Comment: In today's cloud-based world, data security and privacy are more important than ever. As companies increasingly rely on cloud services to manage sensitive information, compliance with standards such as System and Organization Controls 2 (SOC 2) has become a priority.
SOC 2 compliance goes beyond simply meeting regulatory requirements, it demonstrates to customers that a company has implemented robust security controls. For SaaS providers operating in the cloud, achieving SOC 2 compliance enhances security and also provides a competitive advantage. Many SaaS providers proudly display their SOC 2 certification on their websites, indicating trustworthiness to potential customers. CISOs and other security professionals evaluating vendors need to look for SOC 2 compliance as evidence of their ability to move forward and trust their corporate data to the SaaS provider. In addition, obtaining this certification can greatly simplify vendor surveys during purchasing processes, saving time and effort.
SOC 2 compliance established
SOC 2, an auditing standard created by the American Institute of Certified Public Accountants (AICPA), aims to ensure that technology service providers manage data securely, and protect the privacy and interests of their clients. It sets out specific standards that service organizations – especially those working in technology and cloud services – must meet when handling customer data.
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The AICPA based SOC 2 on these five criteria:
Any organization that stores, processes, or transmits customer data — especially technology and cloud-based services like SaaS providers — should prioritize compliance with SOC 2. It's especially critical for companies that handle sensitive customer information or data subject to regulatory oversight, such as Financial institutions, healthcare providers and legal firms. Achieving SOC 2 compliance reassures customers that the service provider can protect their data and uphold strict security standards.
For cloud-based SaaS providers, SOC 2 certification helps attract new customers and also helps retain existing customers and expand into regulated industries that require formal security controls. So when should companies like cloud startups start getting SOC 2 certified?
The benefits are clear, because it shows artistic maturity and responsibility. However, the challenge lies in the time, effort and resources needed to complete the process, something startups often lack. The short answer: If a company already has customers who trust it with corporate data, it's worth pursuing. For smaller businesses, passing the audit process tends to be less difficult, which is an important asset when obtaining cyber insurance.
For SaaS providers operating in the cloud, SOC 2 compliance has important implications. Unlike on-premises infrastructure, where organizations have full control over physical and network security, cloud-based environments require shared responsibility between the cloud provider (such as AWS, Azure, or GCP) and the SaaS organization. This combined model adds layers of complexity to achieving and maintaining SOC 2 compliance.
Cloud-native SaaS providers must secure their code and applications as well as configure and manage the underlying cloud infrastructure. This requires implementing appropriate controls across many areas that require specialized cloud expertise, such as identity and access management (IAM), data encryption, monitoring and logging, and vendor management.
With the growth of cloud computing, many SaaS organizations now operate in multi-cloud or hybrid environments, which increases the complexity of SOC 2 compliance by introducing additional layers of complexity.
The next step is to pass the audit. The SOC 2 certification process requires the following four stages:
Achieving SOC 2 compliance can take several months, depending on the organization's preparedness and the scope of the audit. The process of auditing and maintaining SOC 2 compliance requires multiple steps. However, adopting some basic best practices can help organizations prepare for an audit and improve a company's overall security posture:
Achieving SOC 2 compliance represents an important milestone for any cloud-based SaaS provider. It shows that the organization is prioritizing data security, while also opening up new business opportunities and building customer trust. Although it's a difficult process, by adopting best practices — such as automating security monitoring, maintaining comprehensive documentation, and conducting regular internal audits — companies can simplify the journey and achieve greater success.
Shira Shamban, Co-Founder and CEO of Solvo
SC Media Perspectives columns are written by SC Media's trusted community of cybersecurity subject matter experts. Each contribution aims to provide a unique voice to important cybersecurity topics. The content strives to be of the highest quality, objective and non-commercial.
