According to one recent study, the financial services industry in the United States experienced 744 data breaches in 2023 alone.
During the same period of time, 725 data breaches were reported in the healthcare sector.
If you ever wondered why banking and healthcare are such heavily regulated industries in terms of IT compliance, numbers like those are why.
But understanding the importance of IT compliance is one thing.
Actually doing something about it is something else entirely.
Nobody is arguing against a community bank or a private practice devoting as much time and attention as possible to data security.
It's just that the effort involved in that is often far more difficult than people realize, especially as technology evolves faster than the regulations themselves.
In an over-arching sense, IT compliance in regulated industries like healthcare or finance is important for two distinct reasons.
Compliance with HIPAA or the GLBA isn't a recommendation.
It's a requirement.
Keep in mind that the cost of a single HIPAA violation can range from $100 per incident for unintentional mistakes to as high as $1.5 million for "willful neglect and uncorrected violations."
It doesn't matter what size your organization is or how long your doors have been open - rules are rules and these are the types of costs that most community banks, private practices, and similar organizations simply cannot afford to deal with.
But more importantly, failing to maintain IT compliance in a regulated industry will typically lead to a data breach, which can absolutely damage the delicate trust you have with your customers, patients, and other key individuals.
Another study revealed that the cost of reputational damage alone from a data breach is around $1.57 million per incident.
Customers who have been burned by your negligence likely aren't coming back... and they're probably going to tell their friends and loved ones about the experience, too.
These costs are all before you get to the actual cost of the data breach itself.
That number hit $4.88 million in the United States in 2024 - an unfortunate increase that shows no signs of slowing anytime soon.
Will doing everything in your power to maintain compliance be a time-consuming, costly source of stress?
Probably - but if it helps to avoid these types of staggering costs, every last ounce of effort will soon prove worth it.
As stated, two of the key regulations that you'll need to concern yourself with include HIPAA and the GLBA.
Also commonly referred to as the Health Insurance Portability and Accounting Act, HIPAA governs the confidentiality, integrity, and availability of protected health information (PHI).
It applies to healthcare providers, health plans, and business associates who handle PHI.
The key requirements include the implementation of safeguards to protect health information, ensuring that data is encrypted, access controls are in place, and auditing is conducted regularly.
The Gramm-Leach-Bliley Act, abbreviated as the GLBA, applies to financial institutions, including banks, credit unions, insurance companies, and financial service providers.
It requires these institutions to establish safeguards to protect consumers' personal financial information.
GLBA’s regulations address data security, privacy notices, and the sharing of non-public personal information (NPI) between institutions.
Naturally, the biggest challenge of maintaining compliance with these regulations comes by way of the ever-changing regulations themselves.
Staying on top of everything can be complicated, particularly when something like HIPAA may evolve far slower than something like the GDPR in Europe.
Indeed, the break-neck pace at which technology continues to advance - and the slow pace of regulatory changes - makes it difficult to simply determine what the current status quo may be.
New technologies like cloud computing, machine learning, and Internet of Things (IoT) devices introduce unique challenges in terms of data protection, access controls, and encryption.
The number one step to take for maintaining IT compliance, regardless of the industry you're operating in, involves acknowledging that you will forever be trying to hit a moving target.
What it means to be compliant will constantly change, sometimes in unpredictable ways.
The burden is on you to take a proactive approach to changing with it.
In the short term, that means leaning on regular internal and external audits so that you always know what work you've completed successfully and what still needs to be accomplished.
Conducting periodic audits helps businesses ensure they are adhering to the required standards. Internal audits can be supplemented with external audits to provide an unbiased view of compliance.
Risk assessments will be another invaluable tool to that end.
Regular risk assessments identify potential vulnerabilities in systems, networks, and processes that could lead to non-compliance.
This process helps businesses understand the likelihood of risks and prioritize mitigation strategies accordingly.
In terms of implementing and especially updating your compliant IT systems, never underestimate how crucial security patches and updates will be.
Always make sure that systems and software are updated with the latest security patches is essential to compliance.
Unpatched vulnerabilities are often targeted by cybercriminals and can lead to security breaches.
Again: proactivity will be the name of the game in terms of navigating IT compliance in regulated industries like healthcare and finance.
Healthcare IT and banking IT requirements will change regularly.
"I didn't realize changes had been made" is not an excuse that will get you out of a HIPAA violation.
Especially when you're talking about healthcare and finance, establishing a culture that values compliance is one of the keys to achieving and maintaining compliance over the long term.
This includes senior leadership support and buy-in, employee training, and clear communication of compliance expectations.
There's also the simple fact that you'll need to document absolutely everything - every step you take to achieve compliance and every process you implement to maintain that status.
Some examples of the detailed records you'll need to keep include but are not limited to ones like audits, risk assessments, training sessions, and changes to systems or processes.
Written documentation is proposed by the U.S. Department of Health & Human Services as one of several new requirements for HIPAA compliance.
This documentation is essential in the event of an audit or investigation.
If it feels like all this is quickly becoming a full-time job, that's largely because it will be.
There are literally people within an organization called "compliance officers" who are tasked with making sure these things are accounted for on a daily basis.
If yours is an organization that can't necessarily afford to bring one or more people into the fold for these purposes, an alternative would be to enlist the help of a managed services provider (or MSP for short).
MSPs are third-party providers who handle some or all of your banking IT or healthcare IT needs on your behalf.
Some smaller organizations use them to replace their existing in-house IT people so that this money can be better used elsewhere.
Others just use them to handle specific tasks, like accounting for seasonal fluctuations in performance requirements.
In terms of compliance in particular, understand that MSPs specialize in understanding regulatory requirements and can guide businesses through the process of becoming compliant.
They can recommend best practices and assist in the implementation of compliant systems and processes.
MSPs also implement and maintain advanced security measures, such as encryption, firewalls, and intrusion detection systems, to help businesses meet regulatory standards like HIPAA and the GLBA.
They also conduct ongoing risk assessments to proactively identify and address vulnerabilities.
But from a long-term perspective, the major benefit of enlisting the help of an MSP comes by way of the ongoing monitoring and support they offer.
MSPs provide continuous monitoring to ensure that businesses maintain compliance even as regulations evolve.
They ensure that software is updated, systems are secure, and necessary records are kept for audits and inspections.
This means that compliance, even in heavily regulated industries, isn't necessarily something you need to spend so much time worrying about.
Your in-house IT people are free to spend all their time innovating and improving the quality of service you offer to your clients and patients, and you don't have to stress about getting the type of compliance violation that could literally cost you millions of dollars.
In the end, it would be a mistake to think about IT compliance as a "necessary evil" or an "unfortunate cost of doing business" the way some do.
Yes, compliance is forever changing - often unpredictably and in ways that might not quite make sense.
Yes, this means a lot of work for you and your people - sometimes at the worst possible moment.
But IT compliance is critical in regulated industries like healthcare and banking in particular because of the sensitive nature of the information that these organizations are responsible for.
If information in the banking sector is mishandled, it could lead to dramatic financial or legal consequences.
In healthcare, if patient data isn't adequately protected, it could change the course of a patient's life in a number of untold ways.
Both of these things underline what is perhaps the most important consequence for any organization that fails to take compliance seriously: reputational damage.
In both banking and healthcare, people are putting a significant amount of trust in your organization when they choose to come to you.
They're trusting you with their financial futures or their literal health.
At a certain point, it's not in their best interest to just "take your word for it" that you can do what you say you can in terms of protecting their privacy.
Compliance and regulations like HIPAA or the GDPR becomes an important series of checks and balances to that end.
That's why you must not only work to achieve compliance - you need to be proactive about maintaining it as well.
Regular audits and risk assessments are not a recommendation but a requirement, no matter what kind of business you're running.
Compliant IT systems need to be consistently updated and maintained or they won't remain compliant for very long.
You also need to be proactive about addressing any regulatory changes that may be on the horizon.
If you know that there is serious talk about a proposed change, don't wait for it to go into effect before you act.
Start to explore what that would look like today.
If you follow strategies like those outlined above, you'll be well on your way to maintaining compliance effectively, regardless of what life happens to throw at you.
Then, you can focus less on the regulations and more on what your IT infrastructure can do for you - which is a truly exciting position to be in.
If you'd like to find out more information about navigating IT compliance in regulated industries like healthcare or banking, or if you'd just like to discuss your organization's own needs with someone in a bit more detail, please feel free to contact us today.