In a digital age where personal data is the new currency, the Digital Personal Data Protection (DPDP) Act of 2023 stands as a pivotal and commendable initiative by the government to safeguard the privacy rights of every citizen. This groundbreaking legislation addresses the long-standing concerns surrounding the misuse and vulnerability of personal data, marking a significant leap toward enhancing transparency and regulatory compliance.

The DPDP Act is not a mere checkbox for organisations; it represents a paradigm shift in the way companies approach the full user lifecycle. Beyond obtaining consent, it necessitates a thoughtful consideration of each specific purpose for which data is collected. Imagine a user opening a bank account – the information provided for this purpose may have implications for cross-selling, marketing, SMS notifications, and more. The management of these specific consents becomes paramount.

User lifecycle management
The DPDP Act demands a meticulous approach to the user data lifecycle. Data fiduciaries (organisations responsible for managing user data), must not only secure consent but also regularly manage instances of consent updates or withdrawals. Users should have the ability to delete their data or revoke consent for specific purposes, placing the onus on organisations to provide seamless processes for such actions.

Responsibility towards data processors
Organisations acting as data fiduciaries are not solitary actors in the data management landscape. They must extend their responsibility to ensure that all outsourced partners, or data processors, handle user data responsibly. This adds an additional layer of complexity to compliance, requiring a robust system for overseeing data processing activities throughout the ecosystem.

Tracking data flow
To prevent leakages in the data flow, organisations must track every instance where user data is transmitted. This entails a comprehensive understanding of the data’s journey, from collection to processing and sharing. The DPDP Act encourages organisations to adopt measures to secure the entire data pipeline actively.

Cultural transformation
Compliance with the DPDP Act is not merely a technical or compliance activity; it is a cultural transformation for organisations. It requires a holistic approach that encompasses people, processes, and technology. This shift should be driven from the top, making it a board-level conversation. By embedding data privacy into the organisational culture, companies can use compliance as a tool to build and maintain user trust.

Industries impacted
The impact of the DPDP Act extends across various industries that handle digital personal data. Banking, financial services, insurance, e-commerce, direct-to-consumer (D2C) businesses, software companies, and healthcare and diagnostics services are among those likely to feel the regulatory ripples. These industries must prioritise consent governance and data privacy to align with the requirements of the DPDP Act, 2023.

The DPDP Act, 2023, heralds a new era in data protection, urging organisations to rethink their approach to user data. While compliance may seem onerous, leveraging the right tools and giving due attention to the intricacies of the Act can simplify the process. Organisations must embrace this as an opportunity to drive user trust by demonstrating their commitment to using data responsibly. The enactment of the DPDP Act is not just a legal obligation; it is an invitation for organisations to embark on a transformative journey towards a privacy-centric future.

This article is authored by Ashok Hariharan, CEO, IDfy. All views expressed are personal.