures | Resulting in excessive access & susceptibility to exploitation of access rights:

Inadequate data encryption practices that leave personal data vulnerable to cyberattacks and breaches.
A susceptible network infrastructure that jeopardizes the security of personal data.

Inefficient management of rights of data principals (recipients or subjects) | Resulting in delayed response times to data subject inquiries & damage to reputation:

Ineffective record-keeping can complicate the process of addressing requests from data principals.
Inconsistent procedures for handling requests from data principals, leading to errors & inconsistencies.

Limited cross-border data transfer compliance | Resulting in failure to identify & assess risks and implement adequate safeguards:

Organizations may not conduct adequate due diligence on data recipients in other countries.
Organizations may not use appropriate transfer mechanisms, such as standard contractual clauses or approved codes of conduct, to ensure compliance with cross-border data transfer regulations.

Overcoming challenges

To address these issues organizations may consider the following steps:

Conduct regular compliance assessments | In order to proactively identify and mitigate risks.
Invest in data protection training | In order to empower employees to handle personal data responsibly.
Implement practical & robust data protection policies and procedures | This will enhance compliance & accountability.
Strengthen data security measures | This will protect personal data from unauthorized access and breaches.
Establish a process to manage compliance with rights of data principals | This will ensure that requests are responded in a prompt and accurate manner and prevent escalation of issues.
Review and update cross-border data transfer arrangements | This will ensure compliance with data protection laws in the respective countries.
Engage with a Data Protection Officer ('DPO') | To leverage on a DPO's expertise to navigate the complex regulatory landscape.

In light of the new regulations, corporations are compelled to & procedures, conducting regular data audits and orienting employees with data protection principles. Another critical aspect of the DPDP is the regulation of international data transfers, which are restricted unless solutions are in place to prevent access by foreign governments. Companies that utilize services transferring data abroad must ensure that the data is safeguarded and adheres to the standard contractual clauses or other measures sanctioned by the Indian government.

The DPDP aims to enhance the data privacy framework in India. However, comprehending and addressing the challenges associated with its implementation is crucial for its success. For any assistance or to discuss areas where you may require support, please feel free to contact our specialists at contactus@mgcglobal.co.in.

If you have not begun your DPDP journey, now is the time to start!

Have a great weekend.

Best regards,

Markets Team

MGC Global Risk Advisory

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