SOC2 for SaaS businesses presents a bunch of features, and it will get your SaaS company ready to take steps forward toward success. The System and Organization Controls, also known as SOC, aren’t mandatory, but almost all SaaS companies need to consider these controls if they want significant growth in their development journey. SOC 2 for SaaS helps these companies better sign contracts and attract more business partners and clients.
You can read the following sections to get full insight into how SOC 2 works for SaaS businesses. Here you’ll find helpful answers to these questions:
● What is SOC 2 compliance?
● What does SOC 2 compliance mean for SaaS businesses?
● What are the benefits of SOC 2 for SaaS platforms?
● What challenges may SaaS companies face during the SOC 2 implementation process?
● How does Nordic Defender help SaaS companies overcome these challenges?
SOC2 for SaaS: A Brief Overview
SOC 2 is an auditing standard provided by the American Institute of Certified Public Accountants (AICPA) to ensure there is the desired level of privacy and security regarding customer information.
SOC 2 compliance is not a legally mandatory rule, but it has become important since it defines very beneficial controls for service organizations. Online service organizations need to store, process, and transmit customer data, which requires having the necessary controls to ensure that the privacy and security of customer data is guaranteed.
What Does SOC 2 Compliance Mean for SaaS Platforms?
Service organizations, especially those who provide online software services, should seriously consider being certified by this regulation because of many reasons. First, it’s better to know SOC 2 reports are often a requirement in vendor contracts, and your prospective business partner or clients will ask for these reports at the time of signing new contracts.
The primary purpose of the standards provided by this compliance is to ensure that third-party service providers like SaaS platforms will store and process client data in a secure manner. This is considered a highly trusted framework that is based on 5 principles, including security, privacy, availability, confidentiality, and processing integrity.
Some More Information: What is the Main Benefit of Using SOC 2 for SaaS Providers?
There is a notable benefit to this framework by which each organization can freely define its own controls and implement them through a step-by-step process. A lot of cybersecurity frameworks have a predefined set of conditions for all companies, but you can formulate your own checklist of controls by employing SOC 2 controls.
A report will be provided to you after the audits are completed, which is a valuable document demonstrating your organization has implemented all the required controls to secure and protect customer data.
The Required Criteria for SOC 2 Compliance
SOC 2 for SaaS businesses offers 5-principle compliance, and each organization and SaaS company can look at that as a customizable framework. Based on these essential principles, your IT security team must formulate the necessary security controls to build the required IT security level.
● Security: This principle emphasizes the protection of data and systems against unauthorized access.
● Confidentiality: Collected and stored data is considered confidential if the necessary controls are implemented and only authorized users have access to it.
● Availability: Systems should be available and in access every time needed, and you need to build fault-tolerant systems and networks that respond properly to users’ requests.
● Privacy: Privacy covers a broad concept, and your IT security team should work on developing a reliable procedure for the collection, storage, and processing of customer data to prevent and mitigate security issues related to data exposure, data theft, and data breach.
● Processing integrity: Quality assurance is so important to make this principle real since all systems must be qualified and work as a seamless IT infrastructure.
Why is SOC 2 Compliance Important for SaaS Platforms?
SOC 2 for SaaS businesses is important for a variety of reasons. First and foremost, a SOC 2 report for SaaS companies ensures you’ve taken the necessary steps to secure customer and client data and sensitive information. If you’re a cloud service provider, it becomes even more critical since your clients and business partners want to know that their data is secure on your cloud.
SOC’s role in securing cloud-based services cannot be ignored, as there will be strict audits that will unearth the security weaknesses and gaps that may be out of sight in your systems. Through SOC 2 audits, you will be provided with a report outlining the required steps that must be taken to remain SOC2-compliant.
The Importance of Data Security for SaaS Platforms
Data security is a crucial requirement for all types of businesses. Especially for those cloud-based service providers, data security brings a wide range of unique benefits, resulting in preventing data breaches and data exposure.
Note that when a data breach occurs in a SaaS platform, the organization can be exposed to significant fines, penalties, and reputational damage. Data theft and data breaches may occur due to the lack of adequate data security practices, which will eventually lead to uncontrolled issues, troubles, and difficulties.
Check out SaaS Security Checklist HERE.
How SOC 2 Helps Your SaaS Business
SOC 2 reports work as a certification of proof that shows SaaS vendors and your clients can trust your company to protect the data they’re sharing with you. Because a trustworthy organization is behind developing these standards (AICPA), it is supposed to be a reliable cybersecurity certification, and you can rely on this framework if you want to showcase you’ve practically deployed the necessary data security controls.
The Process of SOC 2 for SaaS Businesses
Although every company’s case is unique, there is a typical process for all SaaS businesses that want to take advantage of these standards. Please remember that there are 2 types of SOC 2 reports you need to choose at the first step. After this, the process of auditing will be started by our team as soon as possible.
Here is the step-by-step process that will provide you with the final reports:
● Selecting the type of report needed
● Defining the scope of controls
● Conducting security analysis
● Outlining the required controls
● Developing the required plan according to security gaps
● Preparing the needed equipment and assigning team members
● Beginning formal process
Different Types of SOC 2 Reports for SaaS Platforms
Before you invite an accredited auditor to your office, your first step will be choosing the type of SOC 2 report. There are 2 types of reports for this, including Type I and Type II:
● SOC 2 Type I Report for SaaS Businesses: This is a type of cybersecurity report which focuses on how your systems are designed and structured according to the Trust Principles. This type of report requires less time, but it provides less information.
● SOC 2 Type II Report for SaaS Businesses: The Type II report provides expanded information, and it examines how your systems are designed and how they work according to the defined principles.
Are There Any Challenges in Implementing SOC 2 Compliance for SaaS Platforms?
Cybersecurity challenges in the time of implementing a framework come in different forms. While there could be a lot of challenges during this process, some are more critical, such as the costs, new security threats, etc.
Outdated hardware and security software tools will be the 2 main challenges your cybersecurity team may face. Much of the work for implementing a cybersecurity framework involves identifying hardware and software assets and spotting security weaknesses and gaps. If this is done properly and thoroughly by a professional team, you can ensure the required controls can be employed without a problem at the next step.
Helpful Solutions to Overcome SOC 2 Challenges for SaaS Businesses
Developing a good implementation plan is a crucial part that ensures the proper working of your security program. SOC 2 for SaaS companies necessitates working with a certified AICPA service provider who understands how the program should be developed, started, and finished to achieve the best possible results.
An accredited cybersecurity provider will provide you with a step-by-step roadmap and solve all the challenges that may be caused during the process.
A certified cybersecurity team:
● Understands the exact security requirements of your business
● Develops an all-around program and leaves out the unnecessary tasks
● Knows how to manage expenses before, during, and after the implementation process
● Provides on-time services and responses and connects you with experienced cybersecurity professionals
Unique Benefits of Implementing SOC 2 for SaaS Platforms
If you are successful in getting the Type II report for your SaaS business, it will provide you with a great range of advantages.
Type I and Type II reports together benefit your organization in the following ways:
● Robust data security and protection for your clients and business partners
● Long-term and short-term cost savings and damage prevention
● High level of business reputation and customer trust
● Streamlined regulatory compliance efforts and simplified IT infrastructure monitoring in terms of data security
● Better and quicker marketing for your business
● Reliable system performance and on-time services
● ISO 27001 achievable in a painless procedure
A Quick Look: How SOC 2 Compliance Can Help SaaS Platforms
● Attracting and Retaining Customers
Holding a SOC 2 for SaaS platforms creates a better customer retention approach and increases the number of potential clients and business partners. Note that businesses are only looking to partner with service providers whose systems are safe and protected against deadly cyber threats and attacks.
● Improving Operational Efficiency
You can improve your security measures and monitor your systems better after implementing such a framework in your SaaS company. System integrity and seamless performance are essential principles of this cybersecurity framework that requires cloud service providers to improve their operational efficiency and integrity as much as possible.
● Reducing Costs
A data breach can affect your organization financially, and it can lead to unprecedented fines and penalties. The SOC 2 framework is an indication that you’ve put controls in place to prevent such data breaches, and it significantly contributes to reducing related costs.
How Nordic Defender Helps Your SaaS Business
Nordic Defender offers a cutting-edge method for employing well-known cybersecurity practices in small and large organizations. You only need to contact our team and provide us with some information about your goals and data security requirements.
So, it’s our approach to turn your ideas into action and improve your organization’s security posture to the desired level. Nordic Defender always emphasizes the following factors when working on your project:
● Detailed hardware and asset analysis
● Continuous controls monitoring
● Integration with your current technology stack
● Insightful reporting
● Committed to quality and performance
In addition to the above-mentioned features a SOC 2 report provides to you, it gives your IT and cybersecurity team valuable insights into your company’s risk posture and security weaknesses. As a result, you can leverage these insights and take the necessary steps to strengthen your security posture to prevent a wide range of cybersecurity issues. Feel free to contact us if you want to implement the most trustworthy data security controls and practices in your company.
Frequently Asked Questions
Is SOC 2 compliance a mandatory legal rule?
● SOC 2 is not mandatory, and the certification acquired through the implementation process isn’t required in a legal sense. However, SOC 2 compliance is essential because it is a necessary requirement in vendor contracts when SaaS or B2B companies want to enter a new contract. Read more about the Benefits of SOC 2 for B2B companies HERE.
Is the SOC 2 compliance and ISO 27001 compliance the same?
● These are 2 important compliances in the cybersecurity industry, but they have some differences in scope. ISO 27001 provides a framework and focuses on data and information security, while SOC’s main focus is to prove that essential controls are implemented in an organization.
Is there a defined checklist for implementing the SOC 2 for SaaS businesses?
● SOC 2 outlines the must-have requirements in 5 main sections, and your cybersecurity team can take action to make them real through a step-by-step process.
Will the ISO 27001 framework and SOC 2 help each other?
● Implementing SOC 2 standards and controls in your SaaS business doesn’t mean you don’t not need ISO 27001. Each framework has its specific rules. However, having SOC 2 standards in place will help you better lead your IT infrastructure to benefit from ISO 27001 compliance.
What are the main factors to get to success in implementing SOC 2 for SaaS businesses?
● SOC 2 for SaaS companies pays off after some months of implementation, but you need to work with a certified cybersecurity team to deploy all the rules and controls without any issues, and it’s one of the main factors towards success.