Negative organizational impacts of non-compliance
1. Negative organizational impacts of non-compliance
Imagine a new driver is taking a road trip to visit a friend. A few miles into the trip, the driver forgot to stop at a stop sign. A police officer pulled the driver over and gave the driver a fine. Luckily, the driver didn’t cause an accident, so wasn’t sued for any liability. For organizations, fines and lawsuits are two common examples of the serious negative impacts of noncompliance in cloud security. Let’s first review compliance. Compliance is the process of adhering to internal and external standards and government regulations. Simply put, compliance is following rules set by laws, regulations, policy, standards, or guidelines. If you set a rule, follow it, and demonstrate that you are following it. Then, you’re in compliance. But, failure to follow standards and regulations results in noncompliance. Noncompliance is the failure to follow standards and regulations that are set by internal standards and policy, or external laws and regulations. As a cloud security professional, you’ll need to understand the importance of compliance and how to make sure the proper controls are in place to avoid the negative impacts of noncompliance. Let’s explore the most common organizational impacts of noncompliance. Negative organizational impacts include: financial loss, legal risk, reputational loss, and talent loss. Let’s first examine the financial risks of noncompliance. The cost of noncompliance can be significant. Regulators can fine or prevent organizations from conducting business. In addition to government fines and penalties, other financial impacts include: lost business from failing to meet existing contract terms, not being able to win bids for new contracts, significant costs to remediate compliance audit findings, and delays in product releases and other business activities. An organization that is not in compliance may be subject to legal risks like imprisonment of its leaders, fines, and shareholder and customer lawsuits. Reputational risk can be equally harmful. Trust is key to business relations and growth. Losing trust from customers, shareholders, partners and the general public can weaken or destroy a company’s brand, and nobody wants that. Lastly, organizations that fail to comply with industry and regulatory standards will have a more difficult time keeping and recruiting new talent. Qualified people will seek out companies that are trustworthy. Without strong talent, the company risks falling behind on innovating and creating products. The risks we just explored affect the organization itself, but there are also negative impacts of noncompliance on customers, partners, and vendors. For example, in a healthcare organization, a compliance failure could cause a leak of Protected Health Information, or PHI, to unauthorized parties. This not only has an impact on the organization, but also on the covered entity with which it has contracted. Covered entities include health plans, healthcare clearinghouses, and healthcare providers. Lastly, noncompliance will affect the patients whose data was compromised. As you progress in your journey to become a cloud security professional, you’ll continue to learn about many tools and techniques that’ll help you comply with regulation and better protect assets in the cloud.2. Let's practice!
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