Data compliance: Standards, regulations, and best practices

Data compliance has evolved from a once-a-year checklist task into a core pillar of how SaaS companies operate. Data compliance regulations have grown increasingly strict and complex as organizations store and manage more sensitive data than ever.

Every new platform, system, and workflow adds more insight into customer records, financial details, or private insights. And with the rise of cyberthreats, ransomware, and other data risks, companies are expected to protect their customers’ data — and demonstrate how they’re doing it.

What’s data compliance?

Data compliance focuses on meeting the legal, regulatory, and security standards that dictate how data should be collected, stored, accessed, and protected. These rules exist to keep your information safe and prevent it from being exposed, misused, or accessed by unauthorized parties.

Think of data compliance like guardrails that guide your data throughout its lifecycle, defining its journey in your organization. These standards support broader data governance practices, keeping teams accountable and maintaining transparency around how data moves through the business with the appropriate frameworks.

When compliance slips, teams lose track of where data lives, who has access to it, and whether it’s accurate, opening the door to serious data integrity issues. Noncompliance can lead to regulatory fines, legal repercussions, and reputational damage.

Data compliance vs. data security compliance

While often used interchangeably, data compliance and data security compliance differ in meaning and operational ability.

Data compliance focuses on meeting the regulatory and industry-specific requirements for handling sensitive information. This includes privacy rules, documentation, consent management, and data retention policies.

Data security compliance is centered around the technical protection tools and mechanisms that are used to protect that sensitive information: network segmentation, access controls, identity management, encryption, or monitoring.

Key regulations, standards, and frameworks

While the specifics vary depending on the type of business, most regulations for data compliance share common themes in terms of legal requirements, frameworks, regulatory mandates, and industry standards.

Here are some of the most widely recognized regulations and standards.

General Data Protection Regulation (GDPR)

GDPR dictates the rules for collecting, storing, managing, and sharing the personal data of users in the European Union (EU). This regulation applies to any company that processes the personal data of EU residents. Some of the data privacy compliance requirements include explicit consent, data minimization rules, and the ability to access or delete their data at will.

Health Insurance Portability and Accountability Act (HIPAA)

HIPAA is a U.S. federal law that protects medical information handled by healthcare providers, insurance companies, and their business associates. It mandates regulatory rules and controls for electronic health information, including data access, audit logs, and strict policies for how information is managed and disclosed to patients and their preferred personal representative.

Payment Card Industry Data Security Standard (PCI DSS)

A global industry standard, PCI DSS applies to all organizations that store, process, or transmit card payment data. It outlines an overarching set of requirements for network security, identity protection, encryption, and assessing vulnerability. Noncompliance can lead to data restrictions and substantial fines from card network providers.

Sarbanes-Oxley Act (SOX)

SOX is a U.S. federal law that establishes rules for publicly traded companies about financial reporting and internal control. These guidelines were created to protect investors against fraud and other financial misconduct. Organizations are required to maintain accurate audit logs and ensure that their systems can’t be manipulated or accessed without authorization.

Benefits of compliance — and the risks of getting it wrong

Effective data compliance reduces risk, builds trust, and reinforces organizational resilience. But failure to maintain compliance — whether through oversight or poor strategy —can expose your business to financial penalties, legal action, and reputational harm.

Benefits of data compliance

• Builds trust: Customers and stakeholders expect their information to be handled responsibly, and strong data compliance proves that your organization takes security seriously.
• Protects from breaches: Data protection compliance frameworks impose strict controls around data access, monitoring, encryption, and incident response. These regulations reduce the likelihood of successful cyberattacks or other breaches.
• Aligns with best practices: Staying compliant forces teams to use accurate, consistent data management standards across the organization. With up-to-date security controls, it creates smoother processes with fewer errors.
• Promotes continuity and integrity: Regulations ensure data integrity by mandating things like backup, recovery, and auditing protocols. When data is validated, traceable, and recoverable, teams can make informed decisions with confidence.

Risks of noncompliance

• Penalties and fines: Failing to meet compliance requirements can result in substantial fines, legal action, and costly corrective measures.
• Damage to trust and reputation: In industries with high data sensitivity, failures in compliance can cause significant reputational damage and a loss of trust from your customers and investors.
• Operational disruptions: Noncompliant systems make auditing harder and increase the likelihood of breaches. When regulators intervene, organizations are forced to pause operations.
• Exposure to cyberthreats: Noncompliant organizations lack system security and monitoring, leaving them vulnerable to cyberthreats, breaches, and data loss.
• Fragmented data systems: Inconsistent systems and processes can lead to issues like data silos, inaccurate reporting, and overlap across teams.

Best practices for data compliance

Let’s explore best practices for data compliance to keep your organization running smoothly and efficiently.

Conduct regular risk assessments and data inventory

Compliance starts with knowing what data you have, where it lives, and who has access to it. Regular risk assessments will identify vulnerable areas in your systems and potential threats. A centralized data warehousing structure or technical data catalog combined with an open table format makes it easier to track and classify sensitive information, enforce controls, and respond quickly to incidents.

Implement least-privilege access and identity governance

Access controls will reduce risk and prevent exposure by limiting users to access only what’s necessary for their day-to-day responsibilities. Identity governance, including regular access reviews, multi-factor authentication, and automating user identity maintenance, will keep permissions in check.

Use encryption and key management for data protection

Encryption protects data when defense mechanisms fail and a breach occurs, whether it exists in cloud storage or a security data lake. With encryption, you can ensure sensitive information is unreadable without authorized access. To keep your organization confidential and compliant, manage your encryption by rotating keys and storing them securely.

Maintain comprehensive monitoring, logging, and detection

Consistent monitoring across data pipelines, apps, and infrastructure exposes suspicious activity and noncompliant behavior. Collect audit logs, track access, and monitor activity to detect issues and maintain compliance records.

Build automated data flows

Automated data pipelines ensure data arrives consistently and accurately, eliminating the manual errors that put data security and compliance at risk. Automated data flows also maintain clarity and reliability around data transformation logic and tracking.

How Fivetran supports data compliance

Compliance depends on secure, reliable data. Fivetran simplifies this with fully managed pipelines that keep your data accurate, consistent, and audit-ready at all times.

Reliable data pipelines cut down manual work, save resources, reduce risk, and strengthen governance across the business. Fivetran automatically tracks schema changes, logs metadata, and preserves data lineage so you can meet compliance standards, respond to regulatory requests, and maintain complete audit trails.

Fivetran’s platform also includes built-in security safeguards that protect data while in transit and at rest — plus governance capabilities that support transparency, reporting consistency, and access controls.

Ready to free up teams to focus on compliance priorities, security, governance, and strategic initiatives? Get started for free today.

FAQs

How can organizations meet data compliance standards?

To meet standards, start with a clear compliance strategy, identify which regulations apply to your business, and create a data inventory to map out how your data moves across systems. Implement access controls, secure architecture, and compliance data management best practices.

What are the 5 steps to compliance?

Most compliance frameworks follow these stages:

1. Identify and categorize sensitive data
2. Map the flow of data and assess risk
3. Implement required controls
4. Monitor and document activity
5. Review, audit, and improve systems

How can organizations ensure compliance with the Data Protection Act?

Companies can stay compliant with the Data Protection Act by maintaining lawful data processing practices, securing data at every stage of its lifecycle, enforcing access controls, and keeping accurate compliance documentation. All these actions need to stay updated with regulatory changes to confirm adherence.

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