Why More Companies Are Turning to SOC 2 Cybersecurity Compliance Than Ever Before
- Mar 17, 2023
By Kate Siegrist
Technology risk is not a new concept for CEOs and industry leaders. For a long time, most companies have viewed this risk as something the CIO or IT department handles. Today, technology risk is business risk. It’s possible to lose your key business accounts or a shot at a big opportunity, even without a breach or bad press. Customers and vendors increasingly expect that your company is ready to face the challenges of tomorrow - because it is essential for security and profitability. So how can you prove it? SOC 2 provides a solid case.
Why is SOC 2 Important?
SOC 2 compliance demonstrates that your organization maintains high information security. For example, you have policies and procedures to protect sensitive customer information against ransomware, malware, and other cyber risks. There are rigorous requirements and an assessment of your policies and controls, which are tested in an audit to ensure that sensitive information is handled responsibly.
3 Reasons Companies Are Taking a Fresh Look at SOC 2 Compliance
1. SOC 2 Isn’t Just for Your Customers Anymore
Even recently, most companies explored SOC 2 because their customers asked for or expected it. This was the case with healthcare, financial services, and other heavily regulated industries. Now, your vendors or suppliers may want to reduce their risk, and this may impact your access or terms you receive.
More and more, SOC 2 is a tool used to combat supply chain risk – on both sides. Companies can’t afford to only worry about their policies – they must look at everyone they do business with.
2. Third-party validation puts the CEO and IT on the same side.
CIOs, CISOs, and their IT teams have a tough job. They are responsible for highly technical and costly projects – not to mention protecting the entire organization from bad actors and risky employees. Boards and CEOs are accountable for their entire organization, including IT and cybersecurity. But most CEOs do not have the expertise to verify that their business is taking the right approach or even know what questions to ask.
SOC 2 provides all levels of leadership what they need – validation and understanding. For middle-market companies, the board of directors, owners, and investors expect this level of cyber security – even if they aren’t asking you to prove it today. Why be caught off-guard?
3. Bring their Cyber Security Insurance Costs Down
The first two examples are essential for reducing risk to the business. This one is about bringing down costs on your cyber insurance policy – plain and simple. The increasing number of breaches in the last few years has rocked the cybersecurity insurance industry. As a result, insurers are more particular about whom they will insure, what they consider adequate mitigating controls, and what the premiums will be. Having third-party validation is a great way to combat rising rates – and even the risk of being denied coverage.
Understanding the Risk-Cost-Benefit of SOC 2 Starts with A Conversation
Cybersecurity today is becoming less about technology risk and more about business risk. It can impact your business externally with top customers and the supply chain - not to mention internal impacts with your board of directors, investors, and C-suite. And finally, it can impact the cost and access to your cyber insurance policy.
Highly-regulated companies, like those in the healthcare and financial services industry, know this well – but many other industries are finding out they, too, have the opportunity to gain and risk to reduce by looking at SOC 2 compliance. Yet, the complexity and readiness assessment phase can be daunting if you’re unsure where to start. That’s where a specialized and certified team can help you navigate what’s best for your business.
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Kate M. Siegrist
Kate Siegrist is a Partner with over 20 years of combined experience advising CEOs, CISOs and CIOs. She helps her clients navigate highly regulated industries to ensure business opportunities are not missed due to compliance burden.
Start a conversation with Kate
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