With cyber threats on the rise, organizations are increasingly seeking robust frameworks to protect their sensitive information. One such framework is SOC 2 compliance. But who needs SOC 2 compliance, and why is it so critical?
Let’s first understand the difference between SOC 1 and SOC 2.
SOC 1 vs SOC 2: What’s the Difference?
SOC 1 and SOC 2 are two independent standards that cover different elements of your business, however SOC 2 is not a sequel to SOC 1. SOC 1 relates to financial controls. SOC 2 is all about data and technology. Specifically, SOC 2 is an independent standard for cloud-based data storage. If you operate as a SaaS provider, SOC 2 may well be your go-to solution for data security.
Why Does SOC 2 Matter?
SOC 2 is a reporting framework created by the American Institute of CPAs (AICPA). As one might expect from an accounting organization, SOC 2 comprises both monitoring and auditing.
Primarily, SOC 2 compliance is essential for service organizations that handle customer data. This includes cloud service providers, SaaS companies, and any business that processes or stores information on behalf of clients.
By making your company SOC 2 compliant, you achieve two essential objectives. First, SOC 2 provides an independent standard to help you achieve data security, ensure the integrity of your data systems and maintain data privacy. These are all important goals in themselves, however SOC 2 compliance also ensures that you meet regulatory requirements around data protection and helps prevent damaging data breaches, as well as its ripple effects.
Second, SOC 2 specifies reporting terms. That is, by following SOC 2 protocols, your business has a clear framework for ensuring data integrity and reporting on your data security to the relevant auditor.
Of course, these goals are connected. You need to take effective SOC 2 data protection measures to comply with auditing requirements. At the same time, independent auditing may identify any lapses or shortcomings in your compliance, enabling you to develop more robust systems.
For many companies, getting SOC 2 compliant is not just a necessity but also a competitive advantage. In industries like healthcare, finance, and technology, clients often mandate SOC 2 compliance as a prerequisite for doing business. Additionally, SOC 2 compliance can enhance an organization’s reputation, making it more attractive to potential clients and partners who prioritize data security.
It’s All About the Report
SOC 2 helps you comply with regulations and maintain the trust of your customers. However, it doesn’t just happen.
A comprehensive SOC 2 review is a critical step in the compliance process. This review assesses the organization’s controls across five key Trust Service Criteria: security, availability, processing integrity, confidentiality, and privacy. The review involves a thorough examination of policies, procedures, and technical safeguards in place. By undergoing a SOC 2 review, organizations can identify potential vulnerabilities and take corrective actions to mitigate risks.
Ultimately, complying with SOC 2 involves submitting a comprehensive and accurate report to your auditors. Here is the flip side of effective information security: the report involves a lot of very fine-grained detail.
This is because you need to carefully monitor all possible disruptions and breaches and you need to provide full information about multiple elements of your IT infrastructure. Is the system secure? Do users have access to uninterrupted service? Do you have full user logs to account for anomalies?
SOC 2 Then and Now
Traditionally, SOC 2 has been an exhausting and tedious process that takes a lot of time and effort, and if you fail to account for all relevant data, you may not satisfy your auditors.
The process of getting SOC 2 certified involves several steps. Organizations must first determine the scope of the audit and define the Trust Service Criteria relevant to their operations. Next, they need to implement and document controls that meet SOC 2 requirements. Engaging with a reputable auditor to conduct the SOC 2 review is crucial. The auditor will evaluate the effectiveness of the controls over a specified period, typically six months to a year. Upon successful completion of the audit, the organization receives a SOC 2 report, which it can share with clients and stakeholders as proof of its compliance efforts.
Fortunately, new technologies have transformed SOC 2 compliance, and rather than wasting countless hours monitoring any number of devices and network connections, it’s now possible to automate the process. Crucially, the best technologies automatically collate all the relevant monitoring data and prepare it for audit.
Effective Compliance Means Planning for the Future
The benefits of SOC 2 are clear: enhanced customer satisfaction, rigorous security, and an effective audit and monitoring process. Technology is finally available to make compliance efficient and cost effective, therefore SOC 2 is an obvious choice for any company that provides cloud-based technologies.
However, companies should understand that SOC 2 is not a simple box ticking exercise. Each company’s SOC 2 specifications will look subtly different and as your business expands, the compliance demands become more complex. In other words, businesses need a flexible, responsive process – based on the most suitable technology – to ensure they remain SOC 2 compliant as technical and regulatory demands change.
