SOC 2 compliance: What it is and how to achieve it
With data breaches and exposures seemingly always in the news, many organizations have heightened concerns around information security. After all, a single data breach can cost millions.
One of the best ways to minimize security worries is to become compliant with SOC 2 guidelines by undergoing a SOC 2 audit. Having a SOC 2 report on hand demonstrates your commitment to security, which provides plenty of advantages.
Below, we’ll explore the benefits of SOC 2 compliance, discuss how to meet various SOC 2 guidelines, and conclude by walking you through the process of getting a SOC 2 audit.
What is SOC 2 compliance?
Systems and Organization Controls 2, or SOC 2, is a security framework consisting of several compliance requirements that deal with how companies handle customer data stored in the cloud.
It covers every process that might deal with that data and the accompanying level of security.
SOC 2 is also the name for the audit procedure — usually performed by a Certified Public Accountant firm — to check that a company is compliant with SOC 2 criteria.
There are two types of SOC 2 audits:
- Type I: These assess systems and internal controls at a specific point in time.
- Type II: These assess systems and internal controls over a three to 12 month period.
Type II audits are more valuable since they test everything over time and take up more time and resources.
SOC 2 is not to be confused with a security operations center, also called a SOC and staffed by SOC analysts. That said, these individuals play a significant role in helping you become compliant with SOC 2.
Speaking of compliance, organizations can become compliant in SOC 2 by undergoing a formal SOC 2 audit.
You won’t receive a SOC 2 compliance certification at the end, as it doesn’t actually exist. Instead, the auditor hands you a SOC 2 audit report explaining their opinion of your compliance with the SOC 2 trust principles you specified.
Achieving SOC 2 compliance can be a long and laborious process, but the benefits are well worth it. SOC 2 compliance demonstrates your commitment to security and control in all of your business systems and operations.
The benefits of SOC 2 compliance
Becoming SOC 2 compliant can require a significant investment of your time and financial resources. However, compliance offers plenty of benefits your firm can enjoy for years to come.
Here are some of the many advantages you’ll see by complying with SOC 2 in your organization.
Protects your brand’s reputation
Did you know that there were 1,001 data breaches in 2020 alone? Compare that to 2010, which saw just 662 breaches. Cybercrime has nearly doubled in the last decade.
Just one of those breaches can put thousands of customers at risk and drive them away from your brand.
Accidental data exposures were frequent, too, often due to weak internal cybersecurity controls and processes.
For example, there were some high-profile cases in recent years where third-party social media analytics apps left massive databases unprotected and accessible online.
Because of these and other exposures, around 156 million people had their data exposed to the public in 2020.
It doesn’t matter how excellent your brand is or how loyal your customers are. If you get lax about security and experience a data breach or exposure, customers will leave your company in droves.
Fortunately, SOC 2 processes and controls in your organization minimize the chance of these events occurring, thus protecting your brand from their devastating consequences.
Distinguishes you from the competition
Any company can say they make the customer’s safety and security a top priority. However, customers don’t care much for these claims without the evidence to back them up.
That’s exactly what a formal SOC 2 audit can provide you.
Reaching and maintaining SOC 2 compliance demonstrates that you actually do have top-notch security. It also shows to customers that you are committed to keeping their data safe. This stays in the customer’s mind and might just be what they need to hear to pick your company over a competitor that lacks a SOC 2 report.
Attracts more customers
Per the last point, you stick out in the customer’s mind when they’re browsing options. Some customers care about security more than others. This is especially true for larger companies since they have much more at stake than smaller organizations in terms of security.
By becoming compliant with SOC 2 and getting a report, you can attract those security-conscious prospects, boosting your sales.
In fact, prospective clients who are certified in SOC 2 will often only work with your firm if you, too, have a SOC 2 report for certain trust principles.
You’ll also build trust with customers much faster. Stronger trust creates more long-term customers, increasing customer lifetime value and growth opportunities while cutting marketing costs.
Improves your services
A SOC 2 audit doesn’t just tell you where security can and should be improved. It also shows you ways you can streamline your organization’s controls and processes based on information about customer cybersecurity risks.
Because of this, you can make security improvements in a way that also increases efficiency within your organization. You’ll have more time and resources to invest in your products and services, heightening their quality and improving customer satisfaction.
Accelerates progress toward other security certifications
Putting policies, procedures, and controls in place that put you in compliance with one rigorous security standard will make it easy to go after other compliance standards or security certifications.
For example, SOC 2’s compliance criteria shares plenty of requirements with ISO 27001 guidelines.
If you get a SOC 2 report across the trust principles, going after your ISO 27001 certification will take less time and money.
ISO 27001 is preferred for clients outside the U.S. If you do business domestically and internationally, the SOC 2 and ISO 27001 combination can serve you well.
SOC 2 compliance offers industry-specific benefits to a range of verticals.
For example, the financial services sectors face many challenges in security when it comes to internal controls — they’re responsible for people’s money, after all.
A SOC 2 report in all five trust principles helps ensure customer data is private, secure, and confidential while allowing customers timely access to their information.
Managed services firms offer another example of a specific industry that you can obtain through a SOC 2 report. Companies entrusting their information systems to these managed services firms will be reassured if they see SOC 2 reports confidently asserting that the firm adheres to rigorous security standards.
The five trust principles of SOC 2 compliance
There are five core trust principles of SOC 2 compliance.
Firms need not pursue compliance in all five of these — they can pick and choose. Of course, you ideally want to comply with all five at some point.
That said, many firms may not have the resources to bring their systems and controls into compliance with every trust principle.
In that case, it’s best to pursue the trust principles that you’re closest to achieving or those that will have the most significant positive impact on your organization. You can always go for the others later.
With that in mind, here are the five trust principles of SOC 2.
Security is concerned with protecting information and system resources against unauthorized access. Firms can use two primary types of controls to help meet the Security principle.
- Access controls: Access controls prevent misuse of software or theft/removal of data by keeping people who shouldn’t be accessing certain systems out.
- IT security tools: IT security tools protect against potential external breaches. Two-factor authentication is a simple example of an IT security tool.
Availability determines whether people in the organization can use systems to perform their purposes and advance toward company objectives.
Some examples of processes and controls that contribute to availability include backups, disaster recovery, and business continuity planning.
Each of these minimizes downtime to maintain availability if negative events were to occur, such as a natural disaster destroying a data center.
In addition, a firm that meets the availability principle is able to meet the level of service they lay out in their service-level agreements.
3. Processing integrity
Processing integrity is used to determine if your systems and processes achieve their purposes completely, validly, accurately, and timely.
It’s not the same as data integrity. A system can work properly with incorrect data. Let’s look at an example to explain the difference.
Imagine you run an e-commerce company, and a customer places an order. A firm that meets the processing Integrity principle will ensure that the customer is able to place that order reliably — from initially browsing the site to checking out — and that it will arrive in a reasonable timeframe.
However, perhaps the customer enters the wrong address. This is an example of poor data integrity. You may still meet the processing integrity requirement in that your system works as it’s supposed to, delivering that item to the address specified — it just won’t arrive at the correct address.
Confidentiality examines controls dealing with access to and disclosure of the sensitive data an organization stores — usually pertaining to the business itself. It can help lay out which individuals can access what data and how that data can be shared.
Thus, it can make sure that only certain people in an organization can view specified documents. For example, confidentiality ensures that people outside the organization can’t access or see legal documents or intellectual property.
This SOC 2 security principle looks at how organizations handle the sensitive personal information of customers — rather than business information — and guards it against unauthorized users. It also ensures that the way a system uses that data complies with privacy policies at the firm and the American Institute of Certified Public Accountants’ Generally Accepted Privacy Principles.
Name, physical address, email address, and Social Security number are a few examples of information that falls under this trust principle. Data like health, race, and sexuality may be pertinent to privacy for some companies, too.
How to get a SOC 2 compliance audit
So far, we’ve explored the core principles of SOC 2 compliance and the many benefits of achieving it.
Now, let’s look at how you can get a report demonstrating your SOC 2 adherence to gain these advantages.
1. Get an initial audit from outside auditors
First, you need to bring in an unbiased third party to gain an objective and expert understanding of your current systems.
For that, you can rely on auditors. In particular, Certified Public Accountant firms with auditors specializing in information systems can perform these procedures. These auditors adhere to rigorous standards set by the AICPA to ensure top-notch security.
Your auditors will start by asking you a barrage of questions about your systems. They’ll also examine them in action.
When the auditors are done running these procedures, you’ll get an initial audit report on your current systems and internal controls.
This report shows you what kinds of changes you’ll need to make to achieve SOC 2 compliance.
2. Pick which criteria you’d like an audit report for
It’s now time to evaluate which of the five trust principles you’d like to become SOC 2 compliant in.
Remember, you don’t need to become compliant with all five trust principles if you don’t want to.
If your firm has limited resources, you may consider pursuing the one or two trust principles you’re closest to achieving compliance with based on the report.
Alternatively, you can pursue those most vital or promise the most potential value based on your company and industry.
In many cases, this will be privacy and security first. However, if you’re close to fulfilling those, consider adding something such as availability or processing integrity.
3. Create the roadmap to your SOC 2 compliance and follow it
You’ve run your initial audit, received the results, and determined which criteria you’d like to pursue for your formal SOC 2 audit.
Next, you’ll work on a roadmap that will lead you to SOC 2 compliance with these criteria. Once you’ve constructed that roadmap, you’ll begin working on your SOC 2 systems and processes.
Building out your new processes and systems can take several weeks and require cooperation across several functional areas to ensure that systems comply with SOC 2.
Upon finishing your SOC 2 work, make sure that everyone in the organization starts following them to a T. Doing so gets everyone to build good security habits, which will pay off when you bring your auditors back to do the formal SOC 2 audit.
It’ll also further strengthen your firm’s security.
Also, you must maintain detailed documentation about everything. You can use your painstaking documentation as evidence of your adherence to the standards set by SOC 2.
4. Undergo the formal SOC 2 audit
After several months of working on your SOC 2 compliance, your auditor will come back in to perform the formal audit and see how you did.
Once again, your auditor will examine your systems and ask you plenty of questions about them. Assuming everything goes well, you’ll receive a SOC 2 report for all your desired trust principles at the end of the audit.
5. Monitor and prepare for recertification
When it comes to security, the work never ends. Cyber threats are constantly evolving. You have to bring in auditors every year to check that you’re still compliant with SOC 2.
The continuous work will pay off, though, when you can flaunt your firm’s adherence to the most rigorous standards of security.
As more data moves to the cloud, SOC 2 compliance and certification offer a long list of compelling benefits. The faster you can become compliant, the sooner you can bolster customer trust and stand out in the marketplace.
Getting there the usual way can take months, typically — but not with Secureframe. We’ve streamlined the process of achieving SOC 2 compliance into seven simple steps, saving you an untold number of hours while ensuring top-notch security.