Acquiring SOC 2 compliance is critical for early-stage startups as well, because with SOC 2 compliance they can avoid the potential loss of business. The process of getting SOC 2 compliance isn’t easy, but you can achieve SOC 2 compliance faster with SOCLY.io.

However, our world has gone online, and with that, our data has also gone online. With this shift, the risk of data falling into the wrong hands has risen exponentially.

Talking about a recent data breach that took place in June 2021, LinkedIn saw a breach involving the sale of personal data such as names, emails, geolocation, and more, belonging to nearly 700 million users, on a Dark Web forum.

However, such security threats not only exist for individuals, but they also exist for enterprises, especially those working with third-party vendors. Just imagine what could happen if third-party vendors mishandle data and enterprises become vulnerable to serious security issues such as theft of proprietary secrets or intellectual property, extortion, and the installation of malware and viruses.

Hence, no company wants to take information security lightly, and therefore no company will want to work with a service provider that cannot guarantee the safety of their customers’ data.

SOC 2 is an auditing framework and a voluntary compliance standard that is applicable to SaaS and other technology service companies, i.e., companies that store clients’ data in the cloud.

This framework has been developed by the American Institute of CPAs, and it defines a set of criteria for safely and effectively managing data. This benchmark is also accepted globally.

In fact, a company that is SOC 2 compliant ensures that the controls and practices it follows protect the privacy as well as the security of customer data. As a result, such companies earn not only business but also the trust of their client organizations.

Why Should a Startup Be SOC 2 Compliant?

When you’re building a startup, you already have a lot of work to do and many responsibilities to fulfill, i.e., from hiring the right candidates to finding the perfect product-market fit while accelerating growth.

At the same time, you might be wondering whether acquiring SOC 2 compliance is critical at such an early stage.

The answer to this question is “yes,” it is critical for startups. Below are the reasons why SOC 2 compliance is critical.

Demand:

Customers require SOC 2 compliance so they can trust you with their data. Enterprise-level clients will often work with you only if you properly address their security concerns. Hence, you could lose prospective customers and significant business opportunities if you’re not SOC 2 compliant. Similarly, you can scale your revenue and growth faster by attracting potential clients through SOC 2 compliance.

Reputation:

SOC 2 compliance demonstrates accountability and strengthens reputation. At a time when the U.S. reported its highest number of data breaches in 2021, it is evident how data breaches can erode trust and cause a company’s reputation to vanish quickly. Such incidents may also result in significant legal issues and high remediation costs. Therefore, no company wants to risk this damage by working with a non-SOC 2–compliant vendor.

Security:

SOC 2 compliance at an early stage of a startup helps organizations establish a security-first culture. Just think about your development team that is building a more secure product, and at the same time, your marketing team will be complying with various data privacy laws. In fact, your IT team will also be ensuring the security of all your systems, i.e., right from the get-go. However, the best part is that you will save a lot of time and money because you’re preemptively dealing with security threats and are not required to address them later after the damage has been done.

What Kind of Startups Need SOC 2 Compliance?

Startups that provide technology services such as B2B SaaS or cloud computing should invest in SOC 2 compliance. Although SOC 2 compliance is not legally mandatory, it is advantageous and often essential, based on the reasons mentioned above.

How Can Your Organization Achieve SOC 2 Compliance in the Least Time Possible?

Achieving SOC 2 compliance may generally take anywhere between two weeks and a month once the audit is complete, and the preparation phase for achieving SOC 2 compliance is even longer than this, depending upon the nature as well as the scope of compliance you opt for. However, you can decrease this time by following the below-mentioned steps:

• Identify the type and scope of SOC 2 compliance
  
  
• Choose a compliance platform that helps automate compliance processes
  
  
• Sign up with an audit partner
  
  
• Conduct an internal risk assessment
  
  
• Establish robust security within your organizational structure
  
  
• Achieve audit readiness by closing security gaps
  
  
• Write your SOC 2 system description
  
  
• Receive your SOC 2 audit report
  
  

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SOC 2 is a type of audit report that evaluates the effectiveness of a company’s controls over its customers’ data. For EnterpriseTech, which deals with sensitive data on a daily basis, a SOC 2 report is an essential tool for demonstrating compliance with industry standards and building trust with clients. A SOC 2 report evaluates a company’s controls over five “trust service principles” (TSPs): security, availability, processing integrity, confidentiality, and privacy. Each of these TSPs has its own set of control objectives, which are designed to ensure that the company is protecting customer data in accordance with best practices.

Security is perhaps the most important of the TSPs, as it relates to protecting the confidentiality, integrity, and availability of customer data. A SOC 2 report evaluates the effectiveness of a company’s security controls, such as firewalls, access controls, and encryption, to ensure that customer data is secure from unauthorized access or disclosure.

Availability is another important TSP, as it ensures that customer data is available to authorized users when they need it. A SOC 2 report evaluates a company’s controls around system uptime, disaster recovery, and backup procedures to ensure that customer data is always available.

Processing integrity is a TSP that ensures that customer data is accurate, complete, and processed in a timely manner. A SOC 2 report evaluates a company’s controls around data entry, processing, and validation to ensure that customer data is accurate and up to date.

Confidentiality and privacy are TSPs that relate to the protection of customer data from unauthorized access or disclosure. A SOC 2 report evaluates a company’s controls around data access, data storage, and data sharing to ensure that customer data is protected from unauthorized access or disclosure.

For EnterpriseTech, a SOC 2 report is essential for demonstrating compliance with industry standards and building trust with clients. By undergoing a SOC 2 audit and obtaining a SOC 2 report, EnterpriseTech can demonstrate that it has effective controls in place to protect customer data in accordance with best practices. A SOC 2 report can also be a valuable marketing tool for EnterpriseTech, as it can help differentiate the company from its competitors and demonstrate its commitment to customer data protection.

By prominently displaying its SOC 2 report on its website and marketing materials, EnterpriseTech can show potential clients that it takes data protection seriously and has the necessary controls in place to ensure:

• The security
  
  
• The availability
  
  
• The processing integrity
  
  
• The confidentiality
  
  
• The privacy of customer data
  
  

Hence, a SOC 2 report is an essential tool for EnterpriseTech to demonstrate compliance with industry standards and build the utmost trust with clients. By undergoing a SOC 2 audit and obtaining a SOC 2 report, EnterpriseTech can demonstrate its commitment to customer data protection and differentiate itself from its competitors.

Benefits of SOC 2 Audit for EnterpriseTech Industry

As enterprises continue to rely more heavily on technology to manage their operations and store sensitive data, cybersecurity threats are becoming more complex and pervasive. It is essential for enterprises to demonstrate that their technology systems and processes are secure and reliable.

SOC 2, or Service Organization Control 2, is a set of auditing standards developed by the American Institute of Certified Public Accountants (AICPA). It is a comprehensive framework that helps organizations ensure the security, availability, processing integrity, confidentiality, and privacy of their systems and data.

In today’s world, where cyberattacks and data breaches are becoming increasingly frequent and sophisticated, SOC 2 compliance is critical for enterprise technology. Here are a few reasons why:

It demonstrates a commitment to security

SOC 2 compliance is a clear indication to customers, partners, and stakeholders that an enterprise is committed to security. It shows that the enterprise has implemented robust security controls and processes to safeguard sensitive data and prevent unauthorized access. This helps build trust and confidence in the enterprise’s ability to manage risk and protect valuable information.

It enhances competitive advantage

SOC 2 compliance can be a significant competitive advantage for enterprise technology companies. It demonstrates that an enterprise has implemented robust security controls and processes, which can be a differentiator in a crowded market. SOC 2 compliance can also be a requirement for doing business with some customers or partners, giving compliant enterprises a competitive edge over non-compliant ones.

It protects against data breaches

Data breaches can have serious consequences for enterprises, including financial losses, reputational damage, and legal liabilities. SOC 2 compliance helps protect against data breaches by ensuring that an enterprise’s systems and processes are secure and that sensitive data is appropriately protected. It provides a framework for identifying and addressing vulnerabilities before they can be exploited by attackers.

It helps to meet regulatory requirements

Many industries, such as healthcare and finance, are subject to strict regulatory requirements for data security and privacy. SOC 2 compliance helps enterprises meet these regulatory requirements by demonstrating that they have implemented the necessary security controls and processes. This can help avoid costly fines and legal action for non-compliance.

SOC 2 compliance is not a one-time event. It requires ongoing monitoring, testing, and improvement of security controls and processes. This provides a framework for enterprises to continually improve their security posture, ensuring that they stay ahead of emerging threats and maintain the trust of their customers and stakeholders.

Conclusion

SOC 2 compliance is essential for enterprise technology companies in today’s cybersecurity landscape. It helps demonstrate a commitment to security, enhances competitive advantage, protects against data breaches, helps meet regulatory requirements, and provides a framework for continuous improvement.

By investing in SOC 2 compliance, enterprises can ensure that their technology systems and processes are secure and reliable, and that they are well positioned to meet the evolving security challenges of the future.

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Technology has advanced significantly in the past decade, and with the complexity and need for regulatory and security compliance has also increased. Talking about the fintech companies such as banks and other financial institutions, they are in such a business where they are required to constantly store and interact with the most sensitive consumer information.

Hence, the financial institutions are needed to have a standardized framework which verifies that the partners they work with are securely handling the information of their clients.

However, the SOC 2 audit report is commonly known as the best compliance for fintech companies, and it is also viewed as a gold standard compliance indicator, especially for the fintech industry. It has been developed by the AICPA (American Institute of Certified Public Accountants), and the SOC 2 information security standard is an audit report which is provided on the examination of controls including –

• Security
• Availability
• Confidentiality

In today’s times, most of the fintech companies understand the value of security and claim they are 100% secure. But that claim doesn’t hold any weight without some concrete and objective proofs such as a SOC 2 report.

However, the SOC 2 report is generally a long and rigorous process, and it is not just long and rigorous, but it is self-imposed and is also pursued by the companies that take their customers’ data security seriously. But the SOC 2 report can vary between the companies. This is because of the organizational differences the companies have. However, it is also evaluated based on multiple criteria for making sure that the company follows strict IT security protocols for the purpose of protecting their systems as well as their clients’ important data from unauthorized access. It also ensures that such companies minimize the incidents’ impacts whenever needed.

Well, there are numerous reasons why fintech companies need to be proactive about having SOC 2 compliance or becoming SOC 2 compliant. But the most critical reason among all the reasons is that it shows a higher level of information security framework in place. So, whenever any financial institutions search for collaborating with a fintech partner, they will always look for such companies that take the clients’ data security and information security seriously.

Moreover, when a fintech company is SOC 2 compliant, then it also shows that the company has put in its valuable resources to ensure that they have upheld a high standard of security for their partners.

• Banking institutions and financial institutions have such data that contains some of the most sensitive information, but if such important information is mishandled, then it can cause significant losses in terms of money. In fact, not just the monetary losses, but it can also cause long-lasting reputational damage to the fintech companies. 
• A report by IBM also found that the financial industry, especially the fintech companies, has the second-highest average cost of a data breach among all the other sectors.

For instance, there is the infamous case of the Equifax data breach which took place in 2017, and it did cost the credit bureau giant around $700 million. Well, it happened due to failures to follow security protocols.

Moreover, in the same IBM report, it is also stated that 38% of data breach costs incur from lost business shares, and this cost includes:

• The increased cost of customer turnover,
• The lost revenue which happened due to system downtime, and
• The cost that has been incurred for new customer acquisition.

When your fintech business is SOC 2 compliant, then it can add an extra layer as well to customer trust. In fact, a SOC 2 compliant company also significantly suffers less from a data breach than other companies, and they also need to bear less substantial incurred costs.

However, not just financial losses could be better, but at the same time, your brand reputation and equity will also be much better as compared to the companies that aren’t SOC 2 compliant. That means ultimately SOC 2 compliance will bring in more business for your fintech business.

Today, the financial institutions are favoring fintech companies for delivering more functions and increasing their service offerings. Hence, in such a time, they are incredibly selective when it comes to choosing the fintech companies that they want to work with.

However, with countless fintech companies out there, SOC 2 compliance will allow any fintech company to stand out among all the non-SOC 2 compliant competitors, which will ultimately give those financial institutions the confidence that they need.

So, in today’s world, where frauds, data breaches, and cyberattacks have become so common, SOC 2 compliance is a solution for any fintech company that wants to stay relevant and ahead of the competition.

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Information security is important for the healthtech industry because no one wants to work with an at-risk healthcare provider. However, if someone is looking to use your healthtech services, then they would want to know how secure your healthcare organization actually is.

Well, you may think that you have a secure healthcare organization, but this is not always the case. With more and more healthcare security breaches being reported to the HHS, it has become more important than ever for covered entities and business associates to demonstrate their commitment to keeping “protected health information” secure while providing top-quality healthcare services and putting their patients’ well-being first.

What is SOC 2 attestation?

A SOC 2 attestation is a valid third-party assessment of a company’s controls against the five Trust Service Criteria – Security, Availability, Processing Integrity, Privacy, and Confidentiality.

It is ideal for both covered entities and business associates that want to reassure their clients that the information they provide is secure, available, and confidential. Hence, it has become increasingly common for organizations to require their vendors to be SOC 2 compliant. Such organizations ask for SOC 2 compliance to ensure that the healthcare organizations they work with have strong security measures in place.

A SOC 2 audit addresses third-party risk concerns by evaluating internal controls, policies, and procedures that directly relate to the Trust Services Criteria.

This means that a SOC 2 audit report focuses on an organization’s non-financial reporting controls related to:

• Security
• Availability
• Processing Integrity
• Confidentiality
• Privacy

Security – Is the system you’re using protected against unauthorized access?

Availability – Is the system being used available for operation and use as agreed?

Processing Integrity – Has the system processing been completed, and is it valid, accurate, timely, and authorized?

Confidentiality – Is the information designated as confidential actually protected as agreed?

Privacy – Is the personal information collected, used, retained, disclosed, and destroyed in accordance with the entity’s privacy notice?

The responsibilities of covered entities and business associates vary, and a healthcare organization will generally choose to be evaluated against the security, availability, and confidentiality categories. If a client cannot be assured that you have reliable and secure processes for protecting protected health information, they are unlikely to work with you.

Why Should Healthcare Organizations Include the Privacy Category?

In addition to security, availability, and confidentiality, it may also make sense for healthcare organizations to include the privacy category in their SOC 2 audit.

Let us explain this with an example.

Consider a doctor’s office. What is one of the first items the receptionist hands you? A “Notice of Privacy Practices.” This is because you are about to disclose personal information about your medical conditions to a medical provider. In addition, you provide other personal information such as:

• Your date of birth
• Insurance information
• A list of medications you are on

Now, imagine if the doctor’s office shares that personal information with a marketing company that wants to advertise new prescriptions to you.

What if the doctor shares this information with a research organization conducting research on treatments for your condition? Or shares it with other medical providers or insurance companies?

You should be informed about who your personal information is shared with.

What Are the Benefits of SOC 2 Compliance for a Healthcare Organization?

When a healthcare organization goes through a SOC 2 audit, it demonstrates that the organization has invested time, money, and effort into providing secure services while remaining committed to protecting clients’ PHI.

Your organization’s reputation, business continuity, competitive advantage, branding, and patients’ health all depend on the quality of your services and the security of your systems. This is why the healthcare industry can benefit from SOC 2 compliance.

• The healthcare industry is built on customer trust. If clients cannot trust your services, they will not choose to use them. If a patient is harmed due to a lack of due diligence, the impact on their health and livelihood can be severe.
• If your organization has faced a data breach, the negative impact on its reputation can be significant. If PHI is exposed, organizations often face operational obstacles, fragmented security, lawsuits, fines, and loss of patient trust. Patients may also be exposed to life-threatening consequences.
• Hence, the continuity of your healthtech business and your patients’ well-being largely depends on securing your systems through SOC 2 compliance.

If you pursue SOC 2 compliance and achieve a SOC 2 attestation, your healthcare organization gains a strong branding tool, allowing you to market your services as reliable and secure.

When you partner with an auditing firm such as Socly.io that educates you and performs a thorough, high-quality audit, you gain a valuable competitive advantage.

If your competitors do not have a SOC 2 audit report, you are already ahead. Even if they do, it is important to understand whether they underwent a quality audit.

Understanding what defines a quality audit allows you to explain to prospects why your SOC 2 audit report is more valuable than that of your competitors.

Having a SOC 2 audit report from a licensed and quality-driven firm opens access to a new marketplace of knowledgeable prospects who prioritize security and seek SOC 2 compliant vendors.

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