A company using a SaaS model must ensure that they maintain data security. This is true for most enterprises, as long as there is handling of consumer data. They must protect the interests of their clients. There are several compliance requirements, from personal healthcare information to financial records and more. For SaaS companies, their requirements are a little different than others. In the United States, the regular compliance checks are SOC 2 Type 1 and SOC 2 Type 2.
What exactly is SOC 2?
Before a SaaS company can participate in a SOC 2 for SaaS audit, it should follow several steps. The SOC 2 is an auditing process that verifies that your service providers are managing your data securely to protect your company’s interests and the privacy of your clients. Being SOC 2 compliant is a requirement if you are looking for a SaaS provider.
SOC 2 was developed by AICPA (American Institute of CPAs. It establishes the criteria for customer data management based on availability, security, confidentiality, privacy, and processing integrity, collectively known as the trust service principles.
The SOC 2 compliance process
Before a SaaS company can participate in a SOC 2 for SaaS audit, it should follow several steps. The company should form a team responsible for all the issues related to the audit. It is the team’s responsibility to address the plotting of the intended scope of the SOC 2 audit and the preparation for it. Preparing for an audit may include measures to fill in any gaps in their security protocols, improve the performance of their network, and secure the physical space that the external auditor will visit.
It might take two months for a SaaS company to prepare for an audit. But the audit itself can take a few weeks, and in some cases, about six months. The length of the audit depends on the type of SOC 2 audit that the company wants to achieve. For example, a SOC 2 Type 1 compliance is achieved when the auditor studies a specific time frame without analyzing the company’s past or future performance. The auditor will consider a minimum of six months’ worth of company performance to calculate the long-term effectiveness of its implementation of the essential principles of SOC 2 if the company wants to achieve SOC 2 Type 2 compliance.
Why is SOC 2 compliance essential to a SaaS provider?
If you are a company looking to work with a SaaS provider, you will feel very confident if you know that the company is secure and its products will deliver what you need, including data protection. It can make your company trustworthy in the eyes of your customers. Being SOC 2-compliant is an excellent selling point to attract new customers because the company has demonstrable benefits they can transfer to their customers. SOC 2 compliance shows your company’s integrity and determination to provide the best SaaS service for current and future clients.
SOC 2 for SaaS is now mandatory because SaaS platforms are deployed worldwide. Often, the customers demand SOC 2 compliance from SaaS vendors. Thus, vendors need to ask what their clients expect to be included in the SOC 2 compliance audit report. For the vendors, always ensure that you include new, relevant and accurate documentation for your platforms.