Why Should SMBS Care About SOC 2 Compliance?

If you run a small or medium-sized business (SMB), you might think that SOC 2 compliance is not relevant for you. After all, SMBs have a lot on their plate: managing their teams, growing their customer base, keeping up with the latest trends and technologies... and, of course, ensuring the security and privacy of their data and systems. Why would you need to worry about SOC 2 Compliance if you are not a large corporation or a cloud service provider? The real answer will surprise you.

In this blog post we will answer the following questions: 

• What Exactly is SOC 2? 
• Why is SOC 2 Important? 
• Who Needs SOC 2? Is SOC 2 Right for My Business? 

What Exactly is SOC 2? 

 SOC 2, short for System and Organization Controls 2, is a set of standards developed by the American Institute of Certified Public Accountants (AICPA). These standards focus on the controls and processes used by businesses to ensure the security, availability, processing integrity, confidentiality, and privacy of customer data. 

In simpler terms, it's all about providing proof that you are following standards to protect your partners’ and customers' information and maintaining their trust in your brand.

SOC 2 is not a new thing. Larger enterprises have used the framework for years. In today's digital age, where data breaches and cyber threats are on the rise, building this trust is crucial, regardless of your business size.  

To get the point across, let’s relate a scenario that probably everyone has experienced. You walk into a restaurant and notice a dirty kitchen with questionable hygiene practices. Would you bring your family and friends to eat there? Would you trust that establishment with your health? Probably not.  

Similarly, in the digital world, customers want to know that their data is safe with you and that you practice good cyber hygiene. SOC 2 (System and Organization Controls) is a security compliance framework that helps businesses ensure they have the necessary controls and safeguards in place to protect customer data. By obtaining SOC 2 compliance, you're essentially assuring your customers that you take data security seriously, building trust and confidence in your brand. 

It’s kind of like how if you run a restaurant, you want to attract customers who will enjoy your food and service, and who will come back again and again. You also want to avoid any negative reviews or complaints that could damage your reputation or lead to legal troubles. 

Now, think of SOC 2 as the health and safety standards that apply to your restaurant. These standards are designed to protect your customers from food poisoning, allergic reactions, fire hazards, and other risks. They also ensure that you follow the best practices for hygiene, sanitation, storage, cooking, and serving.

By complying with these standards, you are not only avoiding fines and lawsuits, but also demonstrating to your customers that you care about their well-being and satisfaction. 

SOC 2 is similar to the health and safety standards for your restaurant, but for your data and systems. By complying with SOC 2, you are showing your customers and partners that you value their data and privacy, and that you have the proper controls in place to safeguard them. You are also reducing the chances of data breaches, cyberattacks, downtime, or errors that could harm your business or your customers.  

If you’d like to find out more about the ingredients that make up any “SOC 2 Menu”, click here to read our blog on What is SOC 2? 

SOC 2 compliance is not only for large enterprises or cloud service providers. It is for any business that handles sensitive data or provides services to other businesses. If you want to grow your customer base, increase your trustworthiness, and stay ahead of the competition, SOC 2 compliance is a must for your SMB.

Why is SOC 2 important? 

So, why does it matter?  

Compliance with standards helps protect businesses against risk. Using our restaurant scenario, if the risk was a kitchen fire, you might reduce the likelihood of that risk by providing standard safety training for your chefs, develop kitchen sanitation processes and procedures, install proper equipment, and setup 3rd party inspections. Additionally, you would plan for minimizing the impact if the kitchen fire did occur. 

The process of becoming SOC 2 certified involves risk assessment. By achieving SOC 2 compliance, a business demonstrates that it has proper risk management in place to identify and address vulnerabilities and protect sensitive data.

Remember, the goal of risk assessment is to identify potential threats and vulnerabilities, assess their likelihood and potential impact, and develop a plan to mitigate or manage those risks.  

You might reduce the likelihood of the risk of “unauthorized access to data” through implementation of logical and physical access controls to sensitive data and systems.

Policies and procedures associated with these controls might include user access management, password management, and network access controls. For example, a company might implement a policy requiring strong passwords and regular password changes, as well as procedures for revoking access when an employee leaves the company or changes roles. 

Additionally, you would plan for incident response if unauthorized access does occur. By identifying and addressing risks, you will reap the benefits of achieving SOC 2. 

Who Needs SOC 2? Is SOC 2 right for my business? 

We know that even if you run a small food truck, you still must comply with standard codes and regulations. Similarly, if you run a small or medium-sized business (SMB) that is a service provider and you store, process, or transmit customer or client data in the cloud, then you should be working toward building a secure foundation with SOC 2 compliance.

A growing number of companies across a variety of industries are requiring that vendors prove that they have good security practices in place by requiring an SOC 2 attestation report. 

It is important to note that SOC 2 compliance is unique to each company because it is a set of trust service categories as opposed to a defined list of controls to mark off.

Every company’s security practices will look different, meaning they can achieve SOC 2 compliance with custom policies and processes that are relevant to their particular business. 

In all honesty, SOC 2 should be considered a cost of doing business if your business meets any of the criteria below: 

• You store or manage data for customers and partners located in the US (see ISO 270001 for outside US). 

• You process information in the cloud. 
• You want to show that your business takes security and privacy seriously! 
• You want to reduce the risk of data breaches – as part of your SOC 2 journey, you will be implementing end-to-end security protections and strengthening your security posture! 
• You want to win more deals, unlock new business opportunities, and beat out the competition.  
• You are part of a supply chain that requires current SOC 2 attestation proof; you might be a vendor for a company that has to comply with regulations, so you basically have no choice if you want to do business with them. 

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Wrap-up 

As you can see, SOC 2 is not only for big companies, but also for SMBs who want to proactively address risks, stand out from the competition, and win over customers with their security and privacy practices.  

SOC 2 compliance is an important way to show your customers and partners that you value their data and trust, and that you are committed to providing them with the best service possible.  

If your plate is full and you need help with your Microsoft365 cloud security and SOC 2 compliance, contact our BEMO Security and Compliance Experts. For more information on what SOC 2 Compliance with BEMO is like, download our one-pager here.