What is a privacy impact assessment?
A privacy impact assessment (PIA) is an analysis an organization conducts to assess how personally identifiable information (PII) is handled. This practice ensures compliance with regulations, such as the General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA). The organization reviews its processes to identify and evaluate the risks of privacy breaches and security-related incidents.
Businesses use privacy impact assessment software to evaluate, track, and report on the privacy implications of their business data. PIA software saves time while ensuring compliance and uncovering privacy risks.
PIAs are often conducted by privacy officers or legal teams, but require participation from many organizational stakeholders.
Why are privacy impact assessments necessary?
Organizations use PIAs to manage the potential privacy risks associated with the data they process and store. Many regions have data protection and privacy laws; failure to comply results in significant fines and ramifications.
PIAs help organizations proactively identify risks and vulnerabilities in their data practices to reduce the likelihood of data breaches and reputational damage from security incidents.
Benefits of a privacy impact assessment
Privacy impact assessments are valuable practices that help organizations identify and manage privacy risks and consequences. Businesses that conduct PIAs offer numerous benefits to organizations, including:
- Complying with laws and data regulations. The core benefit of a PIA is that it ensures compliance with privacy frameworks and privacy acts. PIAs are particularly crucial under United States and European laws. The E-Government Act of 2002, Section 208 lays out the requirement for agencies to conduct PIAs. General Data Protection Regulation (GDPR) also requires data protection impact assessments under certain circumstances, such as when data being processed could result in a high risk to individuals’ rights and freedoms.
- Reducing or eliminating costly and damaging mistakes. PIAs identify and assess privacy risks early, allowing organizations to take steps to mitigate them. Data breaches and compliance violations drain finances and damage brand reputation. These mistakes inhibit normal business operations and future endeavors.
- Proving dedication to preventing privacy risks. Conducting PIAs demonstrates to employees, vendors, customers, and other relevant stakeholders that the organization takes privacy seriously. A commitment to preventing privacy risks also builds trust with all parties.
How to implement a privacy impact assessment
The approach for implementing a privacy impact assessment differs across organizations and project circumstances. However, most organizations take these steps to implement a PIA.
- Determining whether there is a need to conduct a privacy impact assessment. Organizations can conduct PIAs to review various data processes or for a specific project. When choosing the specific use case, the team must consider which types of PII they use, which laws and regulatory frameworks might be applicable, and how the data is handled. A PIA may not be necessary if no PII is involved in a project or if somebody has previously assessed the systems and the current controls work well.
- Scope and initiate the PIA process. Teams need to define the scope of the PIA and figure out which elements will be assessed as part of it. Details might include a specific system or set of systems, processes involved, and data flows from collection through deletion.
- Identify and involve relevant stakeholders. Because the work spans multiple departments and stakeholders, collaboration is crucial for success.Some examples of parties involved include IT teams, human resources, legal, data protection officers, and security agencies.
- Develop tools and questionnaires. Teams should draft a framework that covers privacy, regulations, and specific data.
- Analyze the risks and develop mitigation strategies. Use the questionnaire and framework to assess privacy risks and tangential impacts associated with data processing. Teams need to evaluate the likelihood and severity of all vulnerabilities and threats. Developing mitigation strategies to address risks should follow. All findings can be summarized in a PIA report for key stakeholders to review.
Privacy impact assessment vs. data protection impact assessment
Privacy impact assessments and data protection impact assessments are sometimes used interchangeably; however, there are significant differences between the two and how organizations use them.
Privacy impact assessments help organizations identify, assess, and manage privacy risks and associated effects of using personal data. In contrast, data protection impact assessments (DPIAs) are mandated by the European Union’s GDPR. When a new project that presents a high risk to personal information kicks off, a DPIA is required. DPIAs are necessary for projects that use new technologies, track people’s location and behavior, or process children’s data.
Dive into General Data Protection Regulation (GDPR) compliance.
