Unlocking Trust: A SOC 2 Compliance Overview
SOC 2 (System and Organization Controls 2) is an auditing framework that specifies how organizations should safeguard data across five key criteria: security, availability, processing integrity, confidentiality, and privacy. Developed by the American Institute of Certified Public Accountants (AICPA), SOC 2 is a widely recognized voluntary standard that has become best practice for building trust among businesses, customers, and third-party entities.
SOC 2 Key Principles
SOC 2 helps organizations demonstrate to clients, partners, and regulators that they have implemented appropriate controls to protect sensitive information. These controls safeguard information systems based on the framework’s five core principles called the Trust Services Criteria (TSC):
- Security: This core principle refers to the protection of information against unauthorized access, removal, modification, or disclosure. As the most crucial principle, Security is a mandatory TSC in every SOC 2 audit. All others are optional, based on your line of business or desired audit report.
- Availability: This core principle focuses on the unhindered accessibility of data to authorized entities within expected conditions or agreed service levels.
- Processing Integrity: This principle helps check whether an organization has adequate controls to ensure that data is processed accurately, timely, completely, and with proper authorization.
- Confidentiality: This core principle helps validate whether controls are in place to prevent unauthorized access to confidential information.
- Privacy: This core principle helps check whether controls are in place to safeguard the privacy of customer data and covers policies on the collection, use, retention, sharing, and disposal of personal information.
Benefits of SOC 2 Compliance
An organization must undergo a rigorous process (typically consisting of gap assessments, security improvements, control tests, and third-party audits) to achieve SOC 2 compliance.
It’s well worth the effort. After such a process and a formal attestation of compliance, an organization almost always reaps significant benefits:
- Seal of trust. SOC 2 compliance demonstrates your commitment to data protection, helping build trust, loyalty, and confidence in your brand. A genuine SOC 2 logo from AICPA on your website or company profile proves your transparency and trustworthiness in safeguarding customer information.
- Improved security. The SOC 2 certification process includes a remediation phase where uncovered system weaknesses and vulnerabilities are addressed. This can be achieved by implementing stronger security controls, adopting smarter protective technologies, or upgrading outdated and risky business processes. As a result, an organization’s security posture generally gets a significant improvement over its pre-audit condition. Among other things, such improvements proactively address risks and help safeguard your organization from cyber threats such as phishing and data breaches.
- Improved operational efficiencies. Compliance with SOC 2 standards requires adequate security controls, streamlined processes, and industry best practices. Upon implementation, these can lead to an overall improvement in operational efficiencies. Partnering with experienced external assessors also involves sharing technical expertise and strategic insight. Such advice can potentially move the needle on business performance.
- Accelerated compliance with other regulatory frameworks. The standards set by different security frameworks often overlap. SOC 2 aligns well with other widely recognized regulatory standards such as GDPR (General Data Protection Regulation), SOX (Sarbanes-Oxley Act), and HITRUST CSF (Common Security Framework). While there is no one-to-one correspondence, compliance with SOC 2 makes it easier, faster, and less costly to comply with other frameworks.
- Competitive advantage. SOC 2 compliance helps improve business relationships by establishing trust and transparency with internal and external stakeholders. As a brand differentiator, SOC 2 compliance can help your organization expand its market, generate new funding, and grow revenue by tapping clients, investors, and partners that set strident security standards and recognized certifications as a mandatory requirement for doing business.
How to achieve SOC 2 Compliance
Because SOC 2 is a rigorous framework, compliance with its standards requires considerable investment in time, money, and effort.
Planning solves many related challenges. Better yet, working with experienced assessors enables your team to build a cost-effective compliance plan. Such a plan can help you prevent runaway costs, wasted efforts, and protracted timelines.
In essence, the SOC 2 compliance process comprises four stages:
- Scoping — decide which SOC 2 report type and trust services criteria (in addition to security) your company needs based on your line of business and your customers’ specific requirements.
- Readiness Assessment — detect gaps in documentation, procedures, technical tools, system configurations, and audit trail.
- Remediation — close gaps by building and implementing a remediation plan.
- Reporting — undergo a SOC 2 Audit with a qualified third-party assessor to test your organization’s security controls and produce a report on their findings
- Type 1 report: provides a snapshot (i.e., design and implementation) of your organizational controls at a specific point in time. This report type is straightforward with a shorter timeline.
- Type 2 report: provides a long-term assessment (i.e., design, implementation, and effectiveness) of your organizational controls over a given period. This report type offers greater assurance to internal and external stakeholders but comes at a higher cost and with a longer timeline.
SOC 2 is a valuable method for your company to build trust, improve security, and grow your business. Compliance with this framework enhances your corporate governance, vendor management programs, and regulatory oversight. For many prospective clients, partners, and investors, SOC 2 compliance also demonstrates operational excellence and due diligence over the handling of sensitive data.
But while it can help differentiate your brand and drive compliance with other standards, SOC 2 can be complicated, time-consuming, and exacting to monitor and maintain. It is not a one-time event but an essential best practice that helps keep your operations aligned with industry standards.
Choosing the right tools (such as compliance management platforms) and partners (such as experienced SOC 2 auditors) can help you achieve and maintain SOC 2 compliance more smoothly and cost-efficiently.
SOC 2 compliance begins with a readiness assessment.
Talk to a trusted expert to start your journey.