SOC 2 is a set of five trust service criteria developed by the AICPA that cover security, availability, processing integrity and confidentiality. Data breaches have become all too frequent, and customers want to ensure the companies they deal with take their privacy seriously. To demonstrate this, companies employ security frameworks like SOC 2 to demonstrate they are reliable and safe for their clients.
What is SOC 2?
SOC 2 compliance is an absolute requirement for businesses that manage sensitive customer data – be it stored online or locally at headquarters – whether hosted in the cloud or locally on servers at their headquarters. Set by the American Institute of CPAs, this industry standard ensures you have a strong framework in place to protect this data, with internal processes operating as intended. Achieving and maintaining SOC 2 certification opens your organization up to new opportunities as it shows you can be trusted with other businesses’ data.
SOC 2 compliance can be measured against five Trust Service Criteria: Security, Privacy, Processing Integrity and Availability. Of these five criteria, Security stands out as being most crucial, protecting your systems against unauthorized access through firewalls, two-factor authentication or intrusion detection systems.
Privacy refers to protecting user data, and requires policies be put in place in order to keep their personal information safe. Processing Integrity refers to how well your systems process the information that’s provided them – this could include anything from how emails are managed through to how databases are structured.
Once your policies and procedures are in place, a SOC 2 audit can help ensure they remain compliant. An outside auditor will assess whether your internal processes fulfill Trust Service Criteria standards – auditing policies and procedures as well as tools used for implementation.
Although SOC 2 certification isn’t legally mandated, many North American businesses prefer vendors who can demonstrate compliance. It has become an industry standard that shows customers and partners you take their security seriously.
SOC 2 compliance should be an absolute necessity for any company storing and processing customer data; however, you may only require SOC 2 Type II compliance if your clients request it. Type II reviews take less time to complete; it still demonstrates your organisation has sound internal processes in place.
Why is SOC 2 Compliance Important?
Compliance with SOC 2 compliance is vital because it demonstrates to clients, partners, and potential customers that you take security seriously. Furthermore, certification demonstrates to competitors that your company abides by five trust principles with policies and procedures in place to back these claims up.
Not every trust principle must be fulfilled for you to obtain SOC 2 certification; instead, each trust principle requires that criteria are fulfilled within it. To meet any given principle’s criteria, policies must be put in place and followed with employees; additionally, an independent third-party auditor specializing in SOC reporting must conduct an audit for proof. The AICPA recognizes these auditing services.
SOC 2 compliance can help your company win and retain high-value clients and business partners. Many organizations don’t work with vendors who don’t meet this standard; fulfilling it could propel your company’s success further than ever before.
SOC 2 compliance can save money on cybersecurity incidents by decreasing their likelihood. Thanks to SOC 2, your company is less likely to experience data breaches or privacy violations, as well as being subject to significant regulatory fines from these incidents.
SOC 2 compliance can assist your company’s expansion by giving it the resources to take on new opportunities and support future business expansion. Security standards set out by your organization are comprehensive; by showing that all policies and procedures are implemented and working efficiently, it increases your likelihood of meeting them moving forward.
SOC 2 compliance should be an absolute priority for IT services companies that specialize in cloud storage and other technologies that utilize the cloud, as it ensures your customers and clients trust your company with their sensitive data, which in turn builds loyalty and improves customer retention.
How Can I Become SOC 2 Compliant?
SOC 2 compliance has become an industry standard (and sometimes a requirement), as companies report more data breaches and consumers demand that companies they interact with take security seriously. SOC compliance can also help startups secure enterprise customers with stringent procurement processes by using it as a marketing differentiator to demonstrate their dedication to security by adding the AICPA’s SOC 2 logo on their websites and marketing materials.
Becoming SOC 2 compliant isn’t simple, and requires much hard work that goes far beyond simply creating documentation and passing an audit. SOC compliance should be treated as an ongoing effort that includes testing and updating security measures regularly to remain compliant. When selecting an auditor, make sure they have experience working with SOC-compliant organizations as they will need someone who can guide you towards understanding SOC 2’s guiding principles of security, availability, processing integrity and privacy compliance.
Once you’ve selected a service auditor, the process starts by creating security and privacy policies. These documents establish frameworks that define which data can be collected, stored and who has access to it. Each policy must address each of the five SOC 2 principles:
Implement technical controls tailored to the infrastructure of your company that will protect the data that resides with you – firewalls, access control mechanisms, MFA mechanisms and encryption methods are among the many solutions you should employ to do this effectively.
At last, you must establish procedures to protect personal identifiable information (PII). This refers to any data that identifies an individual, such as their name, email address, home address and Social Security number; in addition to sensitive data like health records, race or sexuality.
SOC 2 compliance can be an intensive, time- and resource-consuming endeavor for startups that wish to go after enterprise clients, yet is an integral component of expanding your market presence. Furthermore, some enterprise customers might refuse to do business with startups that don’t comply with SOC 2, leading them to reject you altogether.
What Are the Benefits of SOC 2 Compliance?
Being SOC 2 compliant offers many advantages. First and foremost, its rigorous audits require companies to scrutinize their internal processes and practices in order to comply with Trust Services Criteria, thus improving security and reducing risks. SOC 2 compliance also shows clients and prospects that your organization takes information security seriously, which builds trust within your business while potentially opening up new business opportunities.
SOC 2 compliance can help your organization avoid costly data breaches and lawsuits caused by ineffective security controls, and establish compatibility between systems to make sharing data simpler.
The American Institute of Certified Public Accountants (AICPA) conducts an annual System and Organisational Controls 2 (SOC 2) audit as part of their Trust Service Principles audit to provide assurance that your information security measures comply with industry standards. The audit aims to address security, availability, processing integrity, and confidentiality.
SOC 2 certification may not be legally necessary, but many client contracts require it. B2B and SaaS companies should seriously consider becoming SOC 2 compliant to ensure they have adequate security measures in place; larger companies may even request it before working with you, giving your business an edge over those without one.
As opposed to SOC 1 and 3 audits, which specifically cover financial services, the SOC 2 audit examines your information security practices across industries. If your SaaS provider deals with sensitive information, however, HITRUST certification could provide added safeguards in protecting electronic protected health information (ePHI).
SOC 2 compliance can take months and requires two audits by independent assessors. Preparing for these audits by identifying any TSCs applicable to your services, creating and documenting information security policies and changing internal processes will make the process smoother.