Building GDPR-Compliant Software
Explore the essential steps and requirements for developing software applications that meet stringent data protection standards, crucial for businesses operating globally.
In today's technology-driven world, businesses and their valuable assets are increasingly vulnerable to data breaches and cyber threats. To address these data privacy concerns and safeguard critical business assets, various regulations and compliances have been established globally. The General Data Protection Regulation (GDPR) is a key regulation designed to protect the personal information of individuals in the EU. Failure to comply with GDPR can result in significant penalties, potentially reaching millions of Euros or a percentage of a company’s global turnover.
Consequently, developing software that complies with GDPR has become a crucial topic for businesses, influencing how they handle user data and protecting them from potential fines. If your company utilizes any type of application or software solution, ensuring its GDPR compliance is vital for building consumer trust, protecting your reputation, and avoiding substantial penalties.
But how can you meet the requirements for GDPR-compliant software? This article highlights best practices for developing software that adheres to GDPR.
What is GDPR and Why is Compliance Important for Businesses?
GDPR is a comprehensive data protection and privacy law implemented by the European Union (EU) in May 2018. While its primary focus is on protecting the data privacy of EU citizens, it impacts businesses worldwide. Regardless of your business domain, location, or the software solutions you use, if your business collects and processes data of EU citizens, your software must comply with GDPR requirements. Therefore, when developing a software solution for your business, you must ensure it aligns with the technical requirements of GDPR to protect the data and privacy rights of EU citizens.
If you are still uncertain about the importance of GDPR software compliance for your business, consider the following questions:
- Do EU citizens use your software?
- Do you collect personal information for product delivery?
- Do you collect user emails and login credentials?
- Do you rely on any third-party services that process user data?
If the answer to any of these questions is "Yes," you must fulfill GDPR compliance requirements. Remember, under GDPR, any data considered personal (including names, emails, addresses, contact numbers, and even physical characteristics) needs to be protected.
Key Requirements for Developing GDPR-Compliant Software
Focusing on robust data privacy and security throughout every phase of the software development lifecycle is essential for building a solution that aligns with GDPR software compliance. Here is a checklist of essential requirements for GDPR-compliant software:
Technical Compliance
Begin by conducting thorough research to understand the key principles of GDPR software requirements, including lawful processing, data subject rights, user consent, data minimization, purpose limitation, and accountability. Ensure that your software development team and staff are knowledgeable about these technical requirements.
Data Mapping and Classification
Building a detailed data inventory is essential for implementing GDPR in software solutions. This inventory should include data sources, data flow diagrams, and retention policies. It will help you understand how data moves within your software and external systems, which is a critical aspect of GDPR compliance. Also, conduct a thorough data mapping exercise to identify and classify the types of personal data your software processes. Document the data based on sensitivity and relevance to the intended purpose. You should only collect personal data that are strictly indispensable for the intended purposes. Avoid gathering irrelevant or excessive information for prolonged periods.
"Data is a liability, not an asset." - Bart Willemsen
User Consent Mechanism
Your software should be designed to ensure users are aware of the storage, utilization, or transmission of their personal data before accessing services. Consent should be essential and explicit before installing and using the app. Users must be asked to give their consent regarding the collection and processing of their personal data. Avoid using pre-ticked consent boxes; users should actively indicate their agreement to data collection. Additionally, you must provide users with the ability to withdraw consent easily.
Data Subject Rights
Implement mechanisms to facilitate data subject rights, including the right to access, edit, erase, restrict processing, and data portability. Ensure that your software allows users to exercise these rights without any difficulty.
Third-Party Services Management
If your software relies on third-party services or vendors, ensure that they also comply with GDPR regulations. Establish contractual agreements that include data protection clauses and perform due diligence on the security practices of your third-party service providers.
Privacy by Design and by Default
GDPR software compliance clearly states the importance of implementing privacy considerations into the design and development of your software from the outset. This means your software must implement privacy by design principles and provide users with a default privacy setting to ensure the highest level of security and privacy.
Data Security Measures
Implement essential security measures to protect personal data from unauthorized access, disclosure, alteration, and destruction. This includes encryption (details in the below section), access controls, regular security audits, and the use of secure coding practices. Furthermore, you must update your security protocols to address new vulnerabilities and potential threats.
Data Encryption
Data encryption is an effective measure for ensuring the privacy and protection of personal data. This technique adds a higher layer of security to personal information that unauthorized parties cannot easily decode. According to a relevant article of GDPR, all personal data should be protected by "state-of-the-art" measures.
In a notable incident in 2015, a data breach of an online service resulted in the compromise of users' data. The information, including names, addresses, emails, etc., was stored in a format that allowed for easy access. This data breach had significant negative consequences for the individuals involved and resulted in a substantial financial settlement for the company. According to data protection experts, end-to-end encryption is a highly effective technique for reducing the risk of a potential data breach.
Data Breach Notification
Immediate data breach notification is one of the most essential GDPR software requirements. According to a relevant GDPR article, both data protection authorities and affected individuals should be reported about data breaches within 72 hours of the incident. Thus, you must create a data breach response plan that specifies the steps to be taken in the event of a data breach. This includes incident detection, containment, recuperation, and communication procedures.
Cookie Collection Policy
Cookie collection notices play a vital role in adhering to GDPR compliance, as they empower users to make informed decisions about the data they are willing to share. Thus, businesses should implement a clear and concise cookie collection policy to inform users about the types of cookies used, their purposes, and how users can manage their cookie preferences. Obtain users’ consent for non-essential cookies and ensure that users can opt-out easily.
Here’s an example of a cookie notice that explains how a company uses cookie data:
A message is displayed to the user stating: "We use cookies to improve your browsing experience and analyze site traffic. By clicking 'Accept All,' you consent to our use of cookies. You can customize your preferences by clicking 'Manage Preferences.'"
Data Protection Impact Assessments (DPIAs)
GDPR mandates organizations to conduct DPIAs for processing activities that are likely to result in high risks to individuals’ rights and freedoms. This assessment helps identify and mitigate potential privacy risks. DPIAs should be regularly reviewed to ensure ongoing compliance with GDPR technical requirements.
Cross-Border Data Transfers
GDPR restricts the transfer of personal data to nations outside the European Economic Area (EEA) unless certain conditions are met. Thus, if your software requires the international transfer of personal data, it must align with the GDPR technical requirements for cross-border data transfers. Verify whether the destination country has an adequate level of data protection policy and if not, implement appropriate protection, such as Standard Contractual Clauses (SCCs), Binding Corporate Rules (BCRs), or rely on approved codes of conduct or certification mechanisms. Clearly communicate these measures to users and ensure they can access information regarding cross-border data transfers.
Avoid Security Questions
Asking security questions based on personal information is discouraged for GDPR software compliance, as such questions can potentially expose users’ sensitive information to misuse. Thus, you must not rely on security questions that involve personal information related to users’ families, preferences, homes, etc. The best option is to explore multi-factor authentication, biometric techniques, and other alternative methods for user authentication and account recovery. Such systems will enhance the security of user accounts and minimize the use of easily guessable information. If implementing such methods is not feasible for your business, allow your users to form their own secret questions and warn them against revealing personal details.
Right to Portability
The GDPR grants users the right to receive their personal data in a machine-readable, structured, and commonly used format. Thus, your software development should facilitate the export of user data in commonly used formats (e.g., CSV, XML), enabling users to easily obtain, reuse, and transfer their data to other services or platforms as and when required. This ensures compliance with the right to data portability.
Right to Be Forgotten
Users have the right to request the removal of their personal data when it is no longer necessary for the purpose for which it was collected or processed. Incorporate features in your software that allow users to exercise their right to be forgotten, ensuring that their data is permanently and securely deleted from your system as well as from any third parties with whom the data may have been shared.
Data Removal from Payment Gateways
If your business uses payment gateways, ensure that personal data is processed securely and is not stored longer than necessary. Implement best practices that allow for the timely removal of personal data from payment gateways once transactions are completed. This minimizes the risk of unnecessary data exposure and aligns with data minimization principles. This is indeed an indispensable practice when developing applications that handle transactions.
Software Testing for GDPR Compliance
Software testing for quality assurance is an essential step of the GDPR-compliant software development process. To make sure your product aligns with GDPR software compliance, you can add a GDPR compliance checklist to your general software testing process. Remember to conduct testing in a GDPR-compliant way, ensuring that no user data is exposed to unauthorized individuals, including developers, QA specialists, and even business owners. To reduce the risks of data leaks, you can refrain from using genuine personal data during software testing. Instead, you can use a masked version of synthetic data, actual data, or a combination of both.
Regular Audits and Updates
Conduct regular audits and security updates to ensure ongoing compliance with GDPR technical requirements. Stay abreast with any changes in regulations and update your digital products accordingly to steer clear of data theft and avoid any penalties of GDPR. Also, whenever you make an update to your privacy policy, all your users should be instantly informed about the changes.
There are many smaller yet essential regulations of GDPR compliance, such as adherence to secure communication protocols, visibility to Terms and Conditions, and so on. Thus, working with an experienced and knowledgeable software development service provider is essential. A comprehensive check ensures a secure GDPR-compliant custom software development process.
Steps to Build a GDPR-Compliant Software
Listed below are the essential steps in developing GDPR-compliant software. From initial requirements analysis to secure deployment, each phase is crucial for ensuring data protection and regulatory adherence.
Requirements Analysis
The first and foremost step is to gather and analyze the requirements for the software, ensuring alignment with GDPR principles. At this stage, you need to identify the types of personal data and the lawful bases for processing.
Architecture Planning
The next step is to plan a secure software architecture, incorporating features to protect personal data. This is the stage to implement robust security measures like encryption, access controls, and data minimization.
UI/UX Design
This is one of the most integral steps in building GDPR-compliant software where experts design the intuitive UI/UX to align with GDPR requirements, ensuring transparency and clarity regarding data processing activities and user consent.
Software Development
This is the step to bring your software architecture idea to life. At this stage, developers use secure coding practices for software development, ensuring adherence to GDPR principles and preventing security vulnerabilities.
Testing and Quality Assurance
Now, it is time to conduct penetration testing to identify and address any security weaknesses or vulnerabilities in the software. Test for potential data leaks, unauthorized access points, and compliance with GDPR requirements.
Software Deployment
After thorough testing and iteration, the software is ready to launch in the market for end users. Deploy the software in a manner that ensures GDPR compliance, including proper configuration of data storage, access controls, and user permissions.
Challenges to Implement GDPR Compliance
Implementing GDPR compliance can present various challenges for organizations. Here are some most critical challenges and their potential solutions:
Lack of Awareness and Resources
Challenge: Many organizations struggle with lack of awareness and understanding of GDPR requirements. Also, they don’t have the skilled resources to develop GDPR-compliant software and maintain their ongoing compliance with the regulation.
Solution: Conduct regular training sessions for employees to educate them about GDPR principles, requirements, and their roles in compliance. Keep staff members informed about updates and changes in data protection regulations. You can also opt for ongoing maintenance services to ensure ongoing compliance with GDPR requirements.
Data in Paper-Based Documents
Challenge: Paper-based documents, such as personnel files, contracts, etc., are still widely used. The presence of sensitive personal information in paper-based documents poses a challenge as it requires additional measures to secure and manage physical records. Paper documents may be more susceptible to unauthorized access, loss, or damage compared to digital formats, raising concerns about data protection and privacy.
Solution: Addressing data in paper-based documents requires organizations to digitize and secure physical records. Implement strict access controls, logging mechanisms, and encryption for any digitized documents containing personal data. Develop clear policies on the secure disposal of physical documents and promote a culture of secure data handling.
Insecure Practices of Document Exchange
Challenge: Insecure practices during document exchange, such as the use of unencrypted email attachments or reliance on non-secure file-sharing platforms, pose a significant risk to the confidentiality and integrity of personal data. This challenge can result in unauthorized access, interception, or data leakage during transmission, potentially leading to compromising individuals’ privacy and non-compliance with GDPR requirements.
Solution: Addressing this challenge requires the implementation of secure communication channels, encryption, and comprehensive user training on best practices for document exchange. You can also consider leveraging the benefits of secure network connections for faster and safer data sharing.
Cost to Develop GDPR-Compliant Software
The cost of developing GDPR-compliant software can vary widely based on several factors. For instance, the complexity of the software, the volume and sensitivity of personal data it handles, the location of software developers, the intricacy of UI/UX design, and the existing state of compliance measures within the organization all influence the final cost.
Developing GDPR-compliant software involves upfront expenses for implementing privacy by design, implementing user-friendly features, and integrating robust security measures. Also, there are ongoing costs for regular audits, updates to ensure compliance with evolving regulations, and software maintenance to fix any bugs or glitches. On average, the overall cost for GDPR compliance software development can range significantly, depending on your unique project requirements. While the cost to build GDPR-compliant software may seem significant, it is a considerable investment for steering clear of potential legal penalties and reputational damage as well as protecting individuals’ privacy rights.
Partnering for GDPR Compliance
GDPR compliance is essential, but implementing it alone can be a complex and expensive process. However, partnering with experienced technology firms can help navigate the complexities associated with GDPR implementation and software development. Such firms have proven expertise in software development, assisting businesses in achieving GDPR compliance quickly and efficiently. Their teams of tech experts can help build state-of-the-art digital products, deploy robust security measures across the organization, detect entity-level threats, prevent potential cyber attacks, and achieve various regulatory compliances. For instance, a technology firm partnered with a leading enterprise to develop custom software solutions that adhere to GDPR standards and precisely cater to the client’s requirements. Embarking on a GDPR compliance software development journey with experienced partners can help businesses focus on scaling without worrying about facing any legal penalties.
FAQs
Q. How to implement GDPR compliance?
A. Implementing GDPR compliance involves a systematic approach to ensure the lawful processing of personal data and the protection of users’ privacy. Key steps to implement GDPR include:
- Understand GDPR technical requirements
- Conduct data mapping and classification
- Implement data minimization measures
- Establish a user consent mechanism
- Ensure data subject rights compliance
- Manage third-party services effectively
- Incorporate privacy by design and by default
- Enforce robust data security measures
- Implement data encryption practices
- Establish data breach response protocols
- Develop a cookie collection policy
- Conduct data protection impact assessments (DPIAs)
- Manage cross-border data transfer appropriately
- Enhance security beyond simple questions
- Facilitate the right to portability implementation
- Enforce the right to be forgotten
- Securely handle data from payment gateways
- Conduct thorough software testing for GDPR compliance
- Perform regular audits and ensure updates
To understand these vital steps in-depth, please refer to the above blog. And if you want professional assistance to implement these steps in your business software, consider consulting with technology experts.
Q. What are the essential steps to develop GDPR-compliant software?
A. The blog outlines the essential regulations of GDPR software compliance. Here are a few important steps to develop GDPR-compliant software:
- Start with a solid and well-defined business idea
- Partner with an experienced software development company
- Create an intuitive UI/UX design
- Develop a minimum viable product (MVP) for your digital product
- Test your product against performance and GDPR compliance
- Deploy your product to the targeted platforms
Q. How much time does it take to build GDPR compliant-software?
A. The time required to build GDPR-compliant software varies depending on multiple factors, including the complexity of the software, the volume and sensitivity of personal data it handles, the existing data protection measures in place, and the expertise of the software development company. Typically, the development process for basic software can last a few months. At the same time, a more complex product with advanced functionalities and data security measures can take a year or more to ensure comprehensive GDPR compliance.