What Is SOC 2 Compliance And Why Is It Important For Your Business?
Information security is essential for every organization, especially those that provide technical solutions and services to their clients. These companies often bear the responsibility to protect highly sensitive data on behalf of others. As such, a security incident can cause major damage to brand reputation and even leave your organization exposed to litigation.
When clients are placing a great deal of trust in you, you cannot afford to let them down with lax security controls and processes. That’s why you need regular auditing for all your systems, as well as the certifications to prove your compliance and security efforts. For SaaS companies and other technical service providers, SOC 2 is one of the most important of all.
What is SOC 2 compliance?
The term SOC 2 stands for Systems and Organizations Controls version 2. It is not mandatory, and neither is it a law or regulation. But it is in practical terms, not optional.
SOC 2 is a technical auditing process developed by the American Institute of CPAs (AICPA). It governs the trust services criteria pertaining to any organization that delivers services online. By contrast, SOC 1 only applies to internal control over financial reporting (ICFR). There are five trust services criteria: privacy, security, availability, confidentiality, and process integrity.
SOC 2 reports are unique to every organization, since they are designed to align with specific business processes and systems. As such, each organization will have its own set of controls and policies to achieve compliance with the various trust principles. This contrasts with PCI-DSS compliance, for example, which has very specific technical and policy requirements.
Earning a SOC 2 certification is a practical necessity for almost any technology company, and it provides many important benefits. We’ll look at some of the most significant below.
#1. Monitor known and unknown threats
Achieving SOC 2 compliance validates your efforts to secure your and your clients’ data. The security principle, for example, outlines the various layers of protection you need to implement to mitigate against both known and unknown threats. For example, robust access controls can greatly decrease your susceptibility to social engineering attacks, while web application and network firewalls can prevent many other potential security breaches.
SOC 2 compliance starts with establishing a baseline defining what normal activity looks like. Any deviations from these activities will be picked up by your intrusion detection system, giving you a chance to mitigate potentially dangerous events before it’s too late.
#2. Stay informed with automated alerts
When a security incident occurs, and it’s just a matter of time before one does, it’s essential that you know about it as soon as possible. That way, you have plenty of time to prevent any damage from happening. To achieve compliance, SOC 2 requires organizations to configure automated alerts for potentially risky events, such as unauthorized file transfer activities and unusual account access requests. These controls and alerts must align with your unique cloud environment and risk profile, hence the technical parameters of SOC 2 compliance look very different from one company to the next.
#3. Maintain detailed security audit trails
Simpler cyberattacks, such as mass-produced email phishing scams, are easy to prevent, and the spam filters usually ensure they never see the light of day. But it’s the more sophisticated attacks you need to worry about. These include targeted social engineering scams, advanced persistent threats (APTs), and various others. To meet the demands of SOC 2, especially with regards to security and process integrity, it’s essential that you have a way to learn about the root cause of an attack.
Maintaining comprehensive security audit trails that provide deep contextual insight give you the threat intelligence you need to carry out actionable forensics. If you’re SOC 2-compliant, you should have visibility into critical factors like attack origins, vectors, targets, and more.
#4. Reduce reputational and brand risk
As a universal security standard, but one that can adapt to a wide range of unique business environments, achieving SOC 2 compliance provides a highly effective way to mitigate risk. It also lets you innovate quickly in the confidence of knowing that your business is ready to face new and future cyberthreats.
Achieving SOC 2 compliance serves as proof that your organization takes information security seriously, and that’s a key selling point for almost any potential client. As such, it’s essential for protecting your brand’s reputation, retaining existing business, and securing lucrative new contracts.