The Value of SOC2 Compliance

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Say you’re a medium-sized financial organization. Your clients trust you to not only provide excellent financial services, but to keep their money, financial data, and personal data safe.

Unfortunately, the amount of money you store and move attracts a wide array of cybercriminals. Staying safe can become complicated, but no bank, trust, or credit union wants to gain headlines and lose customers over a breach. That’s where SOC2 (System and Organization Controls), can make a major difference. 

What Is SOC2 Compliance 

SOC2 Compliance is a voluntary framework for service organizations to protect and manage customer data. It was conceived by the American Institute of CPAs, and operates as a framework, auditing procedure, and certification. 

SOC2 is a more advanced, comprehensive version of SOC compliance. SOC compliance deals strictly with internal financial information management, whereas SOC2 encompasses cloud and data center security controls. It’s focused more on security and less on solely financial information management. 

Because SOC2 is voluntary, unlike other compliance frameworks like PCI-DSS, there is flexibility. Organizations can work within their own business and security goals to achieve SOC2 certification as long as broad criteria are met.  

Like regular SOC compliance, there are two types of SOC2 reports: 

  • Type 1 is just a description of the security systems in place. It is more of a snapshot. 
  • Type 2 is proof of those systems’ functionalities. It is proof of compliance over a timeline. 

Who Is SOC2 For? 

Any service organization should consider at least SOC, if not SOC2 compliance, to prevent data breaches and their fallout, which often includes financial loss, reputation damage, compliance issues, and more.  These kinds of organizations offer a service instead of a good, and include financial institutions, payroll processing centers, managed service providers, credit card companies, and others.  

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The SOC2 Framework 

Understanding the basics of SOC2 can be different than understanding the intricacies of the framework. As noted above, an organization can tailor the compliance to their specific needs and capabilities, but there is a framework rooted in the Trust Services Criteria that they need to follow.  

  1. Security. All systems and data need to be protected against compromise. 
  2. Availability. The systems need to be available for use. 
  3. Processing Integrity. All system processing must be timely and accurate. 
  4. Confidentiality. Information, assets, and systems need to have proper access controls in place. 
  5. Privacy. All personal information must be collected, handled, and disposed of in a way that maintains privacy. 

Why SOC2 Compliance is Important 

It’s no secret that the cybercrime business is booming. Half of all organizations suffered a breach in 2022, with ransomware leading the way. Those threat actors launching ransomware attacks are looking for data and they’re looking for money — two items that organizations can’t afford to lose. Compliance, while at times cumbersome, helps put in place the controls, strategy, and ongoing adjustments that keep those costly breaches at bay.  

Let’s take a look again at the financial services industry. Those organizations are 300 times more likely to suffer a breach than any other industry, and the average cost of a breach in 2022 for financial organizations was just under $6 million. Not to mention the reputational damage, downtime, and endless headaches that accompany a cyber incident. Organizations simply can’t afford to stay complacent, so voluntary frameworks, like SOC2, can provide both a strong defense and the building blocks of a modern cybersecurity strategy. 

A SOC2 Certification Checklist 

So, you want to get SOC2 certified. The certification happens through a third-party auditor, and they will assess the five components mentioned above. Here are a few ways organizations can make sure they’re ready for their upcoming audit. 

  1. Invest in security solutions and security professionals. Yes, that’s broad, but the framework is purposefully broad to make sure organizations with different maturity levels have an opportunity for certification. If you’re a larger organization, having a 24×7 monitoring, detection, and response solution would be a good fit. If you’re a smaller, newer organization, start with access controls such as multi-factor authentication (MFA), firewalls, and an endpoint detection and response solution. Working with a third party on this will be more cost effective and often more efficient, given the ever-widening security skills gap.
  2. Monitor network performance, set SLAs, and work on improving availability. Having strong, functioning systems is key to not only utilizing them, but protecting them. Making sure your systems are working as you intend will help your organization detect anomalies as well as put proactive security measures in place.
  3. Make sure your systems achieve their purpose. Is your data complete, accurate, timely and authorized? Those are major parts of data management and should be considered when applying for SOC2 certification.
  4. Confidentiality is critical. This is where access controls become critical, in addition to tools like encryption and confidential transmission methods to make sure that, at no point, does data become non-confidential. If private data is moving between systems or even organizations, implementing application firewalls, passwords, and other access controls can make a major difference.
  5. Make sure all data is private. Having steps like MFA in place can protect that data from falling into the wrong hands, but is it protected from accidentally falling into internal hands that just don’t need to see it? What about disposal? It’s important for an organization to implement a complete lifecycle for private data to make sure confidentiality is never compromised. 

Learn more about industry compliance. 

Explore how organizations are handling compliance and security. 

Arctic Wolf

Arctic Wolf

Arctic Wolf provides your team with 24x7 coverage, security operations expertise, and strategically tailored security recommendations to continuously improve your overall posture.
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