How SOC 2 Compliant Security Software Mitigates Third-Party Risk
In your quest for a threat intelligence service or software provider, prospects may claim to manage your organization’s data responsibly—but how do you know this is true without official evidence?
Enter SOC 2: an auditing procedure that software as a service (SaaS) vendors can complete to assure you that, as their customer, your information is in good hands. By choosing SOC 2 compliant vendors, your organization can ensure service continuity and mitigate financial and brand damages associated with third-party compromise.
What is SOC 2, and how do you benefit from using a compliant vendor?
What Is SOC 2 Compliance?
System and Organization Controls (SOC) 2 is an auditing process developed by the American Institute of CPAs. While not a mandatory requirement for service providers, the aim of SOC 2 is to test service providers against a standardized set of criteria—also known as trust service principles—for handling customer data. An audit generates a report to assess the provider’s compliance with these principles.
There are five trust service principles:
- Security: how the vendor prevents unauthorized access to their systems
- Availability: how the vendor mitigates and handles system failures and downtime
- Processing integrity: how the vendor ensures data quality and timeliness
- Confidentiality: how the vendor protects confidential data, like personally identifiable information
- Privacy: how the vendor adheres to company data policies and generally accepted privacy principles (GAPP)
A SOC 2 report is issued by an external auditor like Barr Advisory, a risk and compliance service provider. When a vendor becomes SOC 2 compliant, their customer data processes are transparent, and customers can rest assured that their data is adequately protected.
Third-Party Services: What Are the Risks?
According to the Ponemon Institute, 53% of organizations experienced a third-party data breach between 2019-2020. While third-party service providers are now indispensable for public and private sector organizations, they can easily compromise information security if the appropriate controls are lacking.
Relying solely on data privacy legislation like the GDPR or opting for vendors using well-known cloud service providers like AWS, does not guarantee customer data security. These vendors can still lack appropriate system control measures—but you won’t know unless they’ve been audited.
Getting caught up in a third-party compromise can have lasting impacts on customers. These events, which often occur externally, can be harder to detect, potentially leaving organizations exposed for longer. According to IBM’s 2020 Cost of a Data Breach Report, a breach costs $3.86M, on average, to cover detection, lost business, notification, and response.
A compromise could also bruise your reputation and impact your own customer and stakeholder trust in the long term. In some sectors, like government and healthcare, a third-party compromise could also impact national security and, as we’ve seen throughout the COVID-19 pandemic, even compromise public safety.
Choosing a SOC 2 Compliant Vendor
Choosing a SOC 2 compliant vendor ensures that the right controls are in place to protect your organization’s data and mitigate third-party risk. SOC 2 compliance also shows that the vendor is proactive about data security and doesn’t let other internal priorities compromise their (or your) security posture.
Remember, SOC 2 is an optional (and often laborious) process for service providers. Taking this extra step shows that they understand and care about customer vulnerabilities—and likely provide customers with better services and controls as a result.
At the end of the day, opting for a SOC 2 compliant vendor will help you mitigate security vulnerabilities and avoid the financial repercussions, brand damage, service disruptions, and other harms synonymous with third-party compromise.
If you’re acquiring security software as a service, it only makes sense to choose SOC 2 compliant vendors. As a software provider in the threat intelligence and security industry, Echosec Systems understands the value of proactive controls and delivers SOC 2 compliant services to its customers. Digital transformation and emerging post-COVID security challenges already pose myriad vulnerabilities to your organization—so why add your service provider to the list?
Read more about Echosec Systems’ SOC 2 compliance here.