Organizations must adhere to a variety of regulations and standards in the today’s dynamic digital world to preserve operations like security, transparency and ethical operations.

GRC has become the necessity for every organization . It is not just buzzword. Whether you are a multinational enterprise or startup, knowing the important laws that affect compliance and risk management is essential. In this blog we will discuss 5 most important acts such as HIPPA, PCI DSS, CMMC, SOX, GDPR with real life example. In order to improve GRC procedure every company should be aware of it.

By the end of today’s discussion ,  you’ll have a clearer understanding of how these frameworks and regulatory standards interact, complement each other, and guide organizations toward achieving comprehensive data security and compliance. We will see each of this  frameworks   with example and why we should use  ,  So let me explain this in the simplest way possible.

Here is the list of some common  GRC frameworks.

 

 

Frameworks

HIPPA Compliance

Health Insurance Portability and Accountability Act is known as HIPPA. Basically it is the U.S. Law made in 1996 to protect the privacy and security of people’s medical information The HIPPA framework ensures the confidentiality, integrity, and availability of protected health information(PHI).It instructs healthcare organizations how to handle and protect sensitive data like: Your name, medical history, Test results, Health insurance details .Any additional information that can be used to identify you is referred to as PHI(Protected Health Information).

 

 

Why is HIPAA important?

What if someone has access to your medical records without your permission?

Your privacy would be compromised right?, and you feel  insecure. HIPPA prevents this from occurring.

HIPAA helps to ensure:

  • Your information is kept confidential
  • It is not disclosed without your permission
  • It is kept safe from hackers or leaks

Example:

Suppose you go to hospital to receive the treatment because you are feeling unwell now your doctor checks you and store your personal information on their computer systems and your physician requests a second opinion on your report from an expert. they can not just send it without your permission. They will update you first for your permission to maintain the confidential data. The Hospital also uses strong security  so even if someone tries to steal your information, it would be bunch of unreadable code to them. HIPPA is like your personal security guard to prevent your health information from hackers.

PCI DSS Compliance:

PCI DSS stands for Payment Card industry Data Security Standard, which ensures the secure handling of sensitive cardholder data .Companies that handle credit card transactions must comply with PCI.

It was developed by major credit card companies like:

  • Visa
  • Mastercard
  • American Express

Why is PCI DSS Important?

We are living in Technology era every time you swipe, tap or enter credit card number online, Your financial private information is at risk. If companies don’t protect it properly, hackers can steal your card details, which might result in fraud or financial loss.it helps to build trust between you and the business you are paying . PCI DSS helps companies implement strong governance , manage financial risks, and helps to stay compliant with industry standards.

Example:

Let’s suppose there is one company that sells products online and accepts payment through credit and debit cards, and to keep the customer information safe and secure they follow a security standard called PCI DSS. The company’s management ensure that there are clear regulations as part of governance, such as limiting card data handling and encryption all information to prevent unauthorized access. By doing this companies keeps customer data safe, avoids risk which helps to build the trust relationship with customer and convert in your permanent customer.

CMMC Compliance:

It stands for Cybersecurity Maturity Model Certification) ,GRC most famous framework used to maintain the security of data.it is created by the U.S. Department of Defense(DOD) to  ensure that contractor and subcontractors are adhering to strict security procedures in order to safeguard confidential  government data. This framework  is crucial for businesses working with the department of Defense, as non compliance can result in loss of contracts.

Why is CMMC Important?

As we all know the highly sensitive material, weapon designs or troop movements plans are frequently involved in government defense programs.

So it is necessary to maintain the security of this data. If a company working with DoD has weak cybersecurity ,then sensitive data can be compromised or exposed which is not good.

It can lead national  security risks, lose of defense secrets, legal and financial damage. Therefore, the DoD created CMMC to establish cybersecurity levels and to hold  contractors responsible for protecting data.

In world of GRC,CMMC helps  companies manage cyber risks, policies and meet strict government standards.

Example:

Imagine there is one ABC company that builds software and they want to get a government contract from the U.S. department of Defense. But to get this contract it is necessary to have strong controls and comply with CMMC.

To maintain the security controls like Data access, Regular system updates and patching, multi-factor authentication, incident response planning the company sets up clear policies for all employees on how to handle and protect government related data. They appoint a compliance officer to supervise it.

SOX Compliance:

SOX stands for Sarbanes-Oxley Act ,it is a law in the united states that was designed to maintain financial reports with in a company. It was introduced after major financial fraud ,where companies manipulated their financial reports. To stop this from ever happening  again, Sox came into the market.

Why is SOX important?

According to the SOX rule the big companies that trade on the stock must be truthful about their financial situation , they can not deceive or conceal the losses.

It ensures:

  • Businesses are honest about their earnings growth .
  • They have rules and checks in place to catch errors and fraud.
  • The senior executives such as the CEO and CFO must personally approve the financial reports so they cannot just point the finger at someone else if something goes wrong.

Example:

Suppose there is one company that makes electric products. It is a public company ,which means people can buy its shares on the stock market. And now an investor want to impress their investors  So he told the finance team to make the profit look higher in the reports .they hid some losses and added fake sales numbers.it is big risk for the company the stock can crash, investors lose a lot of money ,and it also affects the brand and the relationship with customers. That is the reason every firm should follow the SOX because it protects investors from fraud, build trust in public companies and makes company leaders responsible for what they report.

GDPR Compliance

GDPR stands for General Data Protection Regulation. It is a  law introduced by the European Union(EU) to protect  people’s personal data  .GDPR helps  organizations create strong data governance policies. It reduces the risk of data breaches. If companies are following  GDPR, it means they are legally complying with EU privacy rules.

If a business manages the data of EU individuals, it must adhere to GDPR  regulations even if it is not located in Europe.

Why is GDPR important?

If any organization  shares your personal  data with another organization without your permission. This is where GDPR becomes important .

GDPR make sure :

  • It ensures companies must take your permission before using your data.
  • It allows you to remove your data if you no longer want to share it.
  • It forces companies to handle data securely and transparently.
  • It gives the people the right to know what data is collected.

Example:

Imagine you register for travel app. You enter your all details  like name ,mobile number, email etc, and you start receiving random promotional emails and SMS from hotel booking websites, travel agencies and even insurance companies even though you never shared your data with them .

It is happening because the companies you signed up for shared your data with third party companies without your permission.

This is a clear violation of GDPR. If the company was under GDPR , they would have to ask for your permission before sharing your data . If the company does not  follow the GDPR, they will face legal penalties and heavy fines. So it is mandatory for all organization to follow  GDPR compliance.

If you want to integrate GRC frameworks like HIPAA Compliance, SOX Compliance, or GDPR Compliance into your enterprise systems, then you can read   this detailed blog  https://thinkcloudly.com/blog/how-to-integrate-grc-with-enterprise-it-systems/  to understand their importance and impact on business security, governance, and risk.

Conclusion:

In today’s digital world, protecting confidential information and adhering to regulations isn’t  just good practice but also a need .HIPAA,PCI DSS,CMMC,SOX and GDPR are not just legal requirements, they are powerful frameworks that help organizations stay secure ,transparent and trusted.

By understanding these all frameworks:

  • Companies can stay out of legal trouble.
  • Increase the trust of investors and customers
  • Establish a culture of accountability and responsibility

Each standard plays a unique role in the GRC, whether  it’s safeguarding patient records, protecting customer payment data, securing national defense information, ensuring financial honesty, or respecting user privacy .GRC frameworks are not just about ticking boxes it is all about building a safe ,ethical, and sustainable business. So every organization must try to follow these frameworks to maintain the privacy  of data.

Do you want to learn more about GRC topics?

Check out my other GRC blogs here   https://thinkcloudly.com/knowledge-center/ for simplified insights, real life examples and tips that will help you to improve your organization’s   governance and compliance journey.

 

 

 

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