Software-as-a-service (SaaS) can be a lucrative business. But you can’t allow compliance issues to eat into your profits. If your company doesn’t follow key SaaS regulations, it could face costly fines and run into security issues that scare away clients.
Still, compliance for SaaS can be complicated — especially for businesses that operate globally. This guide takes a high-level look at what you need to know.
What Is Compliance in SaaS?
Compliance in SaaS revolves around data security. SaaS companies handle sensitive consumer information, which they’re obligated to protect through processes and frameworks that meet regulatory standards. That can include:
- Data encryption
- Strict access controls
- Regular monitoring to detect potential breaches
SaaS legal requirements vary by geography and jurisdiction. This means the standards your business has to meet can depend on your customers’ locations — but more on that in the next section.
One way to approach compliance is by pursuing various certifications. You can market with these to show potential clients that you’re going above and beyond to keep their data safe. The ISO 27001 certification is one of the most popular options in this vein.
What Is SaaS Compliance? An Overview of Key Regulations
The type of business you run and its location will determine which SaaS regulations you need to follow. Look up data privacy laws in the areas where your company operates for the full picture. Some of the most common laws include:
- The General Data Protection Regulation (GDPR): This data privacy law applies to businesses that operate in the European Union.
- The Health Insurance Portability and Accountability Act (HIPAA): This U.S. regulation applies to companies that handle sensitive healthcare data.
- The California Consumer Privacy Act (CCPA): This regulation puts special obligations on companies that collect consumer data in California.
Each regulation sets minimum standards that your SaaS company will have to follow to avoid fines. If you operate globally, you may need to follow more than one of these.
For instance, the GDPR will rule your interactions with customers in the EU. But you don’t have to follow those requirements when dealing with U.S.-based clients. Some companies have split their security approaches along these jurisdictional lines as a result.
However, legislators can also always strengthen data privacy requirements. Many have shown an inclination toward doing so as consumers are starting to value their online privacy more and more. That’s why your best bet may be to comply with the most stringent requirements across the board. If you do that, you’ll be prepared to expand operations quickly into new jurisdictions and update your policies in response to new legislation.
What Is Compliance in Software?
Compliance in software can mean a few different things. It’s a phrase often used to describe processes that compare software usage to licenses. For example, if you pay for 100 licenses for your CRM, you can’t have more than 100 employees using it. That may sound basic, but it can get complicated in larger organizations.
More generally, compliance in this context means using software in a way that satisfies all relevant regulations. For instance, you might consider whether your employees’ use of a CRM complies with GDPR and HIPAA requirements.
Whether your software use is “in compliance” depends on the standard you judge by. The GDPR and HIPAA are two common standards. But you might also be trying to earn a certification like ISO 27001, which comes with its own requirements.
What Is Compliance in AWS?
If your company uses Amazon Web Services, it shares responsibility for compliance with Amazon. Essentially, AWS already has robust SaaS security controls in place. These comply with a variety of IT standards, including SOC 1, 2, and 3, and ISO 27001.
However, you can’t rely on Amazon alone to keep you compliant. Your employees will still need to use technologies powered by AWS correctly.
Once again, the specifics will depend on where your customers are located. If it’s in the EU, the GDPR will reign supreme. If it’s in the United States, HIPAA and the U.S. Privacy Act of 1974 could be the relevant standards.
Next Steps for SaaS Compliance
Data privacy regulations are incredibly detailed. They require SaaS companies to conform to a variety of practices and best standards, which take time and money to implement.
It’s worth partnering with an expert you can trust to get compliance ready. Trava Security has a 100% success rate in helping SaaS companies meet their critical standards. Our team of experts is standing by to help your business do the same.
Visit our compliance services page for more information on how we can help.