The Benefits of SOC 2 Compliance
SOC 2 compliance is a necessary process that can benefit all SaaS and other service organizations.
SOC 2 compliance comes with many benefits that will help you run your company more securely, efficiently, and effectively.
What is SOC 2 Compliance?
SOC 2 stands for Service Organization Control 2. It is a voluntary compliance standard for SaaS and other service organizations. The American Institute of CPAs (AICPA) developed SOC 2 based on the Trust Services Criteria: security, availability, processing integrity, confidentiality, and privacy.
Organizations are not required to be SOC 2 compliant or to complete a SOC 2 audit, however, the benefits of certifications outweigh the risks an organization takes on without one.
The benefits of being SOC 2 compliant include:
More efficient operations
Increased customer satisfaction
Protection against lawsuits and the costs associated with them
Long-term cost savings and Loss Prevention
Increased trust with your customers
Decreased risk of loss of sensitive data
This article will cover the benefits of SOC 2 Compliance and how compliance will help your company grow.
More efficient operations:
A better understanding of your processes and improved communication between stakeholders will lead to more efficient operations.
Being SOC 2 compliant helps your organization become more efficient with processes in several ways.
First, it allows you to show that you have a reliable and repeatable process for handling your sensitive data. This can help reduce the risk of human error, which can cause massive problems regarding sensitive data.
Second, it allows you to demonstrate that your organization is taking security seriously, so you can increase trust from customers and partners—this in turn leads to better customer retention and ultimately increased revenue.
Third, it allows you to prove that your company has robust controls in place so that there are no issues with recovery or mitigation plans when something goes wrong (and it will.)
Increased customer satisfaction
Customers want to trust in the security measures taken by your company when they use your software or services.
Being SOC 2 compliant will help them feel confident that they can rely on you to protect their data with strong security measures. This leads to higher customer satisfaction scores, which leads to increased revenue streams for SaaS organizations and other service companies because satisfied customers are likely to spend more money using your products or services again than those who aren't satisfied with their experience using those same products or services.
Protection against lawsuits and the costs associated with them
SOC 2 compliance is important because it helps to ensure that your SaaS product is secure. In other words, SOC 2 compliance helps to protect your customers and your company from lawsuits and data breaches.
The costs associated with legal action can be astronomical, and many organizations have even gone out of business due to the stress caused by lawsuits.
SOC 2 compliance helps you avoid costly litigation by keeping your customers happy, ensuring that your data is secure, and allowing you to manage your internal processes effectively. You can reduce or eliminate this risk by following best practices regarding information security and privacy laws!
It's not uncommon for people to sue companies that suffer from data breaches or hacks. When a breach occurs, victims often sue the company responsible for their loss of data privacy. This can be costly for businesses that aren't prepared to defend themselves in court—especially if they don't have an adequate plan beforehand.
With SOC 2 compliance, however, you're able to prove that you have taken precautions against cyber attacks and are therefore less likely to be sued by customers whose security was compromised as a result of a hack or breach on your network
Long-term cost savings and Loss Prevention
According to GlobalScape’s ‘The True Cost of Compliance with Data Protection Regulations, an average of $4 million is lost due to a single non-compliance event. The risk of remaining non-compliant is just too costly.
Long-term cost savings come from operational risks, reducing the cost of handling a breach. By reducing operational risks, you are also reducing the risk of a data breach, which means you can avoid paying fines or penalties if your data is compromised.
In addition to reducing operational risks and lowering your risk of being penalized, SOC 2 compliance can also reduce costs by improving customer satisfaction and loyalty. Customers who feel more secure with their data will be more likely to do business with you over the long term, and they'll be more likely to tell their friends about how well they've been treated by your company.
Wondering if Pen Testing is required for SOC 2? LEARN MORE.
Decreased risk of loss of sensitive data
In addition to the benefits of SOC 2 compliance for your customers, you’ll also be able to protect your company.
According to SecureFrame’s published compliance statistics:
The average data breach cost among companies surveyed reached $4.24 million per incident in 2021, the highest in 17 years. (IBM)
Customer personal data (such as name, email, and password) is included in 44% of data breaches. (IBM)
We live in a digital age, and there’s no sign of digital dependence slowing, which also means where there is online data, there is also the risk of cyber security threats.
With SOC 2 compliance, you can demonstrate that you’re committed to protecting sensitive data and safeguarding customer information from cybercriminals and other malicious actors who may seek out these valuable assets to compromise a business or steal confidential information for nefarious purposes.
Getting ready for a SOC 2 audit? Here’s your pre-audit check list to help you prepare.
SOC 2 Compliance Can Help Your Company Grow
Mounting statistics show organizations that are compliant outlast those that are not. They grow not only their revenue but also their customer’s trust and loyalty which is becoming an expectation amongst any company or organization that houses secure data or private information.
So, if you're looking to start a company or expand your current one, it should be at the top of your list. It's not just about security and trust—it's also about efficiency and effectiveness! The more efficient you are with your resources, the more productive you'll be and save money in the long run.
Simply put, a SOC 2 Certification will help improve your business operations then it may be worth considering getting certified today.
Contact the Johanson Group today. Your trusted SOC 2 CPA firm.
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