According to the General Data Protection Regulations (GDPR) that came into effect in 2018, any company that fails to comply with its data protection principles is liable to pay a hefty fine and may not be permitted to work in the EU.
For example, Amazon was fined €746 million in 2021 by Luxembourg for failing to comply with GDPR.
If your company monitors individual behavior in the EU, it must comply with Europe’s GDPR, regardless of where the company is based. EU’s data protection authorities have the right to fine you up to €20 million, or 4% of your annual global turnover, whichever is higher if you fail to comply with these regulations.
With the increasing number of GDPR violations, it’s time for companies to take off their blindfolds and question whether their CRM solution is following these regulations.
Here are some things for you and your team to think about while choosing relevant solutions:
Many CRMs automatically capture emails to and from your clients. So, for example, they read your conversations with LPs and potential portfolio companies and populate them in your CRM. However, this is against GDPR.
You need to make sure your CRM does not automatically go through emails from your investors and portfolio companies. If your CRM pulls data from your email, it probably isn’t GDPR compliant and should be replaced.
Many CRMs advertise relationship intelligence. However, to provide this, they usually pull data from your team’s LinkedIn and Twitter profiles and other socials. They also read emails to capture data. This data is used to generate insights such as who in your team has the strongest connections in a particular company.
You need to check whether your CRM is gathering relationship intelligence data for you, and if so, what are the methods they are using. GDPR doesn’t allow automated decision-making, so it probably isn’t GDPR compliant if your CRM does this.
GDPR states that companies must store all their EU-related data in Europe. However, as most CRMs are America-based, they continue to house their data servers in America.
So make sure your CRM has its data storage servers in the EU. If you fail to comply with this regulation because your CRM is storing your data in America, you face the risk of being denied access to your valuable data.
Sounds scary, right? That’s why we’ve built Zapflow, a GDPR-compliant solution for investors like you. We help you optimize your investment operations through our multi-modular structure in a GDPR-compliant manner. Our ISO/IEC-certified solution lets investors manage the entire lifecycle of deals from deal sourcing to exit.
If this sounds interesting, we’d like to show you our solution over a free live demo. Book a call now!