Are you scrolling through the internet and wondering whether SOC2 compliance is worth pursuing? You are not alone. There are many young businesses as early as start-ups often struggle to decide whether SOC 2 compliance will have a meaningful impact, especially if their customers don’t seem too concerned about security.
But even though if you are searching “the benefits of SOC2 compliance for your business” then that mean you are aware of the potential dangers lurking around compliance negligence. Service Organization Control 2 (SOC2) is a data security framework established by the American Institute of Certified Public Accountants, it assists companies such as technology service providers and SaaS companies, in safeguarding and maintaining their customers’ valuable data.
So, if you are in the stage of dilemma of whether you should go with the SOC2 compliance or not, then this post might be a help to you in the decision making process. Today we will walk through some of the SOC 2 Benefits that you shouldn’t miss. Plus we will also explore the purpose of SOC 2 compliance and how to prepare the necessary documentation to make your journey easier.
What SOC 2 is Used for?
As mentioned in the introduction, SOC 2 (Service Organization Control 2) is a compliance framework designed to help service organizations manage and protect their customers’ data from cybersecurity breaches like data theft, data leaks, malicious attacks and intentional uses. It is based on 5 Trust Services Criteria (TSC) Security, Privacy, Availability, Processing Integrity and Confidentiality.
So now here is the question: How exactly SOC 2 can help with my business? For any business that is processing or storing their customer’s data often have high chances of falling in to the security breach for non-compliance. This not only effects them financially but also put a stain on their reputation. So when your organization achieves SOC 2 compliance, you are demonstrating to your stakeholders/partners that you have implemented a robust framework for maintaining and assessing its security posture.
And by doing so you are showing them your commitment on data security, which not helps in safeguarding against cybersecurity threats but also installs confidence in customers and partners. Moreover, it also helps you improve the organization’s reputation, making it more attractive to potential clients who prioritize security in their vendor selection process, ultimately contributing to your business growth.
SOC 2 Type 1 vs Type 2: What’s the Difference?
SOC 2 has two types of reports: SOC 2 Type 1 and SOC 2 Type 2. While both provide insights into an organization’s controls, they serve distinct purposes. The following table outlines the key differences to help you choose between the two if needed.
| SOC 2 Type 1 | SOC 2 Type 2 | |
| Purpose | Assesses the design of a company’s security controls at a specific point in time. | Evaluates the operational effectiveness of the controls over a period of time (typically 3 to 12 months). |
| Focus | It verifies that the necessary controls are in place but doesn’t evaluate how effectively they function over time. | It reviews not only the design of the controls but also how well they perform in practice over time. |
| Timeline | A snapshot audit, completed in a single evaluation. | A longer, more comprehensive audit covering continuous operations. |
| Use Case | Best for organizations that want to quickly demonstrate they have the right systems in place to meet SOC 2 standards. | Ideal for organizations that want to provide ongoing assurance to customers that their security controls consistently operate as intended. |
What are the Benefits of SOC 2 for Your Business?
In ‘What SOC 2 is Used for?” we have already learned few things that how SOC 2 compliance can help a business grow, but is that all? Off course NOT! So, below we have listed some of the most interesting SOC 2 certification advantages. Let’s get started:
1.Enhanced Data Security
Data security is said to be one of the biggest concerns for service organizations that deals with a large amount of customers’ sensitive data, like personal and financial information, intellectual property, health records, and other critical data. And any compromise of this information can lead to devastating consequencces for the organization like financial losses, regulatory fines, reputational damage, and even loss of customer confidence.
How SOC 2 Helps with Data Security?
SOC 2 is a powerful tool for such service based organizations to improve their data security. It helps to administrate required security measures by identifying, assessing and mitigating risks, and make sure to continuously improve the organization’s security posture. So, by following the SOC 2 compliance standard, businesses that deals with costumer data can safeguard and reduce the risk of costly data breaches.
2.Competitive Advantage
While not having SOC 2 compliance can already put businesses at disadvantage when it comes to data security, it can also make you lose potential clients. This is particularly true for sectors such as technology, finance, and healthcare where many potential clients believe having SOC 2 certification to be a prerequisite for doing business, even if it is not a legal requirement. Plus, it can complicate the establishment of partnerships and increase the time and cost involved in negotiations, further influencing your ability to compete effectively.
How SOC 2 Helps Build a Competitive Advantage?
When it comes to building strong client relationships, adhering to SOC 2 can position your company as a leader in a competitive market. As your business grows, so does the risk, so demonstrating your commitment to robust data security and risk management highlights your dedication to stringent security measures. This in return can opens doors to new business opportunities for you.
3. Compliance with Industry Standards and Laws
An industry standard for compliance refers to set of guidelines which includes the best practices and frameworks developed by industrial bodies to help businesses work safely and responsibly. For example, ISO 27001 is a standard that helps protect information, and PCI DSS is a standard that secures payment card data.
Compliance with law on the other hand involves adhering to regulations set by government authorities, such as GDPR for data privacy in the EU or HIPAA for health information in the U.S. Not being SOC 2 compliant can severely impact an organization’s ability to meet industry standards and laws. Plus, it can also hinder effective risk management, legal compliance, and business sustainability.
How SOC 2 ensures C ompliance with Industry Standards and Laws?
Now while SOC 2 itself is not directly aligned with PCI DSS, GDPR, HIPAA, and CCPA its Trust Services Criteria (security, availability, processing integrity, confidentiality, and privacy) can help organizations address aspects of these regulations. Specifically, SOC 2’s focus on data protection and security can complement compliance efforts with GDPR, HIPAA, and CCPA, while its security measures can support PCI DSS requirements. So, while SOC 2 itself is not a legal mandate, its alignment with these laws helps organizations establish a strong compliance foundation and demonstrate their commitment to protecting sensitive information.
4. Reduces Audit Fatigue
Audits are important for business to ensure accuracy in reporting, compliance with laws and regulations, and adherence to industry standards. If a business is not SOC 2 compliant it can lead to more frequent audits, increasing audit fatigue which may lead to higher costs and more time-consuming processes, ultimately disruptions the business operations.
How SOC 2 Aid Audit Fatigue?
Business that is SOC 2 compliant reduces the audit fatigue by streamlining and merging security controls into a single, broad framework. So, instead of undergoing multiple audits that is for different regulations and standards, businesses can use their SOC 2 audit to show that they are adhering to key security, privacy and data protection practices, saving time resource and effort.
5.Continuous Improvements
Finally, this part is very important, every organization wants to improve and embrace innovation as they pursue growth. However, non-compliance with SOC 2 can leave an organization without a structured framework for identifying and addressing operational weaknesses, limiting its ability to improve and grow. Additionally, non-compliance increases risks and drains resources on crisis management, thereby causing the organization to miss out on valuable feedback from regular audits.
How SOC 2 Can Impact Continuous Improvements?
After reading how non-compliant to SOC 2 can hinder growth and innovation, you might already have an idea on what positive impact SOC 2 compliance can have on an organization. SOC 2 provides structured framework for security and operational controls and helps business identify potential gaps, inefficiencies and vulnerability in their system allowing for ongoing enhancement. It also ensures that organizations continuously assess and refine their practices to meet high standards and offers valuable feedback, enabling businesses to adapt to changing regulations and industry demands while building customer trust.
Conclusion
SOC 2 compliance can be said as a strategic investment that can drive growth, improve security, and build trust with customers. So, if you are running a services-based business/ organization, by adopting to SOC 2 you are not only protecting sensitive data but also gaining a competitive edge and ensuring alignment with industry standards and legal requirements.
SOC 2 Compliance benefits continuous improvement, allowing you to identify weaknesses, refine processes, and stay agile in a rapidly evolving business environment. In the long run, it helps businesses reduce risks, cut costs, and position themselves as trustworthy, reliable partners in the marketplace.
Author Bio:
Narendra Sahoo (PCI QSA, PCI SSA, PCI QPA, CISSP, CISA, SLCA, SSFA and CRISC) is the Founder and Director of VISTA InfoSec, a global Information Security Consulting firm based in the US, Singapore & India. Mr. Sahoo holds more than 25 years of experience in the IT Industry, with expertise in Information Risk Consulting, Assessment, & Compliance services. VISTA InfoSec specializes in Information Security audit, consulting and certification services, which include GDPR, HIPAA, CCPA, NESA, MAS-TRM, PCI DSS Compliance & Audit, PCI PIN, SOC2, PDPA, and PDPB, to name a few. The company has for years (since 2004) worked with organizations across the globe to address the Regulatory and Information Security challenges in their industry. VISTA InfoSec has been instrumental in helping top multinational companies achieve compliance and secure their IT infrastructure.
