Data security is critical to doing business in the digital economy. Companies are legally required to comply with a number of different data protection frameworks to handle customer data, including HIPAA, GDPR and PSS DCI. Most of those enterprises, however, don’t move past baseline requirements. This leaves data exposed to risk, and can even damage the confidence of their customer base.
Service Organization Control 2 (SOC 2) compliance is a voluntary system that enables companies to take additional steps to protect client data. It signals to customers that they’re willing to invest more than they need to to keep data safe and secure, ultimately helping to cultivate stronger and longer-lasting business relationships.
What is SOC 2 compliance?
SOC 2 compliance was created by the American Institute of CPAs to help service providers better protect customer data and instill greater trust in their end customers. SOC 2 audits are carried out by licensed auditors who provide an in-depth SOC 2 report to the service organization about how they’re managing their data. This gives them critical, actionable insights they can use to make better-informed decisions about their data protection strategies.
Although SOC 2 compliance isn’t legally required, it’s important for service providers that are entrusted by customers to handle millions of pieces of private demographic information, contact details and online behavior information. Anything that causes customers to lose faith in an organization’s ability to handle that data — be it through a data breach, data loss or theft — can have serious long-term implications for the business. SOC 2 helps ensure that data stays safe and customers remain confident.
Five trust principles of SOC 2 compliance
- Security: Ensures that the proper access controls are in place to allow only authorized users to access critical data. Auditors also test whether the proper security software is in place to protect against malicious actors.
- Privacy: Denotes how client data is handled by the organization, including collection, use and disposal. Personal identifiable information — including anything that could be used to distinguish individuals — is considered critical and in need of extra privacy protections.
- Confidentiality: Access to confidential data is required to be restricted to only those who need to use it. Encryption is one of the recommended methods for maintaining data confidentiality.
- Availability: Helps make sure systems and operations are accessible to users based on the terms of the relevant service level agreement, enabling users with authorization to access the data.
- Processing integrity: Systems, processes and applications need to work the way they’re designed to. To achieve processing integrity, it’s essential that data is properly cleansed and validated to ensure real-time accuracy.
How SOC 2 compliance benefits your business
Service providers are beginning to understand the critical need for data security. Cybersecurity events have been on the rise in recent years, but they have become particularly pronounced since the beginning of the COVID-19 pandemic. Security Magazine found that the incidence of cyberattacks increased by 17% in the first quarter of 2020, a trend that’s likely to continue as businesses transition to more permanent hybrid work models.
It’s clear that data security is essential to protecting consumer data and thwarting black-hat hackers. Here are four of the ways businesses can benefit from SOC 2 compliance:
SOC 2 certification demonstrates to customers that the organization takes data security seriously by taking extra steps to ensure the proper controls are in place to protect data. In the modern digital economy, where customer service is one of the top priorities for consumers, this helps brands build a reputation for trustworthiness among both new and existing customers.
Beyond protecting data, a SOC 2 audit also helps organizations gain better visibility over their data stores. Data visibility helps them eliminate data silos to make their operations and processes more efficient, while at the same time leveraging their existing data for better business outcomes. All of this enables organizations to provide better quality and more efficient service to customers.
Organizations are making an investment when they decide to hire SOC 2 auditors. A SOC 2 audit can cost anywhere between $10,000 and $100,000, depending on the type, according to AuditBoard. But the combination of the above benefits helps service providers generate new business and optimize current customer relationships, both of which lead to an increase in annual revenue.
The difference between SOC 2 types I and II
There are two different types of SOC 2 compliance, each ranging in cost, duration and scope. Here are the two types and what to know about each:
- SOC 2 type I: Type I reports provide details about an organization’s systems and internal control designs to make a judgment about their suitability to protect and secure data. Type I reports differ from type II in that they tend to provide attestation at a specific point in time, making them slightly more limited in their scope.
- SOC 2 type II: Type II reports are similar to type I with the key difference being that they provide attestation information across a 6-month period. They are consequently considered more comprehensive than their counterparts and provide a more detailed account of a service provider’s internal control systems.
The SOC 2 audit process
Although the process of conducting a SOC 2 audit can be long and cumbersome, the process itself is actually quite simple. Here are the four steps to completing a SOC 2 audit, according to Dash:
- Security questionnaire: The SOC audit begins with the auditor asking relevant members of the organization questions about the company’s data protection policies, procedures and infrastructure. The purpose here is to develop an understanding of how well attuned to data security standards the team is.
- Gathering evidence: Auditors then ask for proof that the security policies and procedures actually exist. They use this information to understand the inner workings of specific security systems.
- Evaluation: Auditors synthesize the documentation and information they’ve gathered and begin assessing it. If they uncover any security gaps, the organization may be required to take remedial action before the process continues. Auditors may follow up with team members to ask clarifying questions or to seek additional information about their data security.
- Report creation: Once the auditor has completed the evaluation portion of the process, they will submit a SOC report with their final assessment of the organization’s security standards. Organizations can then use this information to make adjustments to their security infrastructure as needed to become SOC 2 compliant.
Sufficient data security starts with having the right team of experts on your side. Our team of cybersecurity professionals at Alert Logic works with enterprises across industries to learn their business and provide the technology, knowledge and expertise for their unique security needs. We work to provide 24/7 protection to organizations to ensure they have the most appropriate response plan to confront whatever threats arise.
Reach out to learn about our SOC 2 compliance solutions.