Unlike other compliance frameworks, which have a predefined set ofconditionsfor all companies, SOC 2 requirements are different for every organization.Depending on their own operating models, each organization must formulate itsown security controls to become compliant with the five trust principles.
Security.Broadly speaking, the security principleenforces the protection ofdata and systems, against unauthorized access. To that end, you may need toimplement some form of access control, e.g. using access control lists oridentity management systems.
You may also have to strengthen yourfirewalls, by introducing stricter outbound and incoming rules, introduceintrusion detection and recovery systems, and enforce multi-factorauthentication.
Confidentiality. Data qualifies asconfidential if only a specific group of people should access it. This mayinclude application source code, usernames and passwords, credit cardinformation, or business plans, etc.
To adhere to this principle,confidential data must be encrypted, both at rest and during transit.Moreover,while providing access to confidential data, adhere to the principleof leastprivilege, i.e. grant the bare-minimum permissions/rights thatpeople need todo their jobs.
Availability. Systems should meetavailability SLAs at all times. This requires building inherentlyfault-tolerant systems, which do not crumble under high load. It also requiresorganizations to invest in network monitoring systems and have disasterrecovery plans in place.
Privacy. The collection,storage, processing, and disclosure of any personally identifiable information(PII) must adhere to the organization’s data usage and privacy policy,along with the conditions defined by the AICPA, in the Generally AcceptedPrivacy Principles (GAPP).
PII is any information that can be usedto uniquely identify an individual, e.g. name, age, phone number, credit cardinformation, or social security number etc. An organization must enforcerigorous controls to protect PII from unauthorized access.
Processingintegrity. All systems must always function as per design, devoid ofany delays, vulnerabilities, errors, or bugs. Quality assurance andperformancemonitoring applications and procedures are crucial to achieve adherence tothisprinciple.
What are the benefits of an SOC 2 audit?
- SOC 2 audits help you in improving your overall security outlook.
- Since SOC 2 compliant companies have all the right tools and procedures tosafeguard sensitive information, customers feel confident in entrusting themwith their data.
- SOC 2 requirements often overlap with other frameworks, like ISO27001 and HIPAA, which means that you may end up killing two (ormore) birds with one stone.
- You increase your brand reputation as a security-conscious company andestablish a formidable competitive advantage.
- Achieving SOC 2 compliance may help you avoid data breaches and thefinancial/reputation damage that comes with them.
SOC 2 Type 1 vs Type 2
There are two main types of SOC 2 compliance: Type 1 and Type 2.
Type 1 attests an organization’s use of compliant systems andprocesses at a specific point in time. Conversely, Type 2 is anattestation of compliance over a period (usually 12 months).
A Type 1 report describes the controls in use by an organization, andconfirms that the controls are properly designed and enforced. A Type 2 reportincludes everything that’s part of a Type 1 report, along with theattestation that the controls are operationally effective.
SOC 1 vs SOC 2 vs SOC 3
There are three main types of SOC reports – SOC 1, SOC 2, and SOC 3.The first two are the most prevalent, with the second being most relevant totechnology companies.
SOC 1 revolves around financial reporting, whereas SOC 2 focuses more oncompliance and business operations. SOC 3 is an adaptation of SOC 2, whichreports SOC 2 results in a format that is understandable for the generalpublic. Let us look at the following small table to break it down further.
SOC 1
SOC 2
SOC 3
Purpose
Report on financial controls
Report compliance with five trust principles: security, confidentiality,availability, privacy, and processing integrity
Report the same controls as SOC 2, but in a way that makes sense to thegeneral audience
Audience
Mainly auditors
Customers and other stakeholders
General public
Example
Most companies processing financial data will require SOC 1 compliance
A database-as-a-service company is required to achieve SOC 2 compliance,before they can host sensitive data belonging to multiple customers
An organization that achieves SOC 2 compliance may also create a SOC 3report to let the general audience know that it takes data security andprivacy seriously.
Advantages
- Work with customers that require SOC 1 compliance
- Increase brand reputation
- Assure your customers that you have all the right controls in place
- Work with customers that require SOC 2 compliance
- Increase brand reputation
- Assure your customers that you have all the right controls in place
Produce marketing collateral to spread the news of your compliance to a wider audience.
SOC 2 compliance and IAM
SOC 2 compliance and IAM (identity and accessmanagement) go hand in hand. It would be safe to say that you cannotachieve SOC 2 compliance, without having some form of IAM in place. IAMsystems help enforce access control, which is fundamental to the security,confidentiality, and privacy principles of SOC 2.
Modern IAM applications have features like multi-factor authentication,identity federation, password auto-resets, identity lifecycle management, andgranular access control, which can catalyze your journey to becoming SOC 2compliant.
SOC 2 compliance helps establish that a technology company is serious aboutdata security and privacy. Whenever you are in the market for a SAAS provider,remember to keep SOC 2 compliance, at the top of your checklist.
