What is IT Compliance? Basic Overview and Guidelines

Today’s interconnected businesses face an ever-increasing number of cybersecurity threats and regulatory compliance requirements. IT compliance is how your organization aligns your information technology (IT) systems and practices with relevant laws, industry regulations, and standards. A strong IT compliance posture is crucial to facing this intensifying cyber and regulatory hurdle. Let’s face it: the consequences of non-compliance are severe, ranging from substantial fines and legal action to irreparable damage to your company’s reputation.

This guide covers the crucial differences between IT compliance and IT security compliance, explains why prioritizing IT compliance is essential for your organization’s success by analyzing real-world examples, provides an overview of common compliance types to know, and then digs into what components are essential for creating an effective IT compliance program.

• IT compliance defined
• IT compliance vs. security compliance
• Why is IT compliance important?
• Examples of compliance fines
• 10 common types of IT compliance standards
• IT compliance program checklist
• How can you reduce compliance risk?

IT compliance defined

At its core, IT compliance is about aligning your organization’s IT systems, processes, and policies with relevant laws, compliance regulations, and industry standards by implementing appropriate security measures, maintaining accurate records, and regularly auditing and reporting on compliance status.

IT compliance requirements can vary widely depending on the industry, location, and type of data you handle. For example, healthcare organizations must comply with the Health Insurance Portability and Accountability Act (HIPAA) to protect patient privacy. Of course, one of the regulations governing financial institutions and the security of credit card transactions is the Payment Card Industry Data Security Standard (PCI DSS). Failing to meet these requirements can result in significant penalties, legal action, and reputational damage.

[Read also: The MOVEit breach is still going strong: Here’s how to keep your data safe]

IT compliance vs. security compliance

While IT and security compliance are closely related, they are not the same.

IT compliance generally refers to specific laws, regulations, and cybersecurity guidelines relevant to an organization’s IT environment. It involves ensuring systems and processes adhere to particular standards set by regulatory bodies, such as data protection laws like GDPR, financial regulations like PCI DSS, and other industry-specific regulations like HIPAA. IT compliance is typically focused on managing systems and user data to comply with legal and regulatory requirements.

On the other hand, IT security compliance is considered a subset of IT compliance, as it focuses on the security measures used to safeguard your organization’s assets and sensitive information from threats. By adhering to security protocols like SOC 2, standards like NIST, and frameworks like MITRE ATT&CK and Zero Trust, security compliance aims to protect data and IT infrastructure through measures that ensure operational functionality and reliability, identify and remediate vulnerabilities, and prevent unauthorized access.

However, there are significant overlaps between the two concepts: Many IT compliance standards, such as GDPR and HIPAA, have strong security components requiring organizations to implement specific security measures to protect sensitive data. Strong security practices can also help organizations meet their compliance obligations by reducing the risk of data breaches and other security incidents.

Both IT compliance and security compliance are essential and benefit each other to help organizations operate safely and legally in today’s digital landscape. Although compliance standards have strict guidelines, they provide valuable guidance to businesses on cybersecurity and data privacy best practices.

[Read also: What is security automation? The benefits, importance, and features]

Why is IT compliance important?

The risks of non-compliance are significant and can have far-reaching consequences for organizations. Some crucial risks include:

• Cybersecurity threats: Non-compliant organizations are more vulnerable to cyberattacks as they may lack the necessary security measures to protect against evolving threats. According to findings from the 2024 Thales Data Threat Report, 31% of organizations surveyed that failed a compliance audit in the past twelve months also experienced a breach the same year.
• Legal and financial penalties: Failure to comply with compliance requirements can result in hefty fines, legal action, and other penalties. For example, under GDPR, organizations can face fines of up to €20 million or 4% of global annual turnover, whichever is higher.
• Business disruption: In the event of a data breach, non-compliance can cut into your business’s bottom line. The 2023 IBM and Ponemon Institute study found that notification costs (activities that allow organizations to inform data subjects, protection regulators, and other third parties of a breach) increased 19.4% over 2022, and the cost of detection and escalation (i.e., investigations, audits, crisis management, etc.) rose 9.7%.

Examples of compliance fines

Sometimes, brands we know and trust make costly IT compliance mistakes. Here are some real-world examples of compliance failures over the past few years that help underscore the importance of prioritizing IT compliance:

• In January 2023, the European Commission fined Meta €390 million for violating GDPR by using personal data for targeted advertising without proper user consent. In May, the GDPR gave Meta a record-breaking penalty of €1.2 billion for putting European Union (E.U.) citizens’ data at risk by sending it to the U.S.
• In 2022, Robinhood Crypto agreed to pay $30 million to the New York State Department of Financial Services for inadequately addressing compliance risks in its anti-money laundering and cybersecurity programs.
• In 2021, the U.S. Office of the Comptroller of the Currency fined Morgan Stanley $60 million for failing to properly oversee the decommissioning of two data centers.
• On September 6, 2018, British Airways (BA) announced a data breach had occurred from June 22 to September 5. It took BA 76 days to detect the attack. Magecart, a Russian-linked card skimming group, accessed a Citrix remote access gateway using login credentials BA had given to cargo-handling firm Swissport.
  
  According to the Information Commissioner’s Office (ICO), multi-factor authentication (MFA) did not protect the compromised Swissport account. Once inside BA’s network, the attacker found a privileged domain administrator account and login granting “virtually unrestricted access.” The attacker then began searching servers and found unencrypted plain text files containing payment card details, which BA had mistakenly logged and stored since 2015.
  
  In its Penalty Notice, ICO noted one bright spot — the logs’ data retention period was only 95 days, so the attacker was limited to about 108,000 potential payment cards. However, the attacker moved to another BA blunder — a well-documented JavaScript vulnerability on BA’s payments site. Magecart edited it and stole cardholder data from nearly 400,000 BA customers. Wired reported that the payments website containing the problematic JavaScript was last updated in 2012. The ICO was so appalled by BA’s failure to use readily available security measures to quickly identify and resolve its security weaknesses that it issued its largest fine to date — £20 million.

As a singular error, it could be seen as fairly trivial. However, [the breach] was not found for so long and that [the] script had not been updated suggests a more systemic issue of IT governance at BA – meaning it is unlikely this is an isolated vulnerability. Effective monitoring would have picked this up quickly.

10 common types of IT compliance standards

Organizations face a wide range of IT compliance standards, depending on their industry, location, and data types they handle.

Some of the most common standards include:

1. Health Insurance Portability and Accountability Act (HIPAA)
   HIPAA is a U.S. law establishing privacy and security standards for protected health information (PHI). It applies to healthcare providers, health plans, healthcare clearing houses, and business associates covered entities engage with.
2. General Data Protection Regulation (GDPR)
   GDPR is a comprehensive data protection law that applies to organizations that process the personal data of E.U. citizens, regardless of where the organization is based. It requires organizations to obtain explicit consent for data processing, provide individuals with the right to access and delete their data and report data breaches within 72 hours.
3. Payment Card Industry Data Security Standard (PCI DSS)
   PCI DSS security standards protect credit card transactions and apply to any organization that accepts, processes, stores, or transmits credit card data.
4. Sarbanes-Oxley Act (SOX)
   SOX is a U.S. law establishing requirements for financial reporting and internal controls for public companies. It mandates maintaining accurate financial records, implementing internal controls, and regularly assessing and reporting on the effectiveness of those controls.
5. Gramm-Leach-Bliley Act (GLBA)
   GLBA is a U.S. law requiring financial institutions to protect the privacy and security of customer data through security measures, such as access controls and risk assessments. It requires organizations to provide privacy notices and opt-out options.
6. Federal Information Security Management Act (FISMA)
   FISMA is a U.S. law establishing information security requirements for federal agencies, including risk assessments, incident response plans, and regular compliance status reports.
7. FedRAMP
   FedRAMP is a U.S. government program standardizing mandatory security assessment, authorization, and monitoring for federal agencies that use cloud services to process, store, or transmit federal data.
8. Service Organization Control (SOC) 2
   SOC 2 is a voluntary data protection compliance standard developed by the American Institute of Certified Public Accountants (AICPA) for service organizations. It focuses on five fundamental principles: security, availability, processing integrity, confidentiality, and privacy.
9. ISO 27001
   ISO 27001 is an international information security management system (ISMS) standard. It provides a framework for identifying, assessing, and managing information security risks. Certification demonstrates the implementation of appropriate security controls and the organization’s commitment to improvement.
10. National Institute of Standards and Technology (NIST)
    NIST is a non-regulatory U.S. Department of Commerce agency that develops cybersecurity standards, guidelines, and best practices. Used across many industry types, the NIST Cybersecurity Framework provides a voluntary, risk-based approach to managing cybersecurity risk.

[Read also: 7 ways to minimize data risk and enhance privacy compliance]

IT compliance program checklist

While specific compliance requirements vary by standard and industry, there are several key components essential for an effective IT compliance program:

• Risk assessment: Regularly assess your IT systems and processes to identify potential compliance risks and vulnerabilities.
• Policies and procedures: Develop and implement clear security policies and risk management procedures that align with relevant IT compliance standards.
• Employee training and awareness: Provide regular training and awareness programs to ensure staff understand the importance of IT compliance policies and their critical role.
• Access controls: Ensure only authorized individuals can access sensitive data and systems using MFA, role-based access controls, and regular access reviews.
• Disaster recovery and data loss prevention: Compliance standards around disaster recovery aim to minimize the business impact of infrastructure failures by requiring your organization to implement robust backup and recovery processes.
• Encryption and data protection: Sensitive data should be encrypted both in transit and at rest to protect against unauthorized access or disclosure.
• Incident response and reporting: Create a plan for detecting, investigating, and responding to potential incidents. Include procedures for reporting security breaches to relevant authorities and stakeholders.
• Continuous monitoring and auditing: Monitor your IT systems and processes for potential compliance management issues, and regularly conduct compliance audits to assess your program’s effectiveness.
• Endpoint visibility: Real-time insights into the status of your IT assets enable you to identify and address potential compliance issues before they escalate.

How can you reduce compliance risk?

Reducing risk requires establishing a robust IT compliance program that aligns with both internal policies and external regulatory requirements through regular auditing, continuous monitoring, and updating compliance practices to keep pace with evolving standards and technologies. Educating employees on IT compliance policies, maintaining clear documentation, and implementing effective data governance can further mitigate risks.

By proactively managing IT compliance, organizations can avoid costly penalties, protect their reputation, and ensure the trust of customers and stakeholders. Remember, compliance is not a one-time task but an ongoing process that requires diligence, adaptability, and a proactive, holistic approach.

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