What is SOC 2 And Why Do Businesses Need it 1

The average data breach cost will surpass $150 million by the end of this year. Today, cybercriminals are using sophisticated methods to access people’s personal information. The tactics used by these digital intruders are hard to detect and are increasingly causing more damage. If you are an entity that handles customer data, you have to keep it safe from these malign actors. One of the best ways to protect valuable customer information is by complying with Service Organization Control 2 (SOC 2) requirements.

SOC 2 is a framework that details how an organization should manage customer data and protect the organization’s interests. It was developed by the American Institute of CPAs (AICPA) to stem data breaches and promote information privacy. Businesses use the SOC 2 criteria to gauge whether their current controls are sufficient to protect their customers’ information. If you offer software as a service, cloud computing as a service, data hosting solutions, or your entity handles any customer information, you need to be SOC 2 compliant. Here’s what you need to know about SOC 2.


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SOC 2 audit can only be conducted by an independent certified public accountant or organization. The auditor must follow some outlined procedures when planning and executing the audit. There are two types of audits; one is carried out on a specific scheduled date, while the other is done over a specified period, not less than six months. After an audit, the auditor gives a report generally containing an opinion on how the entity’s controls match its requirements.

five SOC 2 trust principles. Unlike other compliance standards like PCI DSS, which have strict compliance requirements that must be followed to the letter, SOC 2 offers some flexibility. With SOC 2, it’s up to the organization to decide how to meet the trust principles. You analyze all the SOC 2 requirements, determine which ones are relevant to your business, and then create controls to meet those requirements. You can add extra rules or ignore those that don’t fit your business. Below is a brief description of the five trust categories.
  • Security: This is the primary criterion. Your organization must show that it has taken steps to protect your customers’ data against unauthorized access and unsanctioned disclosure. You should also demonstrate that you have secured your organization’s systems to prevent damage, which can compromise data integrity or prevent you from meeting your business objectives.
  • Availability: This checks whether your systems and services are readily available for use and whether they can be utilized to achieve your organizational objectives. You are required to back up data and have a data recovery plan.
  • Processing Integrity: An assessment is conducted to check whether your end-to-end processes guarantee data integrity. This category confirms that your methods and applications don’t accidentally manipulate, erase, delay, or provide misleading information.
  • Confidentiality: This principle ensures all sensitive information is stored and managed correctly and securely. Encryption tools are utilized here to ensure that any data stored or in transit can’t be read without permission.
  • Privacy: This focuses on ensuring that customer information is collected, used, retained, disclosed, and erased in conformity with the privacy agreement. You must ensure you can effectively monitor and manage all the data you collect.

Why Your Business Needs to be SOC 2 Compliant

Being SOC 2 compliant is highly beneficial. It benefits your clients by protecting their data and helps your organization in multiple ways. Here’s why you need to be respectful.

1. Customer Demand

Every customer wants to protect their data in light of recent cyber breaches. If your entity handles customer information, the customer will want to know if you have adequate measures to protect their data. SOC 2 compliance shows the client that you are the right company to work with.

2. Cost Saving

A single cyber attack on your organization can put you out of business. Even if it doesn’t cripple your operations, it can hurt you in the long term as clients won’t trust you with their data. By being compliant, you will keep cyber criminals at bay, protect your assets, and save money in the long term.

3. Competitive Advantage

Businesses are going to extra heights to win over customers, and you need to differentiate yourself to beat your competitors. One of the best ways to win over a client is by showing them why they should trust you. Customers will pick you over your non-compliant rivals by demonstrating that you are SOC 2 compliant.

4. Valuable Insights

SOC 2 compliance allows a business to gather useful insights into its operations. The compliance process can help you identify hidden risks, inefficient processes, and areas that should be improved. You can use this information to make your organization better.

Bottom Line

Every business that handles client information can benefit tremendously from becoming SOC 2 compliant. SO2 Compliance will protect your organization from data breaches, give you an edge over your competitors, provide you peace of mind, and save you money in the long term.