Regulatory trends every CIO should watch

Global data privacy restrictions

Data privacy regulations continue to expand globally. The EU's GDPR set the template, but jurisdictions worldwide have followed with their own requirements. The CCPA, Brazil's Lei Geral de Proteção de Dados and India's Digital Personal Data Protection Act each impose distinct obligations on how organizations handle personal information.

"The main challenge is the variety and variance in regulations across multiple countries and regions," Duncan Brown, group vice president at International Data Corporation (IDC), said. "What may be compliant in one country may not be in another, and in some cases could be contradictory. It's also an ever-changing regulatory landscape, so keeping tabs on all of the regulations worldwide is a big challenge, too."

Implications for CIOs

Data storage and transfer restrictions create immediate operational challenges.

"CIOs are juggling fragmented regulations, limited visibility into data flows and rising sovereignty mandates, all while trying to embed privacy-by-design and keep up with innovation," Elber Ribeiro, executive vice president of cloud infrastructure services Americas at Capgemini, commented. "More than just a technical challenge, compliance demands governance and a strong privacy culture."

Cross-border compliance challenges for global IT operations require new approaches. Brad Shimmin, vice president and practice lead for data intelligence, analytics and infrastructure at Futurum Group, notes that CIOs are now having to pivot from manual compliance reporting to automated privacy by design. Automation is particularly required for cross-border data flows, where conflicting localization laws now demand privacy-enhancing technologies, such as cryptography and synthetic data, to enable safe data computation without actual data movement.

Actionable steps for CIOs:

• Conduct data inventory audits, mapping information flows across systems and geographies.
• Update privacy policies to reflect consent requirements and individual rights provisions.
• Implement consent management systems that adapt to changing legal standards.
• Deploy cryptographic resolutions and synthetic data tools for cross-border analytics.

AI and machine learning governance

AI is an emerging area of regulations around the world, with a series of nascent regulations.

One of the earliest regulations is the EU AI Act, which establishes risk-based requirements for AI systems, with high-risk applications facing strict transparency and accountability standards. U.S. government agencies are beginning to issue initial guidance on AI across various sectors, while individual states are also developing their own approaches. Adding further complexity, sector-specific AI rules are emerging in healthcare, financial services and employment, each with distinct compliance requirements.

"Unfortunately, CIOs must consider the full spectrum of practices and regulations that exist around the world, as each new regulation or practice influences the whole," Shimmin said.

Risks for CIOs:

The emerging regulatory landscape for AI poses several risks for CIOS, including:

Accountability for AI-driven decisions. Organizations must demonstrate who made decisions to deploy AI systems, how those systems operate and what oversight mechanisms exist. The EU AI Act requires human oversight for high-risk applications, while sector-specific rules mandate documentation of decision-making processes.

Bias and transparency requirements. Issues related to decision-making and potential bias in AI outputs are a particular risk for CIOs.

Shimmin notes that audit practices need to shift from static model validation to continuous algorithmic auditing that monitors data, model and context drift and bias in real-time, ensuring that the human-in-the-loop requirements specified by practices like the EU AI Act are satisfied.

Best practices:

There are a few best practices that CIO should consider to limit the regulatory risk of AI compliance.

Define your governance strategy. According to Brown, it's critical for CIOs to understand what is driving the AI governance program. It could be simply a matter of compliance with the EU AI Act, for example. It could be a need to achieve a desired outcome, for example having responsible AI. Or it could be business goal driven, for example achieving competitive advantage and cost reduction.

"Governance is essentially a risk assessment and management approach, so understanding what risks exist and the Board's overall approach to these risks (accept, transfer, mitigate, etc.) is key," Brown said.

Adopt global standards and frameworks. While regulations are emerging, Ribeiro emphasized that effective AI compliance starts with risk-based governance and transparency.

"CIOs can look to global standards like the NIST AI Risk Management Framework and ISO/IEC 42001 for guidance," he said. "Regular bias testing and clear documentation are the foundation of trust."

Deploy continuous monitoring. Shimmin emphasizes that organizations must monitor data, model and context drift and bias in real time to satisfy regulatory requirements. Continuous monitoring replaces point-in-time assessments for model drift, bias detection and compliance verification.

Cybersecurity compliance requirements

Cybersecurity regulation is evolving rapidly, with recent requirements altering expectations for responding to breaches. The SEC's cybersecurity disclosure rules require public companies to report material incidents within four business days. The EU's Cyber Resilience Act imposes security requirements on products with digital elements. Updates to the NIST Cybersecurity Framework provide refined guidance for risk assessment.

CIO impact

The shift in cybersecurity-related regulations has turned breach response into a board-level issue.

"CIOs need rapid materiality assessments, regulator-ready reporting and integrated governance with legal and finance," Ribeiro said. "It's no longer about alerts, it's about response speed, resilience and accountability."

Beyond board-level concerns, CIO risk management now encompasses personal liability questions. Brown raises questions that now factor into how CIOs approach risk management:

• What level of personal liability does the CIO have?
• Could they be held personally liable for a breach?
• Does their company have liability insurance?

He emphasizes that getting a balance between board expectations and personal liability is critical.

Board-level decisions about compliance approach also shape CIO strategies. Brown asks: "What is the Board's approach to dealing with compliance? Do they encourage minimum compliance or go further and pursue best practice? This is a board decision."

Practical steps for CIOs:

• Align internal policies with regulatory frameworks such as NIST CSF.
• Invest in monitoring, logging and incident response improvements.
• Conduct quarterly tabletop exercises simulating breach scenarios.
• Establish clear escalation paths for materiality assessments involving legal and finance.
• Document incident response procedures that meet regulatory timelines.

Cloud, SaaS and vendor management

Cloud, including software-as-a-service (SaaS), is an area where CIOs have had to deal with compliance-related issues for several years. The issue that many CIOs struggle with is vendor management for cloud and SaaS providers, as the responsibility for compliance verification remains with the customer organizations.

The traditional approach of annual cloud compliance certificates no longer satisfies regulatory requirements.

The shift represents a fundamental change in vendor relationships. Shimmin commented that the regulatory landscape is redefining cloud procurement from a purely commercial transaction into a binding framework that he calls -- shared operational resilience.

"The days of relying on passive point-in-time compliance certificates are over," Shimmin said. "Instead, CIOs must now demand contracts that mandate continuous verification of data sovereignty and security controls."

This emphasis on resilience reflects broader regulatory trends. Brown noted that regulation is heading toward resilience, the ability to recover from an incident, rather than prevention.

CIO considerations

Contractual requirements must address regulatory obligations upfront. Additionally, Ribeiro emphasized that data residency and sovereignty must be baked into procurement. That said, it's critical to properly understand the specific data residency requirements for a given jurisdiction.

According to Brown, in most cases, even in the EU, data residency requirements are light. They only apply to personal data and are applied at the EU level.

"Many data residency requirements are self-imposed, not mandated," Brown said. "Since data residency often comes at extra cost, CIOs should determine whether requirements are mandated by law or desired by the board and balance the cost against perceived risk."

Recommendations:

• Develop a formal vendor compliance framework.
• Conduct vendor risk assessments for all vendors handling regulated data.
• Include regulatory compliance checkpoints in procurement and onboarding processes.

Ethical tech and corporate responsibility

Technology leaders are facing increasing scrutiny over the ethical implications of their systems. IoT deployment raises privacy concerns, and technologies, including employee monitoring tools, create tension between productivity insights and worker rights.

While some jurisdictions have enacted specific requirements around algorithmic transparency or employee monitoring, many ethical considerations exist in regulatory gray areas. Enforcement actions and public pressure can emerge rapidly.

CIO's role

Leading ethical governance initiatives requires collaboration across the organization. CIOs must partner with legal teams, human resources, risk management and communications to address employee privacy, assess regulatory risk and prepare for public scrutiny.

Recommendations:

• Establish internal ethical review boards with diverse perspectives.
• Conduct regular reviews of existing systems.
• Maintain transparency in data collection and AI decision-making.

Executive action items

The regulatory landscape for technology will only grow more complex. AI audits will expand as governments gain experience regulating algorithmic systems, moving from theoretical frameworks to practical enforcement. While global privacy harmonization may progress, regional differences will persist. Cybersecurity mandates will continue evolving toward rapid disclosure requirements and operational resilience. Vendor resilience standards will become more prescriptive about recovery capabilities.

Regulations are increasingly integrated into business operations and tech strategy. CIOs should:

• Audit IT policies and practices against current regulations.
• Establish technology governance across vendor, AI and cloud operations.
• Build cross-functional compliance and ethical tech teams.
• Integrate regulatory considerations into strategic planning.

Success ultimately often comes down to strategic resource allocation.

 "As always, the primary challenge is balancing risk against cost," Brown said.

Sean Michael Kerner is an IT consultant, technology enthusiast and tinkerer. He has pulled Token Ring, configured NetWare and been known to compile his own Linux kernel. He consults with industry and media organizations on technology issues.