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NEW QUESTION 25
FILL BLANK
RCI and PCM
In April 2011, the rules were issued under Section 43A of the IT Act by the Government of India and the
‘body corporates’ were required to comply with these rules. The Corporate legal team tried to understand and interpret the rules but struggled to understand its applicability esp. to client relationships and business functions. So, the company hired an IT Act legal expert to advise them on the Section 43A rules.
To start with, the company identified the PI dealt with by business functions as part of the earlier visibility exercise, but it wanted to reassure itself. Therefore, a specific exercise was conducted to revisit ‘sensitive personal information’ dealt by business functions. It was realized that the company collects lot of SPI of its employees and therefore ‘reasonable security practices’ need to be adhered to by the functions that deal with SPI. It was also ascertained that many of this SPI is being dealt by third parties, some of which are also located outside India. To meet the requirements of the rules, the company reviewed all the contracts and inserted a clause – ‘the service provider shall implement reasonable security practices and procedures as per the IT (Amendment) Act, 2008’. Some of the large service providers were ISO 27001 certified and they claimed that they fulfill the requirements of ‘reasonable security practices’. However, some SME service providers did not understand what would ‘reasonable security practices’ imply and requested the company to clarify, which referred them to Rule 8 of the Section 43A. Some small scale service providers expressed their unwillingness to get ISO certified, given the costs involved.
(Note: Candidates are requested to make and state assumptions wherever appropriate to reach a definitive conclusion) Introduction and Background XYZ is a major India based IT and Business Process Management (BPM) service provider listed at BSE and NSE. It has more than 1.5 lakh employees operating in 100 offices across 30 countries. It serves more than 500 clients across industry verticals – BFSI, Retail, Government, Healthcare, Telecom among others in Americas, Europe, Asia-Pacific, Middle East and Africa. The company provides IT services including application development and maintenance, IT Infrastructure management, consulting, among others. It also offers IT products mainly for its BFSI customers.
The company is witnessing phenomenal growth in the BPM services over last few years including Finance & Accounting including credit card processing, Payroll processing, Customer support, Legal Process Outsourcing, among others and has rolled out platform based services. Most of the company’s revenue comes from the US from the BFSI sector. In order to diversify its portfolio, the company is looking to expand its operations in Europe. India, too has attracted company’s attention given the phenomenal increase in domestic IT spend esp. by the government through various large scale IT projects. The company is also very aggressive in the cloud and mobility space, with a strong focus on delivery of cloud services. When it comes to expanding operations in Europe, company is facing difficulties in realizing the full potential of the market because of privacy related concerns of the clients arising from the stringent regulatory requirements based on EU General Data Protection Regulation (EU GDPR).
To get better access to this market, the company decided to invest in privacy, so that it is able to provide increased assurance to potential clients in the EU and this will also benefit its US operations because privacy concerns are also on rise in the US. It will also help company leverage outsourcing opportunities in the Healthcare sector in the US which would involve protection of sensitive medical records of the US citizens.
The company believes that privacy will also be a key differentiator in the cloud business going forward. In short, privacy was taken up as a strategic initiative in the company in early 2011.
Since XYZ had an internal consulting arm, it assigned the responsibility of designing and implementing an enterprise wide privacy program to the consulting arm. The consulting arm had very good expertise in information security consulting but had limited expertise in the privacy domain. The project was to be driven by CIO’s office, in close consultation with the Corporate Information Security and Legal functions.
Did the company take sufficient steps to protect SPI dealt by its service providers and ensure that it complies with the regulatory requirements? Was referring to ‘reasonable security practices’ sufficient in the contracts or the company should have also considered some other measures for privacy protection as well? (250 to 500 words)
Answer:
Explanation:
The consulting arm of XYZ developed a comprehensive privacy program in line with the company’s goal to leverage its existing technology infrastructure, resources and capabilities for protecting data. The program had three parts – awareness and training, policy development and implementation. On the awareness front, extensive training was conducted for employees on various aspects of privacy including GDPR compliance.
This was followed by the development and rollout of an enterprise-wide privacy policy which clearly defined the various steps to be taken to protect sensitive personal information (SPI) such as encryption, access controls etc. After this, customer contracts were reviewed for appropriate protection clauses and service providers were made to sign ‘reasonable security practices’ clauses in their contractual obligations as specified in EU GDPR.
At first glance, it seemed that XYZ had taken adequate steps to protect SPI dealt by its service providers and ensure that it complies with the regulatory requirements. However, on careful scrutiny, there were some lacunae in the program. For instance, as per EU GDPR, personal data must be pseudonymized or encrypted prior to transfer from one entity to another. In this case, though encryption was mentioned in the policy documents but there were no specific measures given for ensuring proper encryption of data before any transfer. Similarly, ‘reasonable security practices’ clause was included in customer contracts but there was no mention of any tools like firewalls or other means of protecting sensitive information which could have further strengthened the privacy protection efforts made by the company.
Thus, it is clear that XYZ did made some efforts to comply with the EU GDPR but in order to ensure full compliance, more specific measures should have been taken and all contractual obligations must be such that they clearly define the security and privacy controls that need to be put in place between customer/client and service provider. This would further give customers greater assurance of privacy protection from XYZ’s services. Going forward, XYZ can consider investing in more advanced technologies like biometrics authentication etc for maximum security of data. Furthermore, the company should also ensure periodic reviews of its policy documents and contracts so as to ensure better protection of sensitive personal information.
Overall, though XYZ took some reasonable steps to protect SPI of its customers, it should have done more by introducing advanced security measures and including stringent contractual obligations for service providers.
This would have enabled the company to achieve full compliance with EU GDPR and ensure greater security of customer’s personal data.
NEW QUESTION 26
Which of the following is not an objective of POR?
- A. Create an inventory of business processes, enterprise and operational functions, client relationships that deal with personal information
- B. Identify all the activities, functions and operations that can be attributed to the privacy initiatives of an organization
- C. Establish a privacy function to address the activities, functions and operations that are required to manage the privacy initiatives
- D. Evaluate the role of corporate function in legal compliance management, its relations with IT, and security functions. Evaluate the role of legal function in compliance matters
Answer: D
NEW QUESTION 27
From the following list, identify the technology aspects that are specially designed for upholding privacy:
I) Data minimization
II) Intrusion prevention system
III) Data scrambling
IV) Data loss prevention
V) Data portability
VI) Data obfuscation
VII) Data encryption
VIII) Data mirroring
- A. Only I, III, IV, VI and VII
- B. Only I, II, III, VII and VIII
- C. Only I, III, V, VII and VIII
- D. Only II, V, VI, VII and VIII
Answer: A
NEW QUESTION 28
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