Data Fiduciary Obligations India
In the context of the Digital Personal Data Protection Act (DPDPA) 2023, a Data Fiduciary is any entity that determines the purpose and means of processing personal data. From a cybersecurity perspective, this designation transforms an organization from a mere custodian of data into a legally liable entity responsible for the entire lifecycle of data protection. The Act shifts the focus from simple compliance (having a policy) to active defense (preventing breaches), placing the burden of proof squarely on the Fiduciary.
For cybersecurity teams, these obligations translate into specific technical mandates that must be integrated into the organization's security architecture.
Core Cybersecurity Obligations for Data Fiduciaries
The DPDPA imposes several non-negotiable duties on Data Fiduciaries. Failure to adhere to these can result in severe financial penalties, making them a primary concern for CISOs and security operations centers (SOCs).
1. Implementation of Reasonable Security Safeguards
The Act explicitly mandates that Data Fiduciaries must implement "appropriate technical and organizational measures" to ensure effective observance of the Act. This is the most direct cybersecurity obligation.
Technical Controls: Organizations must deploy defense-in-depth strategies, including encryption (at rest and in transit), robust Identity and Access Management (IAM), and continuous vulnerability management to prevent unauthorized access.
Preventive Posture: The obligation is not just to react to breaches but to prevent them. This requires proactive threat hunting, regular penetration testing, and the monitoring of the external attack surface to identify potential entry points before attackers do.
2. Mandatory Data Breach Notification
One of the most critical operational changes is the requirement for breach reporting.
Dual Notification: In the event of a personal data breach, the Data Fiduciary must notify both the Data Protection Board of India and each affected Data Principal (the user).
Incident Response Readiness: Cybersecurity teams must have an Incident Response Plan (IRP) capable of detecting, containing, and analyzing breaches rapidly. The notification must include details such as the nature of the breach, the personal data affected, and the remedial actions taken.
Zero Threshold: Unlike some regulations that only require reporting for "high-risk" breaches, the DPDPA currently suggests a stringent reporting requirement for any breach of personal data, necessitating high-fidelity detection tools to avoid alert fatigue while ensuring full compliance.
3. Management of Data Processors
Data Fiduciaries are held responsible for the actions of their Data Processors (vendors or third parties who process data on their behalf).
Vendor Risk Management: Cybersecurity teams must audit the security posture of all third-party vendors. It is no longer sufficient to just sign a contract; the Fiduciary must verify that the Processor has implemented equivalent security safeguards.
Supply Chain Security: If a vendor suffers a breach involving the Fiduciary's data, the Fiduciary is liable. This necessitates continuous monitoring of the supply chain's security ratings and external exposure.
4. Data Erasure and Retention (Right to be Forgotten)
The Act mandates the erasure of personal data when the user withdraws consent or when the specified purpose is no longer served.
Secure Deletion: "Erasure" in a cybersecurity context means more than just a "soft delete." Systems must be capable of cryptographically erasing data or overwriting it to ensure it cannot be recovered.
Backup Scrubbing: Technical workflows must be established to ensure that when a deletion request is processed, the data is also removed from disaster recovery backups and shadow logs to prevent "zombie data" from reappearing.
Obligations for Significant Data Fiduciaries (SDF)
The Central Government may classify certain organizations as Significant Data Fiduciaries based on the volume and sensitivity of data they process (e.g., banks, telecom, healthcare). These entities face heightened cybersecurity scrutiny:
Periodic Data Protection Audits: SDFs must undergo regular audits by an independent Data Auditor. This is a technical audit of security controls, logs, and data flows, not just a paperwork review.
Data Protection Impact Assessments (DPIA): Before launching new products or processing activities, SDFs must conduct a DPIA. This involves a technical risk assessment to identify how the new processing might expose data to cyber threats and what mitigation strategies are in place.
Appointing a CISO/DPO: While a Data Protection Officer (DPO) is legally required, for an SDF, this role often overlaps significantly with the CISO, as they are the point of contact for grievance redressal and must understand the technical intricacies of the data environment.
Penalties for Non-Compliance
The DPDPA uses financial penalties as a primary enforcement mechanism. These are not compensation to users but fines paid to the state.
Up to INR 250 Crore: For failure to take reasonable security safeguards to prevent a personal data breach.
Up to INR 200 Crore: For failure to notify the Board or affected Data Principals of a breach.
Frequently Asked Questions
Who determines if an organization is a Data Fiduciary? An organization is a Data Fiduciary if it determines the "purpose and means" of processing. If you decide why data is collected and how it is used, you are the Fiduciary, regardless of whether you store the data yourself or use a cloud provider.
Can a Data Fiduciary transfer liability to a Data Processor? No. Under the DPDPA, the Data Fiduciary remains ultimately responsible for complying with the Act, even if the breach occurs at the Data Processor's end. This makes strict vendor security agreements essential.
What constitutes a "Personal Data Breach" under DPDPA? The definition is broad and includes any unauthorized processing, accidental disclosure, acquisition, sharing, use, alteration, destruction, or loss of access to personal data that compromises its confidentiality, integrity, or availability.
Is data localization mandatory for all Data Fiduciaries? The DPDPA allows for the transfer of personal data to countries outside India, except those specifically restricted by the Central Government ("blacklisted" countries). The focus is on ensuring that data remains protected regardless of where it is stored, rather than mandating it stays in India.
ThreatNG Support for DPDPA Compliance
ThreatNG supports compliance with the Digital Personal Data Protection Act (DPDPA) by providing an outside-in view of an organization's digital risk posture. It assists Data Fiduciaries in meeting their obligations to implement "technical and organizational measures" by identifying, assessing, and monitoring the external attack surface where personal data breaches often originate.
External Discovery
The DPDPA requires organizations to account for and protect all digital personal data they process. ThreatNG facilitates this through External Discovery, which performs purely external, unauthenticated discovery without using connectors or agents.
Shadow IT Identification: ThreatNG identifies unknown assets and "Shadow IT" that may be processing personal data outside of the security team's visibility. This ensures that the organization's data inventory is comprehensive.
Cloud Exposure: It specifically uncovers external digital risks across "Cloud Exposure," including exposed open cloud buckets and externally identifiable SaaS applications. This is critical for DPDPA compliance as open buckets are a frequent source of data leaks that would constitute a reportable breach.
External Assessment
ThreatNG’s External Assessment validates the effectiveness of security safeguards by testing assets against specific attack vectors.
Web Application Hijack Susceptibility This assessment evaluates the presence of key security headers on subdomains to prevent client-side attacks.
Assessment Mechanics: It rates subdomains (A-F) based on the presence or absence of headers like
Content-Security-Policy(CSP),HTTP Strict-Transport-Security(HSTS), andX-Frame-Options.Risk Example: If a subdomain is missing a
Content-Security-Policy, attackers can exploit this to inject malicious scripts, leading to credential theft and session hijacking. This directly threatens the confidentiality of user data protected under DPDPA.Consequence: A successful "Cross-Site Scripting via CSP Bypass" allows attackers to exfiltrate sensitive data to external domains, constituting a data breach.
Subdomain Takeover Susceptibility ThreatNG identifies "dangling DNS" records that point to inactive third-party services, which attackers can claim to host malicious content.
Assessment Mechanics: The solution performs external discovery to identify subdomains and uses DNS enumeration to find CNAME records pointing to third-party services. It cross-references hostnames against a comprehensive Vendor List, including Cloud & Infrastructure providers (AWS, Microsoft Azure), PaaS (Heroku, Vercel), and Help Desk platforms (Zendesk, Freshdesk).
Validation: If a match is found, ThreatNG performs a specific validation check to determine if the resource is inactive or unclaimed, confirming the "dangling DNS" state.
Risk Example: An attacker can claim an abandoned subdomain to host phishing sites or serve malware to users and employees. This "Subdomain Control for Phishing and Credential Harvesting" allows adversaries to capture credentials or session tokens, leading to unauthorized access to personal data.
Reporting
To meet DPDPA accountability requirements, ThreatNG provides robust Reporting capabilities that document due diligence and risk posture.
Compliance Mapping: The "External GRC Assessment" maps findings directly to relevant frameworks, including DPDPA, PCI DSS, GDPR, and ISO 27001. This allows organizations to see their specific compliance gaps from an attacker's perspective.
Executive and Technical Reports: Reports include prioritized risk levels (High, Medium, Low) and security ratings (A through F). These serve as audit artifacts to demonstrate to the Data Protection Board that "reasonable security safeguards" are being monitored and improved.
Continuous Monitoring
Compliance is an ongoing status, not a one-time check. ThreatNG provides Continuous Monitoring of the external attack surface, digital risk, and security ratings. This ensures that as new assets are deployed or new vulnerabilities arise, the organization is alerted immediately, allowing them to maintain the protection standards required by the Act.
Investigation Modules
ThreatNG’s Investigation Modules allow for deep-dive analysis into specific threats that could compromise the integrity of personal data.
Domain Intelligence This module helps prevent brand impersonation and phishing attacks that target Data Principals.
Web3 Domain Discovery: ThreatNG proactively checks the availability of Web3 domains (e.g., .eth, .crypto) to identify potential risks such as brand impersonation and phishing schemes.
Domain Name Permutations: It detects "typosquatting" domains (e.g., lookalike domains) that have valid mail records. Attackers register these permutations to impersonate the brand in phishing campaigns or deceive users into revealing sensitive information.
Risk Example: "Email Spoofing via Typosquatted Domain with MX Record" allows adversaries to send phishing emails that appear to come from the legitimate organization, leading to credential theft.
Sensitive Code Exposure
Assessment Mechanics: This module searches public code repositories for leaked "Access Credentials," such as Amazon AWS Access Key IDs, Google OAuth Tokens, and Stripe API Keys.
Risk Example: "Credential and Secret Leakage Leading to Unauthorized Access" occurs when attackers exploit these exposed secrets to gain unauthorized access to systems and services. This is a critical failure of security safeguards under DPDPA.
Social Media and Dark Web Monitoring
Reddit Discovery: This transforms unmonitored public chatter on Reddit into intelligence, identifying "Narrative Risk" where employees might discuss internal operations or tech stacks.
Risk Example: Information from Reddit posts can be used to profile employees and identify infrastructure details, facilitating targeted social engineering attacks.
Intelligence Repositories
ThreatNG’s Intelligence Repositories (DarCache) provide context on active threats to help prioritize defenses.
Ransomware Groups: The solution tracks over 100 ransomware gangs (e.g., LockBit, BlackCat) and their tactics. Understanding these groups helps organizations defend against "Big Game Hunters" that target high-value sectors and exfiltrate sensitive data.
Vulnerabilities: It correlates findings with "Verified Proof-of-Concept (PoC) Exploits" and "KEV" (Known Exploited Vulnerabilities). This allows teams to prioritize patching vulnerabilities that are actively being used to steal data.
Cooperation with Complementary Solutions
ThreatNG enhances the DPDPA compliance ecosystem by providing external intelligence that complements internal security tools.
Governance, Risk, and Compliance (GRC) Solutions ThreatNG cooperates with GRC solutions by feeding them "External GRC Assessment" data. While GRC tools manage internal policies and documentation, ThreatNG validates these policies by providing evidence of external exposure. For example, ThreatNG can verify if the "technical measures" listed in the GRC platform (like WAF usage) are actually effective and visible externally.
Security Information and Event Management (SIEM) Solutions ThreatNG cooperates with SIEM solutions by providing external threat context. While SIEMs monitor internal logs, ThreatNG provides intelligence on "Compromised Credentials" from the Dark Web and "Ransomware Events". This allows the SIEM to correlate an internal login attempt with a known leaked credential, elevating the alert severity for a potential data breach.
Third-Party Risk Management (TPRM) Solutions ThreatNG cooperates with TPRM solutions by assessing the "Supply Chain & Third Party Exposure" of vendors. It identifies the vendors and technologies an organization relies on via "Domain Record Analysis". TPRM tools can use this data to verify that Data Processors (vendors) are maintaining the security standards required by DPDPA contracts.
Vulnerability Management Solutions ThreatNG cooperates with Vulnerability Management solutions by identifying "Known Vulnerabilities" on the external attack surface. It prioritizes these findings using "EPSS" scores and "Verified Proof-of-Concept Exploits". This helps vulnerability teams focus on the external-facing flaws that pose the most immediate risk of a data breach.
