Is it cheaper to outsource privacy compliance than to face a SIC penalty?
Posted: Thu Jan 23, 2025 9:03 am
In a conference room lit by dusk, the CEO, the head of procurement, and the head of the legal team debate intensely. The question in the air is clear: should the company outsource privacy compliance or handle it all in-house ?
CEO: Do we really need to outsource privacy compliance? I am concerned about the cost involved.
Purchasing Manager : I've heard that the penalties for non-compliance can be astronomical. Wouldn't it be riskier and potentially more expensive to take that risk internally?
Legal Team Leader: Additionally, the experience and specialized knowledge that an outside provider can bring can be invaluable. We need to assess not only the cost, but also the value and associated risks.
This dialogue highlights a common job seekers database in many organizations. By breaking down the situation under the framework of Law 1581 and the complementary regulations, together with the pronouncements of the Superintendency of Industry and Commerce (SIC), the dilemma becomes clearer.
Advantages of Outsourcing Compliance
Specialization and Experience : Specialized privacy and data protection service providers bring a high degree of knowledge and experience, constantly updated to reflect changing laws and best practices.
Predictable Costs : Outsourcing turns the expenses associated with regulatory compliance into predictable costs, which can be easier to manage and plan for compared to the variable and potentially unlimited costs of penalties.
Risk Reduction : A third-party provider can help identify and mitigate risks before they become problems, reducing the likelihood of facing penalties.
Disadvantages of Internal Management
Resources and Expertise: Internal compliance management requires significant investments in training and ongoing updating of the legal and IT team, in addition to the possible need to hire additional staff.
Risk of Non-Compliance : Without specialized knowledge, the risk of overlooking critical requirements increases, which could result in severe penalties from the SIC.
Costs: Outsourcing vs. Penalties
Penalties imposed by the SIC for non-compliance with data protection regulations can reach up to 2,000 times the current legal monthly minimum wage. In contrast, the cost of outsourcing compliance varies, but is generally a fraction of what a maximum penalty might be, especially when considering the added benefit of significantly reducing the risk of non-compliance.
Let's imagine, for example, an outsourcing cost of around 1% of the maximum potential cost of a fine. This investment not only avoids the direct outlay of a fine but also ensures a continuous and updated compliance program, avoiding future risks.
CEO: Do we really need to outsource privacy compliance? I am concerned about the cost involved.
Purchasing Manager : I've heard that the penalties for non-compliance can be astronomical. Wouldn't it be riskier and potentially more expensive to take that risk internally?
Legal Team Leader: Additionally, the experience and specialized knowledge that an outside provider can bring can be invaluable. We need to assess not only the cost, but also the value and associated risks.
This dialogue highlights a common job seekers database in many organizations. By breaking down the situation under the framework of Law 1581 and the complementary regulations, together with the pronouncements of the Superintendency of Industry and Commerce (SIC), the dilemma becomes clearer.
Advantages of Outsourcing Compliance
Specialization and Experience : Specialized privacy and data protection service providers bring a high degree of knowledge and experience, constantly updated to reflect changing laws and best practices.
Predictable Costs : Outsourcing turns the expenses associated with regulatory compliance into predictable costs, which can be easier to manage and plan for compared to the variable and potentially unlimited costs of penalties.
Risk Reduction : A third-party provider can help identify and mitigate risks before they become problems, reducing the likelihood of facing penalties.
Disadvantages of Internal Management
Resources and Expertise: Internal compliance management requires significant investments in training and ongoing updating of the legal and IT team, in addition to the possible need to hire additional staff.
Risk of Non-Compliance : Without specialized knowledge, the risk of overlooking critical requirements increases, which could result in severe penalties from the SIC.
Costs: Outsourcing vs. Penalties
Penalties imposed by the SIC for non-compliance with data protection regulations can reach up to 2,000 times the current legal monthly minimum wage. In contrast, the cost of outsourcing compliance varies, but is generally a fraction of what a maximum penalty might be, especially when considering the added benefit of significantly reducing the risk of non-compliance.
Let's imagine, for example, an outsourcing cost of around 1% of the maximum potential cost of a fine. This investment not only avoids the direct outlay of a fine but also ensures a continuous and updated compliance program, avoiding future risks.