How to Develop a GDPR-Compliant Software for Your Business?

Sudeep Srivastava July 8, 2024
gdpr compliance software Development

Technology has taken the world by storm, exposing businesses and their valuable assets to the increasing risk of data breaches and cyber theft. To address such data privacy concerns and secure business-critical assets from data theft, governing bodies and regulators across the globe have established various regulations and compliances. The General Data Protection Regulation Act (GDPR) is one such essential regulation that aims to protect the personal information of EU citizens. Not adhering to GDPR software compliance can lead to a penalty of up to 20 million Euros or 4% of a company’s global turnover.

GDPR Fines Paid by Companies

Accordingly, GDPR-compliant software development is a hot topic of discussion for businesses, redefining how they handle users’ data and protecting themselves from potential penalties. So, if your company uses any type of application or software solution, it must be GDPR-compliant to win consumer trust, protect reputation, and steer clear of substantial fines.

But how will you fulfill GDPR software requirements? Well, this article highlights the best practices to develop GDPR-compliant software.

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What is GDPR and Why Do Businesses Need to Comply with This Regulation?

GDPR is a widespread data protection and privacy regulation law implemented by the European Union (EU) in May 2018. While the law fundamentally focuses on protecting the data privacy of EU citizens, it affects businesses worldwide.

No matter what domain you deal with, where you operate, or what types of software you rely on, if your business collects and uses the data of EU citizens, your software must comply with GDPR requirements. Thus, when it comes to building a software solution for your business, you must ensure that it aligns with the GDPR technical requirements to protect EU citizens’ data and privacy rights.

If you are still unsure about the Importance of GDPR software compliance for your business, answer the following four questions:

  1. Do EU citizens use your software?
  2. Do you collect personal information for product shipping?
  3. Do you collect user emails and login credentials?
  4. Do you rely on any third-party services that process user data?

If the answer to any of these questions is “Yes,” you must fulfill GDPR compliance requirements. Remember, as per the GDPR law, any data (users’ names, emails, addresses, contact numbers, and even eye color) is considered personal and needs to be protected.

 GDPR software compliance for your business

Key Requirements to Develop GDPR-Compliant Software

Carefully focusing on robust data privacy and security at every phase of the software development lifecycle (SDLC) is crucial to building a solution that aligns with GDPR software compliance. Here, we have outlined the essential checklist to fulfill GDPR software requirements:

How to Build a GDPR-Compliant Software

GDPR Technical Requirements

Start by conducting thorough research to comprehend the key principles of GDPR software requirements, including lawful processing, data subject rights, user consent, data minimization, purpose limitation, and accountability. Make sure that your GDPR compliance software development team and in-house staff are abreast of these technical requirements.

Data Mapping and Classification

Building a detailed data inventory is essential to implementing GDPR in software solutions. This inventory should include data sources, data flow diagrams, and retention policies. It will help you comprehend how data moves within your software and external systems, which is an essential aspect of GDPR compliance.

Data Minimization

Also, conduct a thorough data mapping exercise to identify and classify the types of personal data your software processes. Document the data based on sensitivity and relevance to the intended purpose. You should only collect personal data that are strictly indispensable for the intended purposes. Avoid gathering irrelevant or excessive information for prolonged periods.

 Quote on data processing by Bart Willemsen

User Consent Mechanism

Your software should be structured in a way that ensures users are aware of the storage, utilization, or transmission of their personal data before accessing the services. Consent should be essential and explicit before installing and using the app. Users must be asked to give their consent regarding the collection and processing of their personal data. Avoid giving pre-ticked consent boxes; users should know that they agree to data collection. Also, you must provide users with the ability to withdraw consent easily.

Pre-ticked consent boxes are prohibited by the GDPR Compliance

Data Subject Rights

Implement mechanisms to facilitate data subject rights, including the right to access, edit, erase, restrict processing, and data portability. Ensure that your software allows users to exercise these rights without any difficulty.

Third-Party Services Management

If your software relies on third-party services or vendors, ensure that they also comply with the regulation of GDPR compliance. Establish contractual agreements that include data protection clauses and perform due diligence on the security practices of your third-party service providers.

Privacy by Design and by Default

GDPR software compliance clearly states the importance of implementing privacy considerations into the design and development of your software from the outset. It simply means that your software must implement privacy by design principles and provide users with a default privacy setting to ensure the highest level of security and privacy.

Data Security Measures

Implement essential security measures to protect personal data from unauthorized access, disclosure, alteration, and destruction. It includes encryption (details in the below section), access controls, regular security audits, and the use of secure coding practices. Furthermore, you must update your security protocols to address new vulnerabilities and potential threats.

Data Encryption

Data encryption is an effective measure for ensuring the privacy and protection of personal data. Thai technique adds a higher layer of security to the personal information that hackers can’t easily decode to access. According to article 32 of GDPR, all personal data is protected by “state-of-the-art” measures.

In July 2015, cyber criminals attacked Ashley Madison (adultery dating website) and hacked over 25 GB of users’ data. The information, including names, addresses, emails, etc., was stored as plain text, which gave hackers an open invitation to steal the data. This data breach resulted in a wave of ruined careers, blackmailing, suicide, divorce, and broken relationships. The website owners had to pay $11+ million to settle ensuing lawsuits.

According to the Data Protection Officer (DPO) and other experts, end-to-end encryption is the best technique for reducing the risk of a possible data breach.

Data Breach Notification

Immediate data breach notification is one of the most essential GDPR software requirements. According to GDPR Article 33, both data protection authorities and affected individuals should be reported about data breaches within 72 hours of the incident.

Thus, you must create a data breach response plan that specifies the steps to be taken in the event of a data breach. It includes incident detection, containment, recuperation, and communication procedures.

Cookie Collection Policy

Cookie collection notices play a vital role in adhering to GDPR compliance, as they empower users to make informed decisions about the data they are willing to share. Thus, businesses should implement a clear and concise cookie collection policy to inform users about the types of cookies used, their purposes, and how users can manage their cookie preferences. Obtain users’ consent for non-essential cookies and ensure that users can opt-out easily.

Here’s an example of a cookie notice that explains how the company uses cookie data:

Cookie data consent notice example

Data Protection Impact Assessments (DPIAs)

GDPR regulates organizations to conduct DPIAs for processing activities that are likely to result in high risks to individuals’ rights and freedoms. This assessment helps identify and mitigate potential privacy risks. DPIAs should be regularly reviewed to ensure ongoing compliance with GDPR technical requirements.

Cross-Border Data Transfers

GDPR restricts the transfer of personal data to nations outside the European Economic Area (EEA) unless certain conditions are met. Thus, if your software requires the international transfer of personal data, it must align with the GDPR technical requirements for cross-border data transfers.

Verify whether the destination country has an adequate level of data protection policy and if not, implement appropriate protection, such as Standard Contractual Clauses (SCCs), Binding Corporate Rules (BCRs), or rely on approved codes of conduct or certification mechanisms. Clearly communicate these measures to users and ensure they can access information regarding cross-border data transfers.

Avoid Security Questions

Asking security questions is a big ‘NO’ for GDPR software compliance, as such questions can potentially expose users’ sensitive information for substantial misuse. Thus, you must not count on any security questions that involve personal information related to the users’ families, preferences, homes, etc.

The best option is to explore multi-factor authentication, biometric techniques, and other alternative methods for user authentication and account recovery. Such systems will enhance the security of user accounts as well as minimize the use of easily guessable information.

If implementing such methods is not feasible for your business, let your users form their own secret questions and warn them against revealing personal details.

Avoid security questions that disclose personal information

Right to Portability

The GDPR grants users the right to receive their personal data in a machine-readable, structured, and commonly used, format. Thus, your software development service provider must design UI/UX that facilitates the export of user data in commonly used formats (e.g., CSV, XML), enabling users to easily obtain, reuse, and transfer their data to other services or platforms as and when required. This ensures compliance with the right to data portability.

Right to Be Forgotten

Users have the right to request the removal of their personal data when it is no longer necessary for the purpose for which it was collected or processed. Incorporate features in your software that allow users to exercise their right to be forgotten, ensuring that their data is permanently and securely deleted from your system as well as with any third parties with whom the data may have been shared.

Data Removal from Payment Gateways

If your business uses payment gateways, ensure that personal data is processed securely and is not stored longer than necessary. Implement best practices that allow for the timely removal of personal data from payment gateways once transactions are completed. This minimizes the risk of unnecessary data exposure and aligns with data minimization principles. It is indeed an indispensable practice when building eCommerce applications like Adidas, Edamama, 6th Street, etc.

Software Testing for GDPR Compliance

Software testing for quality assurance is an essential step of the GDPR-compliant software development process. To make sure your product aligns with GDPR software compliance, you can add a GDPR compliance checklist to your general software testing process. Remember to conduct testing in a GDPR-compliant way, ensuring that no user data is exposed to unauthorized individuals, including developers, QA specialists, and even business owners.

To reduce the risks of data leaks, you can refrain from using genuine personal data during software testing. Instead, you can use a masked version of synthetic data, actual data, or a combination of both.

Regular Audits and Updates

Conduct regular audits and security updates to ensure ongoing compliance with the regulation of GDPR technical requirements. Stay abreast with any changes in regulations and update your digital products accordingly to steer clear of data theft and avoid any penalties of GDPR. Also, whenever you make an update to your privacy policy, all your users should be instantly informed about the changes.

There are many smaller yet essential regulations of GDPR compliance, such as adherence to SSL, HTTPS, visibility to Terms and Conditions, and so on. Thus, working with an experienced and knowledgeable software development service provider is essential. We at Appinventiv follow a comprehensive check, ensuring a secure GDPR-compliant custom software development process.

Steps to Build a GDPR-Compliant Software

Listed below are the essential steps in developing GDPR-compliant software. From initial requirements analysis to secure deployment, each phase is crucial for ensuring data protection and regulatory adherence.

6 Integral Steps to GDPR-Compliant Software Development

Requirements Analysis

The first and foremost step is to gather and analyze the requirements for the software, ensuring alignment with GDPR principles. At this stage, you need to identify the types of personal data and the lawful bases for processing.

Architecture Planning

The next step is to plan a secure software architecture, incorporating features to protect personal data. This is the stage to implement robust security measures like encryption, access controls, and data minimization.

UI/UX Design

This is one of the most integral steps in building GDPR-compliant software where experts design the intuitive UI/UX to align with GDPR requirements, ensuring transparency and clarity regarding data processing activities and user consent.

Software Development

This is the step to bring your software architecture idea to life. At this stage, developers use secure coding practices for software development, ensuring adherence to GDPR principles and preventing security vulnerabilities.

Testing and Quality Assurance

Now, it is time to conduct penetration testing to identify and address any security weaknesses or vulnerabilities in the software. Test for potential data leaks, unauthorized access points, and compliance with GDPR requirements.

Software Deployment

After thorough testing and iteration, the software is ready to launch in the market for end users. Deploy the software in a manner that ensures GDPR compliance, including proper configuration of data storage, access controls, and user permissions.

Get service assistance to develop GDPR-compliant software

Challenges to Implement GDPR Compliance

Implementing GDPR compliance can present various challenges for organizations. Here are some most critical challenges and their potential solutions:

Challenges and Solutions for Implementing GDPR

Lack of Awareness and Resources

Challenge: Many organizations struggle with lack of awareness and understanding of GDPR requirements. Also, they don’t have the skilled resources to develop GDPR-compliant software and maintain their ongoing compliance with the regulation.

Solution: Conduct regular training sessions for employees to educate them about GDPR principles, requirements, and their roles in compliance. Keep staff members informed about updates and changes in data protection regulations. You can also opt for app maintenance service to ensure ongoing compliance with GDPR requirements.

Data in Paper-Based Documents

Challenge: Paper-based documents, such as personnel files, contracts, etc., are still widely used. The presence of sensitive personal information in paper-based documents poses a challenge as it requires additional measures to secure and manage physical records. Paper documents may be more susceptible to unauthorized access, loss, or damage compared to digital formats, raising concerns about data protection and privacy.

Solution: Addressing data in paper-based documents requires organizations to digitize and secure physical records. Implement strict access controls, logging mechanisms, and encryption for any digitized documents containing personal data. Develop clear policies on the secure disposal of physical documents and promote a culture of secure data handling.

Insecure Practices of Document Exchange

Challenge: Insecure practices during document exchange, such as the use of unencrypted email attachments or reliance on non-secure file-sharing platforms, pose a significant risk to the confidentiality and integrity of personal data. This challenge can result in unauthorized access, interception, or data leakage during transmission, potentially leading to compromising individuals’ privacy and non-compliance with GDPR requirements.

Solution: Addressing this challenge requires the implementation of secure communication channels, encryption, and comprehensive user training on best practices for document exchange. You can also consider leveraging the benefits of interconnection bandwidth for faster and safer data sharing.

Also Read: How to create a data-driven culture in your organization?

Cost to Develop GDPR-Compliant Software

How much it costs to develop GDPR-compliant software is one of the most significant considerations when implementing GDPR compliance. The cost of developing GDPR-compliant software can vary widely based on several factors. For instance, the complexity of the software, the volume and sensitivity of personal data it handles, the location of software developers, the intricacy of UI/UX design, and the existing state of compliance measures within the organization all influence the final cost.

Developing GDPR-compliant software involves upfront expenses for implementing privacy by design, implementing user-friendly features, and integrating robust security measures. Also, there are ongoing costs for regular audits, updates to ensure compliance with evolving regulations, and software maintenance to fix any bugs or glitches.

On average, the overall cost for GDPR compliance software development can range between $30,000 to $300,000 or more, depending on your unique project requirements.

While the cost to build GDPR-compliant software may seem significant, it is a considerable investment for steering clear of potential legal penalties and reputational damage as well as protecting individuals’ privacy rights.

Related Article: Software Development Cost Estimation Process Simplified

Get a free quote to know the cost of GDPR-compliant software development

How Appinventiv Helps Businesses Become GDPR-Compliant

GDPR compliance is the need of the hour, but implementing GDPR compliance alone can be a long and expensive journey, posing significant challenges and hardships. However, with Appinventiv by your side, you can rest assured of coping with the complexities associated with GDPR implementation and software development.

We have proven expertise in app and software development, helping you achieve GDPR compliance quickly and efficiently. Our team of 1200+ tech experts enables you to build state-of-the-art digital products, deploy robust security measures across the organization, detect entity-level threats, prevent potential cyber attacks, and achieve compliance such as HIPAA, GDPR, ISO 27001, PCI-DSS, and so on. For instance, we partnered with a leading FinTech enterprise, Slice, to develop custom software solutions that adhere to GDPR standards and precisely cater to the client’s requirements.

Embark on your GDPR compliance software development journey with us and focus on scaling your business without worrying about facing any legal penalties.

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Q. How to implement GDPR compliance?

A. Implementing GDPR compliance involves a systematic approach to ensure the lawful processing of personal data and the protection of users’ privacy. Key steps to implement GDPR include:

  1. Understand GDPR technical requirements
  2. Conduct data mapping and classification
  3. Implement data minimization measures
  4. Establish a user consent mechanism
  5. Ensure data subject rights compliance
  6. Manage third-party services effectively
  7. Incorporate privacy by design and by default
  8. Enforce robust data security measures
  9. Implement data encryption practices
  10. Establish data breach response protocols
  11. Develop a cookie collection policy
  12. Conduct data protection impact assessments (DPIAs)
  13. Manage cross-border data transfer appropriately
  14. Eliminate security questions to enhance privacy
  15. Facilitate the right to portability implementation
  16. Enforce the right to be forgotten
  17. Remove data from payment gateways
  18. Conduct software testing for GDPR compliance
  19. Perform regular audits and ensure updates

To understand these vital steps in-depth, please refer to the above blog. And if you want professional assistance to implement these steps in your business software, contact our tech experts.

Q. What are the essential steps to develop GDPR-compliant software?

A. We have outlined the essential regulations of GDPR software compliance in the above blog. Here are a few important steps to develop GDPR-compliant software:

  • Start with a solid and well-defined business idea
  • Partner with a fast-tech app development company
  • Create an intuitive UI/UX design
  • Develop an MVP for your digital product
  • Test your product against performance and GDPR compliance
  • Deploy your product to the targeted platforms

Q. How much time does it take to build GDPR compliant-software?

A. The time required to build GDPR-compliant software varies depending on multiple factors, including the complexity of the software, the volume and sensitivity of personal data it handles, the existing data protection measures in place, and the expertise of the software development company.

Typically, the development process for basic software can last 3 to 6 months. At the same time, a more complex product with advanced functionalities and data security measures can take a year or more to ensure comprehensive GDPR compliance.

Sudeep Srivastava
Co-Founder and Director
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