The average cost of a data breach 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, and you need to be SOC 2 compliant. Here’s what you need to know about SOC 2.
SOC 2 audit can only be conducted by an independent certified public accountant or organization. The auditor is required to follow some outlined procedures when planning and conducting 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 is performed, the auditor gives a report which generally contains an opinion on how the entity’s controls match their 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 controls or ignore those that don’t fit your business. Below is a brief description of the five trust categories.
Security: This is the primary criteria. Here, 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: Here, an assessment is conducted to check whether your end-to-end processes guarantee data integrity. This category confirms that your processes and applications don’t accidentally manipulate, erase, delay, or provide misleading information.
Privacy: This focuses on ensuring that customer information is collected, used, retained, disclosed, and erased in conformity with the privacy agreement. You have to make sure 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 not only benefits your clients by protecting their data but also helps your organization in multiple ways. Here’s why you need to be compliant.
1. Customer Demand
In light of recent cyber breaches, every customer wants to protect their data. 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 has the potential to 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. By demonstrating that you are SOC 2 compliant, customers will pick you over your non-compliant rivals.
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.