The General Data Protection Regulation, enacted in May 2018, provides data protection rights to EU citizens. It has changed how data is collected, processed, and stored across different industries, including SaaS. GDPR is as essential for business-to-business (B2B) relationships as it is for business-to-customer (B2C).
GDPR is crucial for the SaaS industry as SaaS founders provide their services over the internet and oversee large amounts of data. GDPR requires businesses to explain what data is stored, how it is processed, the purpose of processing, and where it will be transferred.
As a SaaS founder, you must know whether you are a data controller or processor and the implications of this role. Usually, SaaS providers are both controllers and processors. Being a controller, processor, or both, in either case, you are required to update your policies, practices, and the way you handle data under GDPR.
In this SaaS founder guide, we will provide you with all the necessary details needed when trying to become GDPR compliant.
What do SaaS companies need to know about GDPR?
It is not easy to become fully compliant with GDPR. SaaS industries have to consider many things when combining GDPR with their operations. Below are a few things to keep in mind about GDPR.
Data Processing Agreements (DPAs)
A data processing agreement is a legally binding agreement between a data controller (i.e., a company) and a data processor (i.e., a third-party service provider). First, both data controllers and data processors must sign a data processing agreement that will clearly explain what is expected of them in their respective roles, responsibilities, and expectations of each client. Furthermore, it should include the security measures taken to process data securely.
You must ensure the third-party vendor or processor you are collaborating with is also compliant with GDPR. If not, it’s better to ask them to become compliant. However, you should reconsider collaborating with them if they don’t consider becoming GDPR compliant. A SaaS founder must ensure third-party compliance with GDPR to remain fully GDPR compliant.
Today, cyber-attacks are on the rise, and personal data privacy has become a more common concern than ever before. “In 2021, approximately 217 million users in the United States were affected by data breaches”. One small breach can cause heavy fines for your business, making security crucial.
Protection of personal data is not only necessary for following the regulation but also for enhanced business sense. It can increase customer trust in your service. Often SaaS companies assume that adequate security measures and ISO/IEC 27001 certification are enough to prove their GDPR compliance. However, this is not the case, and they must take extra steps to ensure data protection.
Is there a way to get GDPR compliant for SaaS companies?
As SaaS companies work closely with consumer data, they must comply with GDPR laws and follow the necessary steps to protect customer data and avoid serious consequences. It may be challenging, but you can get ready to be GDPR compliant by following these steps.
Read the law
Reading and understanding the law is the first step. Relying on the cliff notes will not be enough in this case. You can’t just move away after adding a pop-up to your website. It is essential for everyone in your company who handles customer data to understand the law and make the safest decision based on it. As for SaaS companies, data management is much more integral and intricate than any other website. Other roles, including developers, marketers, sales team, etc., should understand what GDPR covers. They must work together to ensure data protection.
Data mapping is crucial in GDPR compliance. It helps you inform your users about data collection and your privacy policies. You must ensure it is clear early enough so that users can decide what you can do with their data. Moreover, you should also give rights to customers if they want their data to be forgotten or erased.
Add the pop-up
Make a strategy to get in touch with users
GDPR compliance requires businesses to inform users about what happens to their data as well as when a data breach occurs. You must make a strategy to get in touch with users if any cyber incident occurs at your company and create an incident response strategy to deal with the cyber-attack.
What are the key changes that a company needs to make to be compliant with GDPR?
Before discussing the key changes a company needs, let’s highlight the common mistakes many companies make regarding GDPR:
- You take privacy as a side factor, thinking it is unnecessary. In this era of technology, privacy is the most common concern and should be treated accordingly.
- Another mistake you make is to think you are already GDPR compliant when you’re not. You must regularly assess your operations and data processing activities to ensure compliance.
- You may think GDPR is not for you or doesn’t apply to your company. This is not the case. Every company, whether large or small, must comply with the regulations as long as it handles customer data.
- You understand this rule’s importance but don’t have time to align it with your operations. It is your responsibility to take out time for GDPR compliance.
Key changes for GDPR compliance
We have compiled a few things you must ensure for GDPR compliance:
Raise awareness across your business
Security awareness is critical before bringing a new rule into the organization. Raise awareness among key people, decision-makers, and employees about the new legislation. They should be aware of the potential impact of compliance and identify areas that need attention. As soon as you plan for GDPR, address all the aspects, including IT, budgetary, governance, and communications implications.
Appoint a Data Protection Officer (DPO)
A data protection officer (DPO) oversees data protection compliance and has the knowledge and authority to fulfill this responsibility effectively. If you are an organization with 250 employees or more, a public authority, or process data regularly on a large scale, you should consider appointing a DPO to carry out processes.
Audit all personal data
It’s never too late to start documenting. Document all your personal data, where it is stored, where it comes from, and who you share it with. Have effective policies and procedures in place to prove your compliance with GDPR. For example, if you have shared inaccurate personal data with any other organization unknowingly, you must inform them so they can correct it in their records.
Conduct Data Privacy Impact Assessments (DPIAs)
In a high-risk situation, you may need to conduct a privacy impact assessment (PIA), such as introducing new technology or where your operations may affect individuals. In this situation, you must familiarize yourself with the PIA Code of practice so you can understand how to execute DPIA in your company. Identify areas to conduct DPIA, who will conduct it, and who must be involved. A data protection officer is responsible for conducting DPIAs in your organization.
Identify & document data processing activities
GDPR modifies an individual’s rights allowing them to have more control over what happens with their personal data, based on your legal framework for processing data. You should identify different types of data processing activities and document them based on your legal framework.
Review cookie consent policy
GDPR requires businesses to be clear about consent and ask consumers how they want their data to be handled. Also, you must ensure that your processing activities meet the required GDPR standard. Review your consent recording system and make an effective policy to ensure an effective audit trail.
How to be compliant with GDPR from a SaaS founder’s perspective
Firstly, it is very important to determine whether you are liable for GDPR compliance or not. Ask yourself the following questions:
- Do EU citizens use my solution?
- Is there any subscription function on my website?
- Do I have any comments section?
- Can users log in to my website using third-party apps?
If you answered yes to any of these questions or at least one, it means your business handles user data one way or another, and you need to get GDPR compliant. Let’s discuss how you can become compliant with GDPR.
Encrypt all personal data
Encryption is an effective method to make data unintelligible for those not having decryption keys. The first step to becoming GDPR compliant is to encrypt all data while it is being stored or transferred. Although data breaches are inevitable, encrypting personal data can reduce the risk as much as possible. If your company doesn’t have enough resources to encrypt data, you can use alternative methods, such as pseudonymization, as long as you have a legitimate reason.
Consider HTTPS essential for applications
Contact us/sign-up forms often require customers to add their personal data, including names, emails, phone numbers, etc. Storing and transferring this information as plain text can open the backdoor for hackers. Use encryption methods for these kinds of forms. Also, employ HTTPS to encrypt all data sent from a client to the server using cryptographic protocols.
Update your cookie consent banner
Once you have added the cookie consent banner that will automatically pop up on your website, you must keep it updated too. The language it contains should be easy to read and understand. Under GDPR, the pop-ups should also contain an opt-out button for users who do not want to give cookie consent.
Create a record of data processing flows
As a SaaS founder, you are responsible for recognizing how customer data transmits in and out of your company. Keeping a record of data processing flows and activities can help you achieve GDPR compliance. The task doesn’t end by only keeping a record of processing flow, GDPR requires companies to maintain and update those records from time to time.
Implement technical and organizational measures
As mentioned above, data should be encrypted either by anonymization or pseudonymization, methods recommended by GDPR. Moreover, data no longer in use should be deleted to declutter excessive data. Scan your systems, devices, and networks regularly to identify security vulnerabilities. GDPR compliance is not only the responsibility of management or the DPO. Employees must be aware of their data protection and security measures responsibilities.
What are the implications of GDPR for SaaS companies?
While GDPR compliance can reap many benefits for SaaS companies, non-compliance can have severe consequences on the business. SaaS founders should keep a keen eye on the processes to ensure compliance so that nothing goes wrong. If done correctly, it can help companies enjoy the following benefits:
- Build agile security capabilities
- Enhanced brand reputation
- Facilitated integrations
- Improved leadership and targeted feature investments
- Increased customer trust and credibility
The GDPR and the importance of personal data
Data privacy has become more important than ever before. As the risks of cyber-attacks increase, people become more concerned about the security of their sensitive information. In this digital world, we have to share our personal information online. Cybercriminals are always looking for security gaps in systems to attempt cyber-attacks.
The General Data Protection Regulation (GDPR) plays a crucial role in protecting personal data as it imposes strict laws on businesses that handle personal data. Over the years, GDPR has inspired many states to adopt such laws to ensure data privacy, such as the California Consumer Privacy Act (CCPA). The main purpose of these laws is to give more control to users over their data. Also, GDPR enables consumers to decide what happens with their personal data and how long businesses can store it.
Cybersecurity has become a significant concern for companies across the world. Such laws ensure consumer privacy so that no one can misuse their personal data. Do you have problems with getting GDPR compliant? Book a demo today to automate your cybersecurity with CyberArrow.