What SaaS Businesses Need to Know
If your organization stores customer data in the cloud, SOC 2 compliance is table stakes.
In the last two years alone, cloud-based cyber attacks more than doubled — even though SaaS spending grew just 18%.
While these numbers are merely a correlation from a statistical standpoint, it does indicate that if your business stores customer data in the cloud, it’s more important than ever for your business to take measures to secure that data. Especially given SaaS spending is soon expected to increase an additional 36%.
A SOC 2 certification is a foundational step that will help every service provider reduce security risks. Below is a guide to SOC 2 compliance requirements and certification.
What Is SOC 2?
SOC 2 is an independent audit report that evaluates the security controls a tech service business uses to protect the data they process in the cloud. Possession of a SOC 2 report is considered table stakes in the SaaS industry, as the answers to most security questions a customer may have about their business’s security posture can usually be pulled from this report.
SOC 1 vs. SOC 2 vs. SOC 3
“SOC” stands for “System and Organization Controls” and was created by the American Institute of Certified Public Accountants (AICPA). SOC 2 is one of three SOC reports, each with different purposes and/or levels of transparency:
- SOC 1. Used to audit internal controls relevant to a customer’s financial systems. Report usage is “restricted,” meaning its use is limited to auditors, the service organization, and authorized users.
- SOC 2. Used to audit the overall management of customer data. Report usage is also “restricted” the same way SOC 1 is.
- SOC 3. The same as SOC 2, but the report is simplified and publicly available to increase transparency.
Why SOC 2 Compliance Matters
SOC 2 compliance isn’t a legal requirement for a tech business. However, having a SOC 2 report is a common compliance objective for service providers that store their customers’ data in the cloud because it’s a necessity from an assurance (and therefore competitive) perspective.
For many small to medium-sized operations that store marginally-sensitive data (for example, information that’s already publicly available), a SOC 2 report usually provides enough assurance of their controls and procedures to their customers.
However, for businesses whose data is considered sensitive (health data, for example), a SOC 2 report is the minimum a business should have in order to assure their customers they’ve taken steps to protect their data.
Please contact us for more details and we will assist you step by step to get you certified.
