Q1 - What is the difference between a Data Fiduciary and a Data Processor?
A Data Fiduciary is the person or organization that decides why personal data is being collected and how it will be used.
They are responsible for making sure that all data is handled lawfully, securely, and for the right purpose.
Under the Digital Personal Data Protection Act, 2023 (DPDPA), the Data Fiduciary holds the main responsibility for protecting the personal data of individuals (called Data Principals).
A Data Processor is a person or company that processes personal data on behalf of the Data Fiduciary.
They don’t decide the purpose or method of processing — they simply follow the instructions given by the Data Fiduciary.
The Processor cannot use or share the data for any other reason.
The key difference is that the Data Fiduciary has control and accountability, while the Data Processor only performs the tasks assigned.
Even if the Processor makes a mistake or there is a data breach, the Fiduciary remains responsible under the law.
🧩 Real-World Examples
A bank collects and analyses customer data to approve loans. The bank decides why and how the data is used — so it is the Data Fiduciary. If the bank hires a cloud service provider (like AWS or Azure) to store this customer data, that provider is the Data Processor.
An online store collects customer names, addresses, and payment details to deliver orders. The store is the Data Fiduciary because it decides the purpose of collecting that information. If it hires a marketing company to send promotional emails or a logistics partner to deliver goods, those partners act as Data Processors.
A healthcare company runs a telemedicine app that stores patient health records. The company decides why the data is collected and how it’s used — it is the Data Fiduciary. If it outsources its database management to an IT vendor, that vendor is the Data Processor.