DPDPA Audit & Significant Data Fiduciaries

Imagine that a company in India, handling digital personal data, fails to comply with DPDPA rules due to its lack of transparent consent processes. So, unfortunately, they become exposed to legal consequences due to non-compliance and may even have to bear hefty fines of up to 250 Cr.

As an organisation, you want to steer clear of any non-compliance issue and an audit can be a lifesaver. It identifies and rectifies such vulnerabilities and protects the company's reputation and builds customer trust.

To put it simply, an audit is a proactive step to maintain data privacy, identify gaps, mitigate legal risks, and enhance your overall business integrity.

In this blog, we bring you everything you must know about DPDPA audits and significant data fiduciaries so you are on the safe side.

What Is The DPDPA Framework?
The DPDP Act 2023 brings us a comprehensive data protection law that's set to protect and safeguard personal data. It has far-reaching implications for businesses operating in the country.


lh7-us.googleusercontent.com
DPDPA places various responsibilities on organisations that handle personal data to protect individuals' privacy and ensure responsible data management practices. This includes:

Getting free, specific, informed, unconditional, and unambiguous consent from individuals before collecting their personal data
Executing robust security safeguards to protect personal data from unauthorized access, accidental disclosure, acquisition, etc.
Granting individuals access to their data, as well as the right to correct, erase, or restrict its processing
In the unfortunate event of a data breach, organisations are obligated to notify the relevant authorities
It's also important to note that non-compliance with the DPDPA can result in penalties up to 250 cr.

Who Are Significant Data Fiduciaries?
In simple terms, a 'data fiduciary' under the DPDP is someone who, either alone or with others, decides why and how personal data is processed. This can include individuals, companies, associations, the government, or any other entity that controls personal data.


lh7-us.googleusercontent.com
If the Central government identifies a data fiduciary or a group of them, they are called a Significant Data Fiduciary.


lh7-us.googleusercontent.com
Source: Meity

This decision is based on several factors, including:

The volume and sensitivity of personal data processed
Risk to the rights of the Data Principal
Potential impact on the sovereignty and integrity of India
Risk to electoral democracy
Security of the State
Public order.
Additional Duties of Significant Data Fiduciaries
A Significant Data Fiduciary has additional responsibilities on top of Data Fiduciary duties. This includes:

Appointing a Data Protection Officer (DPO) - The DPO will represent the Significant Data Fiduciary under the provisions of the DPDP Act. However, they must be based in India. The DPO must also report to the Board of Directors or a similar governing body and be the point of contact for grievance redressal
Appointing an independent data auditor - The auditor evaluates the entity's compliance with the law
Conducting periodic Data Protection Impact Assessment (DPIA), which evaluates how personal data is processed, risks to individuals' rights, and other relevant details
Undertaking periodic audits to ensure ongoing compliance
Adopting additional measures as prescribed by law
Why Periodic DPDPA Audits Are Necessary?
A DPDPA audit falls under the additional responsibilities of a Significant Data Fiduciary.

It is mandatory for businesses in India to do a thorough DPDPA compliance audit. This audit can find any gaps in compliance and help take corrective measures to make sure they're following the law.

These audits can be incredibly beneficial, and here’s why you need them.

Regular DPDPA audits help you protect individuals' privacy in compliance with the law
It helps identify potential risks and vulnerabilities in data-handling processes
It lets you take proactive measures to mitigate risks before they become serious issues, such as hefty fines of up to 250 Cr
It helps you assess the effectiveness of existing security measures and identify areas for improvement to enhance overall data security. This, in turn, improves customer trust and brand image
It highlights any gaps or deficiencies in the organisation's data protection practices and offers insights into areas that may require additional attention or resources to prevent data breaches
DPDPA audits allow you to adapt to evolving threats and regulatory changes
Who Needs Regular DPDPA Audits?
It's quite simple. Audits are essential for all types of organisations and industries that handle personal data or have regulatory compliance requirements. However, as per the Digital Personal Data Protection Act, it's a mandate for Significant Data Fiduciaries, as discussed above.


lh7-us.googleusercontent.com
This can include schools, colleges, and universities that handle student and staff information or healthcare providers who handle patients' medical records and sensitive health information. Regular audits ensure compliance, identify and address vulnerabilities, and maintain the security and integrity of the data they handle.

DPIAs and Audits: The Right Tool
Source: DPDP Consultants

Significant Data Fiduciaries are required to conduct DPIAs and regular audits. But this has to be done diligently. So, there is a need to automate the process to ensure all bases are covered while maximizing time and efficiency. These tools minimize human bias and produce a standardized report that streamlines the process.

That said, when it comes to DPIAs, you can switch to a Data Protection Impact Assessment Tool. It automates the entire DPIA process and lets you conduct the assessment almost effortlessly through a user-friendly platform.

With this tool, you can track risks that were identified during the assessment and make sure all concerned individuals are kept in the loop regarding the actions taken to mitigate these risks.

Let's make Compliance Easy
As per the DPDP Act, there are certain obligations you must adhere to when it comes to personal data. And, regular DPDPA audits and DPIAs are one of the duties of a Significant Data Fiduciary. DPIAs and audits help identify and rectify any potential breaches and ensure the lawful and secure processing of personal data.

They are almost indispensable for maintaining trust, avoiding penalties, and upholding a commitment to responsible data handling.

DPDP Consultants brings you a set of tools and services that makes compliance with the DPDP Act easy and streamlined:

Our Data Protection Consent Management tool streamlines the acquisition of valid consent and automates the entire process of managing, tracking, and handling consent requests
The Data Principal Grievance Redressal platform streamlines the process of exercising data rights through a user-friendly interface and improves response efficiency in accordance with the DPDP Act
Our Data Protection Impact Assessment tool aids in the easy assessment and tracking of risks and ensures transparent communication about risk mitigation efforts
Our Data Protection Awareness program allows management to oversee the ongoing and efficient execution of their personal data privacy initiatives
Our Contract Reviews and redrafting services ensure that your business's outsourcing agreements align with DPDPA compliance standards
Through our DPDP Data Protection Officer services, organisations can appoint a third party for process audits so it aligns seamlessly with DPDPA requirements
Our training program for employees caters to organisation-specific needs emphasizes the practical aspects of DPDPA compliance and covers personal data policies, processing activities, and more.
Compliance isn't just about following the law; it's also about building trust and keeping your brand's reputation strong. Treating personal data with care isn't just a legal requirement—it's key to making a digital society that's fair for everyone.

Simplify DPDPA Compliance And Optimise Your Operations!
DPDP Consultants offers comprehensive solutions for personal data privacy and privacy law guidance to ensure compliance.
read more..