Data protection impact assessments: When and how to conduct a DPIA

In today's data-driven world, businesses handle vast amounts of personal information. This data can be incredibly valuable, but it also carries substantial responsibilities and risks. Conducting a data protection impact assessment (DPIA) is an important step in safeguarding your business from a data breach. As part of a proactive legal strategy, DPIAs help you stay ahead of potential issues, protecting both your business and your reputation.

Why should you care about data protection impact assessments (DPIAs)?

Think of a DPIA as your safety net. It helps you spot potential data protection risks before they become a problem. By being proactive, you can avoid fines, protect your reputation, and build trust with your customers. They’re also a key part of the GDPR’s focus on accountability and data protection by design—meaning privacy considerations should be built into your projects from the very start.

When do you need a DPIA?

You need to consider a DPIA during the planning stage of new projects or when making changes to existing processes that involve personal data. DPIAs must be done before any new data processing begins. This way, you can address risks proactively rather than reacting to issues after they occur.

A DPIA is legally required if your data processing activities are likely to pose a ‘high risk’ to individuals’ rights and freedoms. 

What does ‘high risk’ look like?

‘High risk’ can be a bit of a grey area. The Information Commissioner's Office (ICO) has provided some guidance to help you decide when a DPIA is necessary. Examples include using new technology like AI, processing sensitive data on a large scale, or systematically monitoring people (e.g., location tracking). In regulated sectors like finance or telecoms, you’ll also need to consider specific industry risks.

Take into account the types of data you’re using, how it’s processed, and the scope of your activities. If you’ve carried out a DPIA for a similar project before, you may not need to do another one—but it’s always worth double-checking.

How to conduct a DPIA: A practical approach

Conducting a DPIA involves several critical stages, each designed to ensure thorough analysis and effective risk mitigation. Here’s how to navigate the process step by step:

• Describe the processing activities

Start by clearly outlining why the data processing is necessary. Identify what types of data will be collected, how it will be used, stored, and eventually deleted. Define who will have access to this data, whether it’s internal team members or third-party processors. By mapping this out, you create a clear understanding of the data journey within your business.

• Assess necessity and proportionality

Next, make sure the processing has a solid legal basis under GDPR. Ask yourself: Is this data truly necessary to achieve your business objective? Are you collecting only the information needed? Establish data retention policies to clarify how long you will keep the data, and ensure you have mechanisms in place to uphold individuals’ rights—such as the right to access or delete their data.

• Identify and assess risks

Evaluate the potential risks to data subjects, including unauthorised access, data breaches, or misuse. Determine both the likelihood and impact of these risks. This is where you truly understand the vulnerabilities associated with your data processing activities, allowing you to take targeted action.

• Identify measures to mitigate risks

Once the risks are identified, put mitigation measures in place. This might involve implementing technical controls like encryption or limiting data access through permissions. Organisational measures, such as staff training and developing incident response plans, are also crucial in creating a data-conscious company culture.

• Document and integrate the outcomes

Compile all your findings into a comprehensive DPIA report. If high risks remain even after taking mitigative steps, you may need to consult the Information Commissioner's Office (ICO) before proceeding. Ensure that the recommended measures are implemented and that their effectiveness is monitored over time.

Three key steps for making DPIAs part of your business culture

To make sure you’re conducting DPIAs effectively, it helps to build them into your business processes:

• Get your team involved

Whether you’re a small business or a larger operation, your team is key. In bigger organisations, work with teams like IT, legal, and procurement—these departments often know about new projects before anyone else. Make sure they know when a DPIA might be required so they can flag it up early.

In smaller businesses, it might just be you and a couple of key team members. Make sure everyone knows what to watch out for and when to ‘raise a hand.’

• Know your appetite for risk

Does your business want to do the bare minimum required by law, or are you happy to go above and beyond? Some businesses choose to conduct DPIAs for any significant project involving personal data to be on the safe side. This might require more resources, but it gives you more oversight and confidence.

• Adopt a simple screening process

Use a short set of standard questions to help decide if a DPIA is needed. This can be as simple as a quick call or checklist for stakeholders. Keeping it simple helps ensure you don’t get bogged down in unnecessary assessments.

Common challenges and how to overcome them

Many businesses struggle with the complexity of data flows or lack awareness of how to conduct DPIAs effectively. To overcome these challenges, involve cross-functional teams from IT, legal, and HR, and ensure your data protection officer (DPO) plays a central role. 

When resources are limited, prioritise DPIAs for processing activities with the highest risk. Investing time upfront can save significant costs down the line by preventing data breaches and the reputational damage that follows.