Software as a service is an increasingly more prominent and lucrative industry. What is the compliance for SaaS? In the early days, regulations were limited in this sales area. Regulatory bodies hadn't yet considered the deeper societal implications, especially regarding cybersecurity concerns. Over the years, increasing regulations have required SaaS companies to remember more when running their businesses.
Compliance impacts a wide range of protocols. This guide will focus on cybersecurity, data, and privacy implications. It is important to recognize that financial compliance, personal data privacy, and other compliance measures operate beyond cyber-compliance.
All these requirements can feel exhaustive and overwhelming. As you grasp these standards, you'll find that handling these requirements isn't as overwhelming as you might think. At Trava, we want to help you navigate all the nuances of SaaS compliance. This guide helps you understand SaaS compliance requirements. Find helpful resources and learn how to integrate these requirements confidently.
As in any business, there are certain regulations and procedures that you must follow to have a secure business that can meet predetermined standards of data protection and security. The regulations may look slightly different depending on your specific industry and location. For instance, medical software, such as that used for telehealth, requires a different level of compliance with regulations like the Health Insurance Portability and Accountability Act of 1996 (HIPAA), which creates stricter requirements around private medical data.
To stay on the right side of the law, it's crucial to be familiar with state, federal, and international regulations. Skipping compliance might seem tempting, but the repercussions can be severe, including hefty fines, penalties from regulatory bodies, or lawsuits from customers whose data is compromised due to a company's negligence. While some compliance measures aren't strictly mandated by law, adhering to them is still advisable for maintaining trust and integrity.
Data breaches and cyberattacks are an increasing threat; you don't want to be open to those attacks. Not only do you face legal issues when you don't comply and something terrible happens, but you may also lose customers' trust or lose vital working time and income due to costly cyberattacks, which amount to $10.5 trillion in costs around the world by 2025.
Although compliance can cost money, the price you pay is the price you pay is typically a small sum compared to what you stand to lose without these measures. For example, the SOC 2 compliance cost cost can be thousands of dollars of investment, but you stand to lose hundreds of thousands of dollars if you don't hold yourself to this high-security standard. For many businesses, the cost of certification is worth the investment, but each business must determine its individual compliance needs, as not all types of compliance are necessary or wanted for every business.
Compliance for SaaS requires companies to look at the range of security and privacy parameters used worldwide and in different industries to ensure companies are protecting their customers' data. SaaS compliance is not that different from the compliance that any other business faces. Most of the concerns other businesses have are the same as those with SaaS companies.
However, SaaS companies have some special features they want to consider. These companies tend to have more cybersecurity concerns as they often rely overwhelmingly on cyberspaces. They also often operate in more jurisdictions, meaning they don't have to only pay attention to local or state-to-state procedures and must comply with global safety standards, such as the GDPR.
It's natural for companies to want to be secure, and companies can use many measures and procedures to ensure their security. Compliance often links to security, but there are differences between security and compliance. Both can be in harmony to help any business protect themselves. There are varying levels of security protocols, and some may fall short of compliance requirements, while others may exceed regulatory standards.
While security focuses on understanding, mitigating, and transferring risk, compliance is about more than just risk or certain rules. To be compliant, your business has to meet the standards of a regulatory body that has established a certain level of standards that guarantees you are obeying the presiding principles of that agency. Different bodies often have overlapping regulations, but each one will specify its own parameters. Standards often evolve over time, so compliance is often a dynamic process. Businesses cannot just reach compliance. They must also maintain it.
Compliance requires you to not only have security measures as listed but must also pass an audit or be certified to verify that you are actually abiding by the agency's principles. Most organizations will give certifications, assuming you pass their standards. They will also have audits to ensure you continue to meet standards. Compliance gives an added level of confidence in your security because companies can make whatever claims they want, so having an official body verify that those claims are true adds transparency and trustworthiness.
If you're looking for a SaaS compliance checklist to make sure your business is on a path toward a bright and secure future, check out Trava's Cybersecurity Assessment Checklist, which can offer a great starting point if you're feeling overwhelmed as you mitigate security risks and seek compliance.
As a SaaS company, navigating the ever-changing landscape of legal requirements and industry regulations can feel overwhelming. However, prioritizing compliance is crucial for maintaining operational integrity, building customer trust, and avoiding legal trouble.
SaaS legal requirements are often where many businesses want to begin to make sure they don't get into legal trouble. Like any company, SaaS companies not only have to be aware of current regulations, but they also have to be aware of emerging regulations that can impact their business. Using a compliance readiness roadmap, you can start tracking your compliance journey and keeping up with the trends.
Stay Informed: Legal requirements vary across regions and industries. Familiarize yourself with major regulations like HIPAA for healthcare, Payment Card Industry Data Security Standard (PCI DSS) for payment processing, and the General Data Protection Regulation (GDPR) for data protection in the European Union. Additionally, keep an eye on emerging global standards like the GDPR to stay ahead of the curve.
Track Your Progress: Utilize a compliance roadmap to track your progress towards meeting all applicable regulations. This roadmap should be regularly reviewed and updated to reflect changes in the regulatory landscape.
Know Your Market: Don't assume a one-size-fits-all approach. Analyze the specific legal requirements for your industry and target markets. Focus on prominent markets where you operate or plan to operate, and pay attention to emerging state data privacy laws that might apply.
Data protection laws are becoming increasingly common, with many countries already implementing their regulations. Complying with these laws, such as the GDPR and emerging state regulations, is essential for protecting customer data and building trust.
Remember, certain industries have specific privacy regulations. For instance, healthcare providers must comply with HIPAA, while payment processors adhere to PCI DSS. Be sure to understand any special concerns relevant to your industry when working towards compliance.
Don't wait for regulations to catch up with you. Staying informed about changes and maintaining robust security standards is crucial. This proactive approach not only protects your customers' data but also helps avoid potential legal issues and fines. By keeping up with the latest security protocols, you'll be well-equipped to juggle the complexities of global security standards effectively.
There are different regulatory bodies, and all of them seem to have confusing acronyms and names—CCPA, CMMC, GDPR, NIST, FedRamp, ISO 27001, SOC 2, HIPPA, and IFRS, just to name a few.
Unfortunately, when it comes to the regulation of SaaS compliance, nothing is simple. You'll quickly notice that there is no single SaaS audit checklist because not just one regulatory body verifies compliance. Thus, to know what steps you need to take for your SaaS company, you need to understand the players who regulate SaaS and the differences between them.
To make it easy, use the following SaaS audit checklist to learn more about the different regulatory groups you will need to consider when implementing SaaS regulatory requirements, especially security laws, frameworks, and certificates.
GDPR: The European Union passed the General Data Protection Regulation in 2018. This is a regulation to protect personal data and promote data privacy. Those who want to operate in the EU must pay attention to these regulations.
CCPA: If you want to operate in California, keeping the California Consumer Privacy Act in mind is important.
CPRA: The California Privacy Rights Act is another example of California law that adds to the already established privacy laws. When you have customers in California, you have to consider these laws. Other states have similar laws, but California tends to have greater regulations when it comes to data protection.
NIST: The National Institute of Standards and Technology is a security framework focusing on key security areas to help prevent and effectively address cyberattacks. This is to join the private and public sectors to create better security infrastructures and procedures. It promotes five steps: identify, protect, detect, respond, and recover.
CMMC: The Cybersecurity Maturity Model offers a certification that is geared toward challenges in the defense industry, so it is also geared toward companies that work with the Defense Industrial Base.
FedRamp: FedRamp compliance, also known as the Federal Risk and Authorization Management Program, offers a security framework designed for the federal government.
SOC 2: SOC 2 is a popular security framework that stands for System and Organization Controls. It uses Trust services criteria to deal with a company's infrastructure, data, people, software, and risk management policies.
ISO 27001: ISO 27001 is one of the most prominent of all security standards and often proves that a company has the highest level of security standards. This process is usually expensive but may be worth the investment.
PCI DSS: Payment Card Industry Data Security Standard includes security frameworks that are for companies that use credit card information, and this protocol focuses on dealing with credit card information safely.
IFRS compliance, also known as the International Financial Reporting Standards, has standards for 168 jurisdictions and is a financial framework that seeks consistent and transparent financial reporting.
GAAP: Generally Accepted Accounting Principles refer to accounting standards that ensure appropriate financial reporting.
HIPAA: HIPAA compliance is used in healthcare, and it was created to protect the privacy of patients. It is most often used in software that is used by healthcare professionals, including telehealth platforms.
You likely don't need to comply with all these standards, but you will may need to comply with several of the above standards. You’ll want to start by identifying the standards that you are legally required to meet. Once you are sure you’ve met those standards, you can expand to cover other relevant risks that add trust and security to your company but aren't strictly required.
Your SaaS security measures will vary depending on your industry and your company's individual needs and priorities. When you're looking for the right security measures for you, you have to consider the most prominent concerns you have based on the uniqueness of your company. For example, if you work in healthcare, HIPPA concerns are crucial. Determine what priorities you have, and don't just think about right now. If you plan to expand your company into Europe, for instance, you'll want to start ensuring you comply with European requirements now.
Once you have identified different risks and needs, you can create goals that will help you cover any risks and fulfill any needs. From there, you can start to create a plan that enables you to reach your compliance goals. With your goals in mind and your plan developed, you're ready to implement your initiatives and get any certifications or audits you may need after the plan is in place.
As you continue, you will have to reassess and continue to monitor your security, looking for and responding to gaps as they emerge. Security measures are always changing, and as cyberattacks become more advanced, so are many security measures.
If all that sounds like a lot to take in, don't worry. You don't have to handle these concerns alone. Trava wants to help you understand what security concerns you should pay attention to and how to address them. We'll help you create a plan that reflects your company's ambitions and current state.
Trava's SaaS security checklist NIST uses the NIST framework to help SaaS companies start understanding the different areas that impact their level of security. While this checklist focuses on one protocol, it was chosen because it offers a strong starting point to better understand the role of SaaS security and how to look for security that offers a high standard of protection.
For SaaS companies, having a SOC 2 attestation is not a strict requirement, but it is often a de facto requirement. SOC 2, known as Service Organization Control Type 2, is a framework created by the American Institute of Certified Public Accountants to ensure third-party services process and store data responsibly. It has five main tenets, called Trust Services Criteria: security, privacy, processing integrity, availability, and confidentiality. This framework is less rigid than others, and companies can customize how to reach the Trust Services Criteria and pass the audit.
Many companies opt to have SOC 2 compliance for SaaS because SOC 2 is often seen as a gold standard for any service organization, and customers often want to see this level of certification to know their data is protected. This certification also makes companies look more legitimate, allowing businesses to expand more readily. Thus, meeting SOC 2 requirements and succeeding with the audit can be hugely beneficial for companies.
SOC 2 compliance and ISO 27001 are both valid protocols, however, SOC 2 may provide a higher standard of security for your organization. Both certifications can help businesses look more trustworthy and safer, but there are some key differences SaaS companies need to know.
The International Organization for Standardization (ISO), with the help of the International Electrotechnical Commission, created ISO 27001 as a framework that helps companies protect data and follow best security practices. Those certified under ISO 270001 use information security management systems (ISMS) to implement and maintain data protection. To get an ISO 27001 compliance certification, companies must undergo risk assessments to help them determine necessary security controls. They must also have regular reviews to maintain high-security standards.
The SOC 2 certification is not as stringent because companies have general tenets outlined, but companies are free to implement controls as they see fit rather than having to have a certain number of specific security controls. SOC 2 still requires a high level of general security, but controls are practiced differently than under an ISO 27001 framework.
While more fluid than some other certifications, it helps to know SOC 2 structures so you can appropriately implement this framework. Our SOC 2 compliance checklist uses the key areas that are required for SOC 2 compliance to guide companies to put all necessary measures into place, including:
Security
Availability
Processing Integrity
Confidentiality
Privacy
When considering SOC 2, you must remember that SOC 2 refers to two reports: SOC 2 Type 1 and SOC 2 Type 2. Type 1 refers to the design of security controls at just one moment, while Type 2 evaluates effectiveness over a longer period. Generally speaking, organizations prefer Type 2 because they better represent a company's overall security prospects.
SOC 2 and Iso 27001 can both show off the security of your company, and both standards have their own pros and cons, but many companies find that SOC 2 provides a high standard of overall security while allowing more flexible and customizable controls that fit the nuances of individual companies. You will have to assess your company's needs and desires before making the appropriate decision for you.
SaaS companies have a responsibility to their customers to protect data and privacy. When customers buy a product, they want to do so knowing that their private information won't end up in the wrong hands or being used for unanticipated purposes. Beyond just legal requirements, SaaS companies have ethical duties to act in good faith when it comes to their customers' data. Data breaches and cyberattacks are to happen. However, companies should resist such disasters by having appropriate levels of security, which you can obtain and verify using compliance.
If you want to gain a baseline of your current level of security, you may be interested in taking a SaaS Security Assessment Questionnaire and taking steps to understand how to assess your SaaS security so that you can continue to fulfill your security responsibility.
The short answer is that any company that offers services and stores, transmits, or processes data will want to be SOC 2 compliant—However, SOC 2 compliance is not a legal regulation. So, if you do not comply, you will not receive legal ramifications based on non-compliance. However, some companies need to be SOC 2 compliant based on customer demand, stakeholders, or other business pressures.
No matter what software a SaaS company sells, you must be aware of compliance to succeed and reduce vulnerabilities. And Trava is here to help! We understand that your exact compliance plan will depend on many variables and will provide customized plans for you. But no matter your starting point, you can work to be compliant and boost your overall cybersecurity protection with Trava. Not only do we offer comprehensive data and vulnerability management for compliance frameworks, but we also stand with you during audits, tackling tough questions together. Contact us if you are concerned about your SaaS compliance or other security concerns. We'll be glad to give you a free consultation. You can also learn with us through our blog, case studies, resources, podcasts, videos, and news.
