Non-compliance Consequences

(OBJ 5.4)

Compliance is essential

• Compliance in IT is essential to avoid severe consequences
• It is a necessity

Consequences of non-compliance include

• Fines
  • Monetary penalties imposed by regulatory bodies
  • Example:
    • Fines coming from GDPR.
• Sanctions
  • Strict measures by regulatory bodies to enforce compliance
  • Range from restrictions to outright bans
  • Example:
    • Warnings, fines, and the confiscation of illegal income.
• Reputational Damage
  • Negative impact on a company's reputation
  • Significant and long-lasting in the age of social media
  • Example:
    • Equifax: Suffered a data breach which lead to a fall in its reputation
• Loss of License
  • Loss of the right to operate, relevant in regulated industries
  • Particularly relevant in industries where companies are required to maintain certain certifications or licenses.
  • Example:
    • Removal of a cryptocurrency for non-compliance with cybersecurity regulation
• Contractual Impacts
  • Breach of contracts due to non-compliance with laws and regulations
  • Can lead to legal disputes, financial penalties, or contract termination
  • Example:
    • A failed-to-comply company on data regulations could be in breach of its contracts with clients.
    • The clients could sue the company for damages, terminate their contracts, or both.

How to avoid compliance consequences?

• To avoid these consequences, companies should prioritize compliance by
  • Understanding and adhering to relevant laws and regulations
  • Implementing robust cybersecurity measures
  • Regularly reviewing and updating compliance programs