Your SOC 2 report is the evidence you (and your customers) need to demonstrate that your information security controls are up to the job of protecting users’ data. It’s a powerful way of communicating exactly how seriously you take information security while giving the peace of mind that you’ve taken effective measures to protect customer data and prevent breaches, data leaks and other data security mishaps that could wreck your reputation.
In other words, SOC 2 is more than simply a compliance standard. Becoming SOC 2 compliant is a good business decision. A really good one.
Benefits of SOC 2 Compliance
So why is SOC 2 so important? There are plenty of reasons for any SaaS company to prioritize SOC 2 compliance and why it is in the best interest of the company. SOC 2 can also place a company at an advantage when it comes to your operating market, as well as sales potential. Here’s our shortlist of a few of the most compelling reasons why your business needs a SOC 2 report.
1. It’s a Chance to Show, Not Just Tell
A SOC 2 report is a special kind of compliance document. Becoming SOC 2 compliant isn’t simply about ticking the right boxes and getting your certification. In fact, SOC 2 is not a certification at all. Rather, your independent SOC 2 auditor attests that you have met the strict standards set out by the The American Institute of Certified Public Accountants (AICPA). The AICPA is the national professional organization of Certified Public Accountants in the United States.
In other words, the SOC 2 report is a detailed account of the controls you have designed and successfully implemented to ensure your customers’ data security. And that means that instead of simply assuring customers and partners that you take information security seriously, your SOC 2 report provides detailed, comprehensive evidence and results of your security controls testing.
SOC 2 demonstrates to the public a company’s dedication to a high level of information security. Protecting customer data also means protecting the sensitive information of user entities or clients. However, it also shines light on a company’s ethics, professionalism and quality standards In addition, it improves risk management and identifies improvement opportunities
And if you choose to implement SOC 2 Type II- the gold standard in data security, this report offers in-depth insights into the controls you have implemented and their effectiveness, providing continuous assurance of compliance rather than a static, one-time certification.
2. Your Customers Will Demand It (Now or in the Future)
As we can now see, a SOC 2 report is an excellent way to prove your data security bona fides. That’s a powerful advantage you have, which is especially useful for startups looking to build their brand and break into new markets.
Moreover, the evolving landscape of data privacy regulations and increasing customer awareness are driving the demand for SOC 2 compliance in various sectors beyond technology startups. It serves as a foundational requirement for doing business in an environment where data security is non-negotiable.
But it’s a mistake to think of a SOC 2 report as simply a ‘nice to have’. Many customers will demand compliance with a stringent information security standard – such as SOC 2 – as a minimum condition of doing business. In other words, they won’t even consider your product if you cannot produce a valid SOC 2 report, no matter how excellent your technology and service may be. Therefore, without SOC 2, companies are very likely to lose valuable business or fail to reach full potential. Achieving and maintaining SOC 2 compliance also plays a major role in customer retention. In addition, it assists in meeting and attaining contractual obligations.
That’s true of future clients. But it may also be true of your existing clients, which may implement stricter procurement policies as they grow. Becoming SOC 2 compliant ensures you can grow with your clients, and continue to provide first rate service to even the most data-security conscious businesses.
3. Protect your Brand Reputation
Protect your brand’s reputation through SOC 2 compliance. As we can now see, a SOC 2 report is an excellent way to show customers just how effective your data security controls are. But even more importantly, it’s a way to reassure yourself that you have successfully implemented appropriate security measures.
After all, if your business suffers a data breach or if information security is compromised in any way, that can be absolutely catastrophic for your brand reputation. Some companies never recover from the reputational damage of a serious breach.
SOC 2 ensures a company’s security posture is of an indestructible standard. Therefore, SOC 2 significantly reduces any chance of data breach, human mistake or fraud and the consequences that come with such an incident. Audit costs can be quite costly but fines due to a data breach causes financial damage. Then, there is also reputational damage that sits with the company’s name.
SOC 2 takes the guesswork out of data security. After all, you get the reassurance of an objective assessment by professional auditors that you meet an independent set of information security standards. What could be more reassuring than that?
4. Save Money in the Long Run
By now we can appreciate that SOC 2 is a powerful and effective information security standard that offers a clear business advantage. But can your company afford it? After all, implementing SOC 2 is time-consuming and requires a substantial investment of resources.
That’s not a trivial question. For startups and small businesses in particular, choosing how to prioritize your limited resources is a key strategic decision.
Fortunately, advances in SOC 2 compliance software have made SOC 2 compliance simpler, easier and more affordable. The ability to automate tedious, time-consuming and error-prone SOC 2 processes means that more businesses can enjoy the benefit of SOC 2 compliance.
Considering the indirect costs of a data breach, including lost customer trust and potential legal ramifications, the real question may be: can your business afford to ignore SOC 2?
5. Build a Foundation for Growth
No SaaS business can afford to ignore data security. If you provide cloud services, customers ultimately want reassurance their personal data is safe.
But when is it time to get really serious about data security? It may be tempting to focus on accelerating growth in the early stages of a business and then implementing robust standards such as SOC 2 when the company is more established.
But that can lead to serious complications. After all, good data security requires developing effective structures, processes and controls across the organization. And to get the most out of those processes, you need a culture of information security.
Achieving information security controls, and fostering a good information security culture, is no simple matter at the best of times. But once a company scales, it becomes exponentially more difficult. At that point, you need to overcome a potentially lax InfoSec culture and you need to develop a whole host of new processes on top of existing layers of bureaucracy.
That’s why implementing SOC 2 at the startup phase is so strategically valuable. Building flexible and resilient controls now means that your data security protocols can evolve with the business. And getting leadership is involved from the beginning, and laying out all stakeholder roles and duties clearly and precisely, ensures that information security is part of the company culture, rather than simply an afterthought.
Bonus Tip: Competitive Advantage
Demonstrating SOC 2 allows a company to stand out amongst other players in the market that have not made the decision to undergo the attestation. It gives customers comfort and confidence in their decision to work with software providers and could even be a deal breaker for some customers. The report takes a company to the next level through compliance, as the choice has been made to undergo a SOC 2 audit for the greater good of the company and its customers. With this in mind, a SOC 2 report leads to an increase in sales and deals being closed faster, with the customers that request the report.
SOC 2 Compliance: Check All the Boxes
If you are serious about becoming SOC 2 compliant, there’s no time like the present. Implementing SOC 2 offers a clear competitive advantage and sets your business up for long-term success.
Of course, SOC 2 is only worth doing if you take the time to do it right. To help with your SOC 2 journey, we’ve devised a checklist to ensure you don’t overlook any important details. Be sure to check it out here.
