Data Privacy and Protection Compliance under GDPR and Beyond

Data Privacy and Protection Compliance under GDPR and Beyond

Data privacy and preserving the integrity of consumers’ personal information are core focus areas of regulatory compliance for financial services firms. The EU’s General Data Protection Regulation (GDPR) is the primary global benchmark for the protection of consumer data. It provides a clear set of principles that firms must follow, but the implementation of these principles can present a significant operational challenge for firms, particularly those operating across multiple jurisdictions.

Core Requirements of GDPR

GDPR is built upon a core set of fundamental principles that specify how firms must handle the personal data of their customers. Firms are required to comply with these 7 key principles:

• Lawfulness, Fairness and Transparency: Data processing must be lawful, fair and transparent to the individual, and firms must have a valid reason for storing or processing any personal data
• Purpose Limitation: Data must only be collected for specified and legitimate purposes and must be processed in a manner consistent with these purposes
• Data Minimisation: Firms must only collect the relevant personal data that is strictly necessary for the specified purpose
• Accuracy: Data stored and processed must be accurate and kept up to date, and firms must take every reasonable step to ensure that inaccurate data is erased or rectified immediately
• Storage Limitation: Personal data should be stored for no longer than necessary and in a form that does not identify the individual, other than for the specified purpose
• Integrity and Confidentiality: Firms must take appropriate steps and utilise technical and organisational safeguards such as encryption and access controls to protect personal data against unauthorised access, loss, destruction or damage
• Accountability: Firms are responsible for and must demonstrate clear compliance with all GDPR principles and assign accountability for the control and possession of personal data

Brexit Divergence for GDPR and UK GDPR

In the immediate post-Brexit regulatory landscape, the UK retained the core principles of GDPR under domestic law and created UK-GDPR. The UK is now starting to diverge from the EU framework by creating a UK-specific framework through legislation such as the Data Protection and Digital Information Act 2024. The main areas of divergence are in the definition of personal data and the requirements for data protection impact assessments. This creates a dual compliance for firms operating in the UK and EU, requiring them to navigate two slightly different regulatory regimes with separate jurisdictional scope. In the UK, the independent authority responsible for enforcing UK GDPR is the Information Commissioner’s Office (ICO).

International Data Transfer Agreements

One of the primary challenges for both UK and EU firms under GDPR is the transfer of personal data to non-GDPR countries, including those found to have insufficient data protection laws. These countries are considered under an EU adequacy decision, and if they cannot demonstrate sufficient safeguards and protocols in line with GDPR, then they are labelled inadequate. In these circumstances, firms must use specific legal instruments such as International Data Transfer Agreements (IDTAs). Data Transfer Agreements present a complex operational challenge for firms as they are required to conduct thorough due diligence on their international partners. UK and EU firms using IDTAs must also ensure that the correct legal mechanisms are in place for all cross-border data transfers. The EU’s adequacy decisions are also subject to ongoing review and can therefore change at any time, requiring firms to stay up to date with the latest decisions. Data privacy regulations are likely to continue to evolve across global markets. Firms should look beyond current compliance mechanisms and focus on future-proofing their systems and processes. Firms operating in the UK will also need to monitor the growing divergence between the EU and UK frameworks and adjust their compliance initiatives accordingly. Global data privacy rules are evolving—are you keeping up?

Get in touch with Novatus Global to strengthen your compliance with GDPR, UK GDPR, and international transfer rules.