Data Governance vs Data Compliance: Nah, They Aren’t The Same!

Updated December 14th, 2023
Data Governance vs Data Compliance

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The main difference between data governance and data compliance is that data governance is an organization-wide framework for managing and organizing data effectively. Meanwhile, data compliance means ensuring that your data practices align with external legal requirements and industry standards for data capture, handling, and use.

Effective data compliance is one of the outcomes of good data governance.

This article looks into the scope of data governance and data compliance to explain the differences and explore how they work in tandem.

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Table of contents #

  1. Data governance vs data compliance: Concepts to understand
  2. Data governance vs data compliance: What matters more?
  3. Data governance and data compliance: So, they aren’t the same?
  4. Data governance vs data compliance: 7 key differences
  5. How does data compliance help with data governance
  6. Summing it all up
  7. Related reads

Data governance vs data compliance: Concepts to understand #

Let’s begin by understanding the fundamentals, starting with data governance.

Understanding data governance: An overview #

Data governance is an organization-wide initiative to ensure that your data is accurate, consistent, available, and secure. As a result, you can promote data enablement and collective accountability for your data assets.

Read more → Getting started with active data governance

The core components of data governance include (but aren’t limited to):

  • Data governance framework
  • Roles and responsibilities
  • Policies and procedures
  • Data cataloging and metadata management
  • Data quality, security, and privacy
  • Regulatory compliance
  • Data integration and interoperability
  • Data stewardship

Read moreData governance key components 101

The role of data compliance: An overview #

Data compliance is adhering to laws, regulations, policies, and standards regarding the collection, storage, processing, and sharing of data. This involves following data practices outlined by regulations such as GDPR, CCPA, HIPAA, etc.

Compliance professionals, especially those with an added ethics responsibility, often seek to communicate compliance as a “commitment to doing the right thing.” - Educause Review

Read moreWhat is data compliance and what are the benefits?

Data compliance can be seen as an outcome of a solid data governance program. Modern data platforms like Atlan help you configure compliance-based access policies at scale for your data and metadata.

Data governance vs data compliance: What matters more? #

Data governance is crucial for ensuring data compliance. On the other hand, data compliance is one of the driving factors behind data governance.

So, what came first? More importantly, what matters more?

Short answer: Both matter. Good governance can reduce data chaos and improve compliance.

For the longer answer, let’s take a detour and understand the origins of data governance.

If we consider the more recent history of data governance, it seems to be an activity undertaken solely to reduce security risks and avoid non-compliance fines.

Data governance is seen as a restrictive, bureaucratic, controlling process — a set of restrictions dropped down from on high to slow down your work. Moreover, data governance initiatives are usually framed around protection and risk — … the risk of violating important regulations.” - Prukalpa Sankar, co-founder at Atlan

However, if we go further back, data governance (which came out of data stewardship) was all about collaboration and democratization. Someone along the road, it ended up becoming a way to impose control. Prukalpa explores the story of data governance in her piece titled ‘Data Governance Has a Serious Branding Problem.’

So, data governance is the overarching approach to make sure that your data is valuable, accessible, useful, and credible. A subset is data compliance.

That’s because the three most common issues with poor data governance, according to Gartner Peer Community Insights from 2022, are:

  1. Compliance audits
  2. Warnings for non-compliance
  3. Data breaches

Top issues with poor data governance in 2022

Top issues with poor data governance in 2022 - Source: Gartner Peer Community.

Moral of the long story: If you implement an effective data governance program (and continuously work on improving it), you can drive data compliance successfully.

Data governance and data compliance: So, they aren’t the same? #

The biggest difference between data governance and data compliance is the scope.

Data compliance refers to a broad set of external rules and regulations that apply to organizations. These rules can vary by region and industry.

Data governance is an internal organizational approach to managing data. Data compliance ensures that your governance approach meets external standards for data handling, privacy, and use.

Data compliance is part of an agile, collaborative data governance program with the right people, processes, and tools in place.

Read more → Data governance and compliance: An act of checks and balances

What about data security and privacy? How are they connected to data compliance? #

Data security and privacy are essential components of a data governance framework:

  • Data security is all about mitigating security risks (unauthorized access, breaches, etc.) by protecting data
  • Data privacy is more about providing individuals with control over their data and PII (personally identifiable information)

Meanwhile, compliance involves adhering to regulations and standards, such as the GDPR in Europe or CCPA in California, for data management. Data security and privacy are vital to ensuring regulatory compliance.

Also, read → Data governance vs data security

Data governance vs data compliance: 7 key differences #

In this segment, we provide a comprehensive comparison of data governance and data compliance in an easy-to-read table.

Data Governance Data Compliance
Definition An internal framework to ensure that your data is accurate, consistent, available, and secure External rules and regulations that govern the collection, storage, processing, and sharing of data
Primary goal Manage, maintain, and use data to create business value Mitigate legal and regulatory risks associated with data
Applicable to Any organization Organizations in a certain country, region, or industry
Components Policies and procedures, data security and privacy, metadata management, etc. Laws regulating data handling, use, and privacy of PII
Activities Establishing data policies, standards, classification and tagging rules, access controls, data integration and interoperability infrastructure, etc. Developing policies and procedures for data use, conducting training programs to raise awareness and promote responsible use of data, etc.
Relation to the other term A good data governance initiative drives data compliance Data compliance influences the development and implementation of data governance programs
Stakeholders involved Data stewards, data owners, compliance officers, and data management teams Data protection officers (DPOs), compliance officers, information security officers, data stewards

How does data compliance help with data governance: A case study from the UK’s financial services industry #

Tide’s background and challenges with data #

Founded in 2016, Tide is a mobile-first financial platform based in the UK that grew to nearly 500,000 customers in eight years.

As a UK-based company, Tide had to be compliant with GDPR. However, compliance for a growing company with a vast data estate was a challenging process.

A key component of GDPR compliance is the right to erasure, more commonly known as the “Right to be forgotten”. It gives Tide’s customers across the European Union and the United Kingdom the right to ask for their personal data to be deleted.” - Hendrik Brackmann, Head of Data Science at Tide

For Tide, the process of erasing data was manual and time-consuming.

Another issue that made this challenge more complex was the unavailability of a shared data glossary. Different stakeholders from Legal or IT would have differing opinions on what constituted PII.

Tide’s priority was to standardize data asset definitions and then automate data compliance.

In an ideal world, when a customer exercised their right to be forgotten, a single click of a button would automatically identify and delete or archive all data about the customer in accordance with GDPR.” - Hendrik Brackmann, Head of Data Science at Tide

How automation saved time, improved data compliance, and impacted Tide’s data governance efforts #

Tide started by appointing Michal Szymanski to act as a bridge between legal and technical teams. Michal worked with the legal team to establish what did or did not constitute personal data.

We had our privacy lawyer on the call when we discussed architecture. He could answer any questions that might come up directly.” Hendrik Brackmann, Head of Data Science at Tide

To make documenting and communicating data definitions effective, Tide decided to use Atlan.

The next step was to automate lineage and then use Atlan’s Playbooks to identify, tag, and classify data at scale.

Atlan’s automated lineage added transparency to Tide’s data estate. Hendrik’s team could now understand where data came from, how it transformed throughout the data pipeline, and where it was ultimately consumed — something they couldn’t do before.

Meanwhile, Playbooks helped Tide organize its data within five hours — a task that would have required 50 days if handled manually. As a result, the company could reallocate the time saved to focus on strengthening its data governance activities.

Read moreTide’s story of GDPR compliance

Summing it all up #

Data governance is an internal proactive approach to data management. It tells you what data you have, where that data is stored, and how can you use it. The goal is to support your business objectives with the right data.

One of the factors driving your data governance initiative is data compliance. It outlines the external rules, laws, regulations, and policies you must follow for data handling and privacy.

Together, a solid data governance program and data compliance can help you with data management, regulatory compliance, and business decision-making.

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