Small Business ᛫ Article ᛫ 4 Minute Read ᛫ Epson ᛫ May 1, 2018

Leverage Digital Document Management to Get a Handle on Regulatory Requirements

Small and mid-sized businesses, both private and public, can be as susceptible to various regulatory requirements and industry standards as their larger competitors. That includes adhering to directives that they may mistakenly believe don’t affect them, such as the European Union’s General Data Protection Regulation (GDPR). That mandate’s reach is broader than many realize, impacting even organizations that lack a physical presence on that continent.

Electronic document management systems can help companies deal with meeting such critical rules, enabling the organization, accessibility, searchability, security, and workflow management (among other actions) of digital records and the processes related to them. It’s clear that companies are realizing the importance of placing a higher priority on document management, too. The market is on a strong growth path: MarketsandMarkets forecasts that it will be worth close to $6.8 billion in five years, with the small and medium enterprise sector having a significant impact on the upward trend. Experts also report that industries such as healthcare that deal with regulatory demands around patient data recording will propel electronic document management growth, as will verticals including business, financial services and insurance (BFSI), commercial, and legal.

The bottom line is that document management solutions – which can work in conjunction with scanners that convert paper documents to digital formats – provide the means not only to streamline business operations and reduce costs, but also to enhance the ability to audit, manage, and track compliance . Read on for an example of how this electronic filing cabinet technology will support SMBs’ ability to  manage three key regulations as digital content becomes the norm: 

General Data Protection Regulation (GDPR): GDPR, which goes into effect in May of this year, is changing the game when it comes to handling the personally identifiable information (PII) of EU citizens. A business does not have to be headquartered in the EU or have a single operation on the European continent to be liable to GDPR requirements. It need only conduct business with EU citizens – think of a U.S.-based e-commerce site – and collect their PII as part of normal operations, determining how it will process it and for what purposes. Under GDPR’s data subjects’ rights, these “data controllers” must, upon request: provide consumers a copy of their processed personal data; speedily rectify inaccurate personal data; quickly erase such data (assuming there is no legal requirement to maintain it); and transmit that data to another party in a structured, commonly used and machine-readable format. Similarly, any entity that such a business contracts with to process PII on its behalf must respect that business’ obligations and requests as they relate to GDPR PII compliance and audits.

Also included in the regulation is the mandate to use appropriate technical and organizational measures to support data protection by design.

Document management software can help SMBs support the GDPR data subjects’ rights requirements in various ways. That includes identification and classification of GDPR-sensitive information in documents, and definition of document retention and destruction policies so that targeted data in relevant documents can be easily and quickly discovered from a centralized folder and completely deleted when required. Exporting personal data details in common file formats such as .csv or .xml helps satisfy GDPR’s data portability requirements, too. DMS capabilities that support management of document access privileges and data minimization and pseudonymization principles can help businesses build in data protection as the default, too.  

Health Insurance Portability and Accountability Act (HIPAA). HIPAA’s roots go back to 1996, but violations related to protected health information (PHI) aren’t a thing of the past yet. Over $19 million in fines were issued just last year, for example, a sum that includes patient health data infractions. So, it’s important that all parties subject to the regulation do their best to avert trouble. That includes not only healthcare providers, big and small, but entities such as business associates that provide services to them (insurance agents, lawyers, accountants and so on) and large organizations that offer benefits like an Employee Assistance Program (EAP).

A DMS can be critical to that goal, fostering adherence to the technical demands of HIPAA’s Security rule, which encompass data access control, and physical and administrative safeguards.

With support for encryption of data in transit and at rest, role-based access control set by system administrators, strong user identity authentication, and automatic logoff after a period of inactivity, all relevant entities in the healthcare chain can bolster data confidentiality, for example. Systems that implement additional protections, including digital signature authentications to ensure the veracity of electronic communications and checksums to attest to the fact that data has not been modified while in storage or during transmission, support maintaining the data integrity that HIPAA demands. The option of off-site backup of data to a secured database server in a remote data center or the cloud promotes physical safeguards while at the same time maintaining data availability in the event of accidents, emergencies or malicious activities.

Sarbanes-Oxley Act (SOX). Smaller public companies often have felt that SOX, created to improve the accuracy of corporate disclosures and protect investors from fraudulent accounting activities, hasn’t been kind to them. Their resources are more limited than large global enterprises, so they’ve struggled with the costs and labor drain of ensuring compliance with some of its internal control procedures over financial reporting validations. Still, according to EY, Section 404 and the rest of SOX has brought benefits “including decreased severity of financial restatements and increased investor confidence.” 

Legislative acts have tried to tackle some of the regulatory cost issues smaller organizations face, but it can also be to these companies’ benefit to employ DMS technologies to streamline their efforts overall. These solutions can provide a way to help ensure the accuracy, completeness and unaltered status of electronic financial records and statements. 

For example, by employing role-based user permissions, administrators can keep unauthorized parties from accidentally or willfully altering these critical documents. Workflows can be implemented so that only authorized documents can be routed through the business process, further protecting financial data from the risk of corruption. Administrators also may be able to tap into access histories to ensure that their document security strategies for financial reporting compliance aren’t going awry.

A final word of advice to SMBs: In order to enjoy the greatest efficiency when it comes to adding scanned documents to their systems in support of compliance efforts, it’s helpful to choose a scanner whose document management capture software seamlessly integrates with the majority of DMS and cloud services. That versatility and flexibility opens the door to choosing the DMS technology that is best suited for their specific requirements.

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