The demand for public cloud services, Software as a Service (SaaS) in particular, is increasing exponentially. As a result, the SaaS market is projected to grow at a Compound annual growth rate (CAGR) of 18% in the coming years, culminating in a market value of $623 billion by 2023.
As this demand increases, there will be numerous opportunities for both existing SaaS providers and new entrants. However, to capitalize on the opportunities available in this industry, SaaS companies must take a proactive approach regarding data security. In light of the increasing cybersecurity threats and repercussions involved with failing to protect consumer data, organizations are cautious with which third party companies they allow to handle their data.
Today, there are many data security measures that organizations that handle consumer data must adhere to. For organizations that use cloud services to store such information, including SaaS companies, SOC 2 compliance is essential. In the coming years, SOC 2 compliance will play a significant role in the success of SaaS companies.
In this article, you will learn all about SOC 2 and find out why it is crucial for your SaaS company to be compliant.
What Is SOC 2?
In the age of big data, information is one of the most valuable things in the world. Today, businesses rely on customer information in order to provide quality services. As customers interact with businesses, they at times share personal information such as:
- Names and contact information
- Credit card information
Customers share this data trusting that organizations have taken the necessary security precautions to safeguard it. If this data falls into the wrong hands, they face the risk of identity theft and financial loss. Such data breaches also expose companies to unnecessary liabilities and have a negative impact on their brand image.
This is where SOC 2 comes in. SOC 2 is a procedure for auditing service providers to ensure that they manage and store client and consumer data safely. It was developed by the American Institute of CPAs (AICPA). SOC 2 compliance assures your clients that you have well-defined information security policies and procedures, and that you follow them.
SOC 2 assesses your organization's security policies and procedures based on five trust service principles. These are:
- Security- How safe is your system from unauthorized access?
- Availability- Is the system operational and available for use as agreed?
- Processing integrity- Does the system provide complete, accurate, timely, valid, and authorized processing?
- Confidentiality- Does confidential information have the appropriate protection?
- Privacy- Is your process of collecting, using, storing, disclosing, and destroying personal information in line with the client's privacy notice?
How to Become SOC 2 Compliant
After a successful SOC 2 audit, your company will become SOC 2 certified, which will earn you trust with clients. However, to pass the audit, you must:
Before being audited, it is vital that your organization understands SOC 2 and what the auditing process entails. This can be achieved by taking a SOC 2 scoping and readiness test, which should include:
- An overview of the framework used for SOC 2 auditing
- Assessment of your security policies, process, and procedures to identify issues that need to be addressed before the audit
- A strategy for achieving SOC 2 compliance
Have the Necessary Documents Ready
There are many documents that are crucial during SOC 2 audits. These include a list of security policies and procedures for access control, change management, data backup, and incident response.
Take Remedial Measures
Once you have identified shortcomings in your security framework, come up with remedial measures, and implement them immediately. For efficiency, categorize them into security measures and operational measures.
With security measures, you will have to:
- Reconfigure your IT framework
- Set up two-factor authentication solutions
- Set up tools to scan for vulnerabilities and monitor and protect applications
- Put in place solutions to monitor file integrity
When it comes to operational measures, the goal is to conduct security awareness training, perform risk assessments, and test the incident response plan.
Perform a Dry Run
A dry run is a comprehensive test on your security framework. For this test to be beneficial, approach it as you would expect an auditor to assess your company. If the results are not satisfactory, go back to the previous steps. Repeat this until you’re confident your company is ready for an audit.
Why Should You Get SOC 2 Certification?
Companies are increasingly becoming overwhelmed with the amount of data they are required to handle. This is what is fuelling the demand for cloud services. Though SOC 2 compliance is not mandatory for SaaS vendors, it can give your company a significant competitive advantage.
As cybersecurity threats increase and evolve, SOC 2 compliance demonstrates to clients that your organization values their security, which will earn you their trust. Undoubtedly, such a reputation will only serve your brand well in the long run.