Nowadays, businesses are storing vast amounts of customer data, making security a primary concern. One of the compliance standards that have been established to ensure the safety of data is SOC 2. Here is a brief overview of SOC 2 with a few tips on how to become compliant.
What Is SOC 2?
SOC 2 stands for System and Organization Controls for Service Organizations. This is a framework used to check if a service organization’s practices and controls are effective at protecting the privacy of its client data. The SOC 2 standard applies to all businesses providing services involved with processing and storing customer data.
SOC 2 was developed by the American Institute of Certified Public Accountants to address increasing concerns over the privacy and security of client data. This framework is an improvement of the Statement on Auditing Standards No. 70: Service Organizations (SAS 70). The SAS 70 was developed to guide the financial audits of 3rd party service providers like hosted data centers and insurance claims processors.
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What Do SOC 2 Reports Cover?
SOC 2 reports cover five trust service categories:
- Security: The periodic evaluation of security policies and measures involved in protecting organizations from security breaches that lead to unauthorized leaking of sensitive information.
- Availability: Information and systems should be made available to ensure the objectives of an organization are met.
- Confidentiality: Confidential information should be well protected from security breaches to ensure organizational effectiveness.
- Processing Integrity: The processing of systems should be thorough and accurate to ensure organizational objectives are achieved.
- Privacy: Client information should be collected, utilized, disclosed, and erased securely.
What Are The Benefits Of Being SOC 2 Compliant?
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Cost-Effectiveness
While you may think that audit costs are high, the fact of the matter is that data breaches are more costly. For example, in 2018, the cost of a single data breach cost an average of $3.86 million. By being SOC 2 compliant, you are reducing your chances of security breaches.
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Customer Demand
Many customers today are looking to work with service providers who are dedicated to protecting their data. A SOC 2 report ensures you remain in business because you are committed to meeting customer demands. Additionally, a SOC 2 report will give you an edge over your competitors who are not compliant, and this will enhance your business’s reputation as a reliable authority.
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Value
A SOC 2 report will provide you with invaluable insights into your business’s security and risk status. It also helps you employ effective internal governance, vendor management, and regulatory oversight. With a SOC 2 report, you also have peace of mind that your networks and systems are secure.
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How Does One Become SOC 2 Compliant?
Becoming SOC 2 compliant is quite a complicated process involving a lot of well-calculated measures. The first step is to appoint SOC 2 team members. Some of the positions that will be best suited for your team include:
- Chief Technology Officer
- Chief Security Officer
- Chief Risk Officer
- SOC 2 Project Manager
- IT Auditor
- Risk Manager
- Information Security
The next step towards SOC 2 compliance is setting your goals. Determine what report you want — Type 1 or Type 2. You should also determine if you want SOC 2 attestation for one product or service, or for your whole organization. It is also essential to determine your scope. In identifying your limits, you need to identify the trust services categories that apply to your business.
The next phase involves organizing your materials. After choosing the trust service categories that apply to your business, determine the controls that apply to these categories. Check whether these controls are adequate and if they resolve any issues. You should also gather documents around the five trust categories to prove your compliance.
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When you gather all the evidence, perform a self-audit trial to identify and fill gaps that you notice in your findings. Next, set up security alerts to prevent you from falling out of compliance. At this stage, you are now ready for a SOC 2 audit.
The American Institute of Certified Public Accountants stipulates that only independent Certified Public Accountants should conduct a SOC 2 audit. Therefore, you should work with an auditor who meets these qualifications. For complex records, your auditor can request the assistance of an independent SOC 2 specialist.
EndNote
In this modern age of high cyber-crime activity, many businesses are faced with the challenge of securing their client data. One of the frameworks that have helped tighten data security in organizations is SOC 2. SOC 2 is based on five categories that ensure the safety and privacy of customer data. The steps of being SOC2 compliant are quite straight-forward. The main benefits of getting this compliance include avoiding huge losses caused by data breaches, satisfying customer demands, and gaining valuable insight into your business’s operational and security policies.
