If you’re like most B2B SaaS companies, your prospects and customers are asking you if you’re SOC 2 compliant – and want to see the SOC 2 report to prove it. Otherwise, they’re not going to buy from you.
Meanwhile, you may be still struggling with figuring out how to even pronounce SOC 2 (“sock-too”, by the way), let alone how to go about getting that much-coveted report. This article is the first of a series that will help bring you up to speed on what you need to know about SOC 2.
Just to deal with the first worry that may be uppermost in your mind: Is securing SOC 2 compliance certification a long and frustrating process? If you do it the old-fashioned manual way, the answer is a resounding yes. If you do it with an automation platform, not so much!
Read on, and we will give you an overview of what SOC 2 compliance is and why your SaaS company should be SOC 2 certified.
In later posts, we will explore various other aspects of SOC 2 readiness – such as gap analysis, risk assessment, policies, controls, evidence, employee compliance – and of the audit process itself. We will also tell you how a compliance automation solution can help you achieve your SOC 2 compliance far faster, with fewer resources, and in a way that will allow you to stay continuously compliant and continuously ready for the annual SOC 2 audit.
More specifically, we’ll also tell you about the Akitra Compliance automation platform, with its unique automation advantages and affordable price tag.
Let’s dive in!
1. What is SOC 2 Compliance?
The American Institute of Certified Public Accountants (AICPA) developed SOC 2, a voluntary compliance framework for service organizations that describes how firms should keep client data safe.
The framework consists of a set of requirements that specify what an organization needs to do in order to be certified as meeting the AICPA’s SOC 2 criteria. The criteria cover five different categories: security, privacy, confidentiality, availability and processing integrity. These five categories are referred to as “Trust Services Criteria” (TSC).
The only one of these five TSC categories which is absolutely required for compliance is security, while the other four are optional. Many firms initially opt to be audited for security only – typically if they have never been through the SOC 2 process before – and then widen the scope in subsequent years’ audits.
SOC 2 reports are divided into two kinds:
- Type 1 is a point-in-time assessment of your controls and how diligently you’re implementing them.
- Type 2 covers proof of compliance over a period of time, which is initially no less than three months if you’re in a hurry (though six months is better). After that, once a year will suffice, though you have to show continuous compliance during that period.
2. Why does my Company Need to be SOC 2 Certified?
You need a SOC 2 report because your customers want you to be SOC 2 compliant or else they may not buy from you. Or if they do buy from you, they’ll first make you jump through more hoops – such as giving you lengthy security questionnaires to fill out – to demonstrate that you really are secure. (And of course, they may also care about the other categories of criteria than just security, such as confidentiality and availability, which means even longer questionnaires to complete).
Meanwhile, your competitors are probably already SOC 2 compliant, or racing to get there, so you don’t have much choice about pursuing SOC 2 if you want to stay in the game.
SOC 2 is typically required if your customers have outsourced to you the storing or processing of private or confidential information, especially if it involves their own customers’ data.
The rising use of outsourcing means that customer data and information is shared with an increasing number of service providers as companies outsource more key business applications. In this scenario, companies are worried about service providers’ security breaches, endangering their own and their customers’ vital data.
Outsourcing may help companies run their business more efficiently, but they are ultimately still responsible for the security of their customers’ data. So, organizations need a certification standard to guarantee that their SaaS vendors are keeping their customer data safe and secure. The most important of those standards is the SOC 2 compliance framework. This is why SOC 2 has risen so dramatically in importance in recent years.
A SOC 2 report is frequently the first document used by corporate security and compliance officers to evaluate a vendor’s security risk. Customers can trust SOC 2 reports because they know you have security policies in place and follow them. SOC 2 assists customers in selecting vendors who meet an accepted set of security standards, and have been independently audited to make sure it’s really true.
In the end, SOC 2’s value comes down to helping SaaS businesses establish trust with the organizations they serve.