07/11/2020 5 Comments

Software Regulatory Compliances for Businesses simplified.

What are Software Regulatory Compliances?

Generally, the word “compliance” denotes adhering to a protocol, such as a policy, specification, law, or standard. “Regulatory compliances” are the goals that organizations aim to achieve in order to ensure that they are aware of and are taking required actions that conform to relevant policies, regulations, and laws. Due to a need for operational transparency and an increasing number of regulations, organizations are more actively adopting the use of harmonized and consolidated sets of compliance protocols. It is done to ensure that all required federal requirements can be met without the unnecessary rework or duplication of activity from the resources.

Why regulatory compliances have become important for businesses to sustain?

Also, Read Wachanga’s Path to overnight success & How Niche start-ups scale up globally.

Meeting regulatory compliance requirements is of utmost importance for businesses in all sectors, be it Finance, Food, and Beverages, Healthcare, etc. By complying with required standards set out by regulatory watchdogs; an organization gains the following benefits:

Eliminates Risk: Risk elimination is the core purpose of regulatory compliance, and henceforth is integrated into the core of all of its processes. Regulatory Agencies spell out guidelines on how to identify, mitigate, or eliminate the risk. These processes suggested by the regulatory bodies act as direct reference points for organizations that happen to provide the relevant service.

Enhances Investor as well as customer’s confidence: The surest way to safeguard and guarantee a product’s efficacy and efficiency is complying with the industry-specific regulatory norms. When an organization clears these litmus tests set by regulatory watchdogs, they inspire confidence within their investors and customers alike for their products or services.

Eliminating the risk of Penalty-Costs: Throughout the lifecycle of a product, many high costs are linked with ensuring compliance with protocols, and when the cost of non-compliances are added into it, it creates a financial conjuncture for the company because, in later stages, it’s practically impossible to abandon the work in such late stage because it will render their previous work unimportant. And redesigning their product or service in order to clear the regulatory compliances and pay additional penalty often tend to burn a deep hole in the company’s fortunes.

Types of Regulatory Compliances in various Industries.

Usually, regulations and accrediting organizations differ among various industries, for example, PCI-DSS and GLBA for the financial industry, HACCP for the food and beverage industry, HIPPA in healthcare, and GDPR which requires all the organizations operating European Union(EU) or European Economic Area(EEA) to have their controllers and processors to ensure and implement all the necessary technical and organizational measures to safeguard the data privacy of the personal data entrusted to them by their users with EU territory.

Let’s see what these Regulatory compliances are all about here in detailed manner :

  1.  (Payment Card Industry Data Security Standard (PCI DSS) :
    PCI DSS is an information security standard for organizations that handle major credit/debit card details of their customers.

The PCI standard is mandated by the card companies(say banks!) but are administered by Payment Card Industry Security Standards Council. The standard was created to increase controls around cardholder data to reduce credit/debit card related frauds.

Validation of these protocols are usually performed periodically by a method which is decided based on the volume of transactions happening which are as follows:

  1. Self-Assesment Questionnaire(SAQ) for smaller volume of transactions.
  2. External Qualified Security Assessor(QSA) for moderate volume of transactions.
  3. Firm-specific Internal Security Assessor(ISA) for high number of transactions, it involves a report on compliances.

Although PCI DSS must be implemented by all the organizations that store, process or transmit cardholder data, some entities are exempted from the formal validation. Currently both VISA and Mastercard require their merchants and service providers to be formally validated according to PCI DSS.
Issuing banks however are not required to go through PCI DSS validation but they still have to secure the sensitive data in PCI DSS compliant manner. In an event of any security breach, the compromised organization which was not PCI DSS compliant have to incur additional card scheme penalties and lawsuits.

  • Federal Information Security Management Act (FISMA):

The Federal Information Security Management Act is a United States federal law enacted in 2002. Under this act, the importance of information security to the national security interests of United States was recognized.
FISMA requires each federal organization to document, develop and implement an overarching program to enhance information security of information systems of agency that support the operations and asset of agency, including the data provided by a third party agency, contractor or any other source.
FISMA explicitly emphasises on “Risk-based policy for cost-effective security.” and has brought attention within the federal government to cyber security.

Under FISMA, agency program officials, chief information officers, and inspector generals(IGs) are mandated to conduct yearly audits of the agency’s information security program and share the results with Office of Management and Budgets (OMB). OMB further analyzes this data to assist in it’s regulatory responsibilities and share this annual report to Congress on organization’s compliance with the act.

  • Hazard Analysis and Critical Control Points (HACCP):

Conceived in 1960 by NASA for monitoring the quality of manufacturing of first food products for their initial manned space flights, HACCP is more of an internationally accepted set of protocol governed and amended by the Food and Agriculture Organization of the United Nations(FAO) and World Health Organization(WHO).

HACCP is a systematic preventive approach to food safety from chemical, biological, physical, and more contemporary radiological hazards in production processes starting from production to packaging.
Many countries including The US and Germany are mandating hazard analysis and risk-based preventive controls in order to strengthen their Public Health Security and their Bio-contamination preparedness and response-time.
HACCP is being increasingly adopted by industries other than food and beverages such as cosmetics and pharmaceuticals because of its positive impacts on product security and user-confidence.

  • Health Insurance Portability and Accountability Act (HIPPA):

HIPPA is one of US federal regulatory compliances which was primarily created to modernize the flow of healthcare information, instruct how personally identifiable information maintained by the healthcare and insurance organizations should be protected from fraud and theft, and overcome the limitations on healthcare insurance coverage.

HIPPA is majorly made up of five titles which are as follows:

  1. Title I: Healthcare Access, Portability and Renewability

Title I of HIPPA oversees the availability of breadth of group of health plans and certain individual health policy plans. Title I requires the coverage of and also limits the restrictions that a group health plan can place on benefits of pre-existing conditions. It also requires insurers to issue policies to those leaving the group health plans with creditable coverage exceeding 18 months and renew individual policies for as long as they could be offered or provide alternatives to the discontinued plans for as long as the insurer stays in the market without exclusion regardless of health condition.

  • Title II: Preventing Health Care Fraud and Abuse; Administrative Simplification; Medical Library Reform

Title II of HIPPA establishes procedures and policies for maintaining privacy and security of individually identifiable health information, outlines numerous offenses pertaining to healthcare, and establishes civil and criminal penalties for severe violations.
It has several mechanisms to prevent fraud and abuse within the health-care system.
However, the most important provision of Title II is Administrative Simplification Rules which are as below:

  • Privacy Rule- This rule regulates the use and disclosure of protected health information(PHI) held by covered entities who fit within the definition of business associates, law enforcement officials for law enforcement purposes as required by law and administrative requests.
  • The Transactions and Code Set Rules- This rule is enacted to simplify healthcare transactions by requiring all health plans to engage in healthcare transactions in a standardized way.
  • The Security Rule- This rule compliments The Privacy Rule, The security rule deals specifically with Electronically Protected Health Services (EPHI). It lays out three types of security safeguards for compliance: administrative, physical and technical. For each individual type, the rule identifies various security standards, and for each standard, the rule it names both required and addressable implementation specifications.
  • The Unique Identifiers Rule (National Provider Identifier)- HIPPA covered entities such as provides completing electronic transaction, healthcare clearinghouses, and large health plans are mandated to use only National Provider Identifier to identify the covered healthcare providers in standard transactions. The NPI replaces all other identifiers used by health plans, Medicare, Medicaid, and other government programs. The NPI is unique and is never re-used 10 digit alphanumeric code assigned to each individual entity at the time of transaction.
  • The Enforcement Rule- The Enforcement Rule sets civil money penalties for violating HIPPA rules and establishes procedures for investigations and hearings for HIPPA violations.

       Following are the lists of felonies that fall under Enforcement Rule’s Jurisdiction:

  • ­Misuse and Disclosure of PHI
  • No Protection in place of health information.
  • Patient unable to access their health information.
  • Using or disclosing more than the minimum necessary protected health information.
  • No safeguards of electronic protected health information.

Below are the Most common entities required to take corrective action to be in voluntary compliance according to HIPPA:

  • Private Practises
  • Hospitals
  • Outpatient Facilities
  • Group plans such as insurance groups
  • Pharmacies
  • Title III: Tax-related health provisions governing medical savings accounts.

Title III specifies the amount that may be saved per person in a pre-tax medical savings account. Initially in 1997, medical savings account used to be available to employees covered under employer-sponsored high deductable plan of a small employer and self employed individuals.

  • Title IV: Application and enforcement of group health insurance requirements.

Title IV standardizes the conditions for group health plans regarding coverage of persons with pre-existing conditions, and modifies continuation of coverage requirements. It also clarifies continuation coverage requirements and include COBRA clarification.

  • Title V: Revenue offset governing tax deductions for employers.

Title V clarifies the provisions related to organization-sponsored life insurance for employers providing organization-sponsored life insurance premiums, prohibiting tax deduction on interest on the life insurance loans, company endowments, or contracts related to the company.
It also repeals the financial institution rule to interest allocation rules. And lastly, it amends the provisions of law relating to people who have denounced their US Citizenship or permanent residency, expanding the expatriation tax to be assessed against those deemed to be forfeiting their U.S. status for tax reasons, and making their ex-citizen names as part of public record through creation of the Quarterly publication about individuals who have chosen to expatriate.


In essence, regulatory compliances are the legal as well as moral benchmarks that businesses should overcome in order to boost the credibility of their product and services among their target demographic as well as their current and potential investors. However, it’s not always possible to have an all-encompassing knowledge about legal frameworks that are required to be assessed to be completely market-ready.
To help out businesses and brands with this regard, we at AppVoir ensure that the partners we work with and the clients we work for are completely covered in all aspects and could scale their operations/product in a cohesive and legally compliant manner.
To know more about what Regulatory Bodies your digital business should abide by in order to make your business go digital, drop us a line at our website and we’ll help you out. Till then, stay positive, test negative and be compliant, Ciao!



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