If you’re in a service industry, chances are you’ve run into the term SOC compliance. Some of you may have undergone a SOC I or SOC II compliance audit.
As remote work becomes increasingly more popular companies are choosing to adopt managed IT services and cloud based platforms.
However, even companies that undergo SOC compliance don’t consider how important it is when choosing a managed service provider.
What is SOC Compliance?
For those of you who don’t know or are wondering about SOC compliance, here’s a quick overview.
There are two main types of SOC compliance. There’s SOC I and SOC II compliance audits. There is such thing as a SOC III but it uses the same reporting as SOC II only it’s designed for public consumption.
A systems and organization Control audit I, or SOC I is a type of audit created to test the internal controls a service organization uses to protect sensitive client data. To be more specific, a SOC I audit tests the internal controls that could affect financial reports.
SOC II compliance audits were developed by the American Institute of CPA’s and exists to make sure service organizations controls like Security, integrity, confidentiality and privacy are up to standard.
Service companies like financial and CPA firms benefit from SOC compliance in the same way MSP’s do.
What are the Benefits of SOC Compliance?
A service organization goes through a lot of scrutiny in when it comes to compliance. SOC reports are among the most important pieces of information for a financial firm or CPA. They verify that the appropriate controls are in place and those controls work efficiently and securely.
For a financial firm it’s an invaluable tool and the same applies to an MSP. When you contract a Managed Services provider, you’re onboarding a new IT team. How integrated that IT team is depends on whether you choose a Co-managed plan or not. Either way, you’re making these service providers a part of your company.
Therefore, your firm is entrusting an MSP with highly confidential client information to one degree on another. That means your prospective provider should be able to comply with a SOC audit as well.
Benefits of SOC I Compliance
There has been a steady increase in SaaS adoption by a variety of industries. SaaS was predicted to grow 10.5 percent in 2020 by Gartner before the global pandemic of 2020. With companies forced to operate remotely, cloud and SaaS services became even more essential.
With a SOC I audit you can evaluate your provider’s policies and procedures, which is pivotal to running your operation. If they’re going to be the IT arm of your firm, they should be subject to the same regulations and systems checks.
Being able to check and validate a company’s security controls creates trust between you and your provider. A SOC I audit is proof that your MSP has the proper tools to protect both your and your client’s data.
Establishes Organization & Accountability
SOC 1 compliance audits can be costly and rigorous. However, if your MSP has multiple client organizations with a multitude of users, it can generate difficulties when keeping track of the right data. Conducting a SOC I audit provides, you the client, a report for review that saves time, money and makes your MSP’s process transparent.
Opportunities for Identifying Weaknesses and Improvement
Managed Services Providers are like any other company. Companies are subject to inefficiencies and faulty processes that can bring the quality of their services down. There are plenty of MSP’s that believe their controls and systems are enough and don’t need improving. However, as a potential client, it’s difficult to determine the security and efficiency of an MSP until something goes wrong.
An independent audit of your MSP will undoubtedly optimize your company’s internal processes because you don’t have to waste time searching for documents and paperwork if anything goes wrong. Moreover, if there are any security protocols that are not on par with SOC I standards the MSP should be proactive enough to adjust and improve where necessary.
If there is a malware attack, for example, you can rest easy knowing the proper controls are in place to prevent it from causing damage.
Cyber Security Protection
Cyber attacks have increased in both volume and breaches in the past 12 months, according to a VMware survey. 88 percent of North American respondents said they saw an increase in overall cyberattacks resulting from employees working from home. In other words, cyber protection has become more important than ever as companies learn to maneuver through a remote environment.
A SOC I audit gives you an understanding of your MSP’s business and security processes and your clients will have greater confidence in your firm. Don’t be fooled by a provider that promises complete and reliable cyber security when they’re unable to provide evidence to support it. Ultimately, it is your firm that will end up paying for the wrong MSP’s cyber security deficiencies.