Navigating technology compliance challenges for SMEs

Technology is a critical part of SMEs’ operations and growth. We rely on it to improve efficiency, productivity, innovation, and customer satisfaction. However, it also comes with certain risks and responsibilities, including compliance with evolving regulations and standards governing the collection, processing, and protection of data and information.

Compliance establishes a trust relationship and mutual benefit between you and your customers, partners, and regulators based on respecting and protecting all parties’ rights and interests. Additionally, compliance isn’t merely a legal obligation but a strategic advantage, ensuring business continuity, avoiding fines and penalties, and building trust and reputation with stakeholders. 

However, this is easier said than done, especially for SMEs struggling to keep up with changing technologies and the complex regulatory frameworks applying to them.

Regulatory challenges for SMEs 

1. Limited resources and expertise

Limited financial and human resources make conducting audits, implementing policies and procedures, training staff, and monitoring performance challenging. You may also need more technical expertise and knowledge to understand and comply with the specific requirements and best practices of different technologies, such as cloud computing.

2. The dynamic nature of technology

Technology is constantly advancing, creating new opportunities and challenges. However, it often outpaces the regulatory frameworks designed to govern it, leading to gaps and uncertainties. For example, some technologies like biometrics may raise ethical and social issues that existing laws and regulations don't adequately address. A proactive and flexible approach to compliance will help you anticipate and adapt to emerging trends, risks and engage with experts for guidance and feedback, and incorporate ethical considerations in AI to ensure accountability.

3. Heightened focus on data protection and privacy

Data is one of your SME's most valuable assets, enabling a deeper understanding of your customers, market dynamics, and preferences, all while enhancing the quality of your products and services. However, it also comes with high expectations and obligations from data subjects, who have the right to control and protect their personal information.

Data protection and privacy regulations, like the General Data Protection Regulation (GDPR) in the European Union or the Protection of Personal Information Act (POPIA) in South Africa, impose strict rules and standards on the handling of personal data.

This includes granting data subjects various rights, including managing their data. It’s crucial to comply with these and country-specific regulations and implement measures to prevent data breaches or incidents. To delve deeper into why data protection policies are a must-have for your business, check out our article on the subject. 

The consequences of non-compliance

According to an Information Regulator of South Africa report, POPIA complaints increased by 30% between 2021 and 2023. It also states that the most common types of complaints relate to direct marketing, information access, and security breaches.
Consequences of non-compliance with technology regulations involve legal, reputational, operational, and financial risks. Understanding the multifaceted risks associated with non-compliance highlights the urgency of prioritising data protection policies to safeguard your business from these detrimental consequences.

Overcoming challenges and achieving compliance

• Comprehensively assess the current state of technology compliance and areas for improvement.
  
  
• Develop and implement a compliance plan and align it with your business goals and values.
  
  
• Monitor and evaluate the effectiveness of your technology compliance plan using relevant indicators and collecting feedback from internal and external sources.
  
  
• Review and update the plan regularly, considering the changes and developments in the technology and regulatory environment.

Risks and rewards of tech compliance

Compliance isn’t just about meeting legal standards; it’s a gateway to minimising risk and building trust. Embracing a proactive approach to compliance is an investment in long-term reputation and stakeholder relationships.

Ready to navigate the complexities of tech compliance? Get in touch today or read more in our guide to IT governance, risk, and compliance.