Anthem, an America-based healthcare industry, was fined $16 million in 2018 for violating HIPAA compliance. It’s the largest HIPAA violation penalty ever.

So, to avoid penalties, healthcare organizations must ensure they keep the patient’s sensitive information safe.

This article explains who oversees enforcing the HIPAA Rules, the various levels of fines for violations, and how to protect your organization from those penalties.

Who enforces HIPAA?

The Department of Health and Human Services (HSS) Office for Civil Rights (OCR) is the primary enforcer of HIPAA Security and Privacy Rules.

However, to some degree, other organizations, such as the Centers for Medicare and Medicaid Services (CMS), the U.S. Food and Drug Administration (FDA), and the Federal Communications Commission (FCC), have participated in HIPAA enforcement. In addition, the incorporation of the Health Information Technology for Economic and Clinical Health (HITECH) Act into HIPAA in 2009 granted state attorneys general the power to enforce HIPAA Rules.

How did HHS office for civil rights enforced HIPAA?

The HHS Office for Civil Rights analyzes all data breaches reported by covered entities and business associates if a data breach impacts more than 500 individuals. At times, more minor data breaches are investigated, especially when several small breaches of a similar nature have been reported that could indicate compliance failures.

OCR also investigates HIPAA complaints filed by patients and employees of HIPAA-covered entities over suspected HIPAA violations. OCR investigates complaints, conducts compliance reviews, and educates relevant entities about compliance requirements. It can also levy penalties against non-compliant entities if needed.

When HIPAA violations are discovered, OCR can take actions like investigating complaints, conducting compliance reviews, educating relevant entities about compliance requirements, and levying penalties against non-compliant entities if needed.

OCR classifies HIPAA violations into four groups based on their severity as follows:

1. Lack of knowledge

The covered entity was unaware of a violation that could not have been realistically avoided.

2. Reasonable cause

A violation that the covered entity expects and knows but still couldn’t have avoided. This violation doesn’t yet constitute wilful neglect.

3. Wilful neglect, corrected in 30 days

A violation is caused directly by “willful neglect” of HIPAA rules in cases where an attempt has been made to correct the violation.

4. Wilful neglect, not correct in 30 days

A violation due to wilful neglect of HIPAA rules where the organization was aware of its errors and did not rectify them.

What are OCR’s HIPAA penalties?

Violation fines cap up to $1,500,000 per violation per year. To determine a specific fine within each of these categories, OCR takes the following factors into account:

• The covered entity’s size
• The type of data exposed
• The duration of the violation
• The number of individuals affected
• The severity of the damage done
• The entity’s cooperation with the investigation

As discussed above, HIPAA violation penalties are categorized as below:

Category	Cost per violation
Lack of Knowledge	$100-$50,000
Reasonable Cause	$1,000-$50,000
Wilful Neglect, Corrected in 30 Days	$10,000-$50,000
Wilful Neglect, Not Corrected in 30 Days	> $50,000

What are the tips for maintaining HIPAA compliance?

Although complying with HIPAA saves a lot of time in maintaining Security and Privacy rules, we compiled the most important best practices to help your organization remain compliant.

1. Employee training

Security & privacy awareness and training are essential in maintaining HIPAA compliance. We recommend that you train your employees once every quarter to follow those policies during the employee onboarding process and on a daily basis.

2. Enforce a rigid privacy policy

Enforcing a rigid password policy will go a long way in helping to protect Personal Health Information (PHI). Passwords are frequently used to perform the most common tasks in a HIPAA-regulated office, including logging into computers and accessing emails. The passwords should be changed at least once every 90 days.

3. Conduct self-audits

According to the HSS, self-audits must be conducted at least once a year to remain compliant. Conduct audits of your physical, technical, and administrative safeguards.

4. Backup of all patient records

All entities covered by HIPAA, including medical practices, must establish and implement procedures to create and maintain retrievable copies of electronic PHI to save themselves during a data breach.

How do I become HIPAA compliant?

Scrut Automation is an innovative and radically simple governance, risk, and compliance automation platform for growing startups and mid-market enterprises. With Scrut, compliance teams can reduce ~70% of their manual effort in continuously maintaining compliance towards SOC 2, ISO 27001, GDPR, PCI DSS, HIPAA, and CCPA. Schedule your demo today to see how it works.

Cybercrime was expected to inflict $6 trillion worth of damages worldwide last year. If this was to be equated with GDP – cybercrime would be the world’s third-largest economy after the U.S. and China. Cybercrime costs globally are expected to reach a whopping $10.5 trillion by 2025, up from $3 trillion in just 10 years.

Let it sink in for a minute.

Needless to say, cybercrime has reached far and wide just as technology and the internet. Organisations across the world are establishing strong controls not just to be compliant – but also to safeguard their stakeholders, avoid business disruptions and protect their reputation. If you are a technology company building software – protecting the privacy, confidentiality, availability, and integrity of sensitive data is as important as building the product itself.

F500 companies such as Morgan Stanley, Yahoo, Google, Microsoft and Ikea are deeply inflicted with such threats and attacks. These companies have dedicated capability and capacity to manage information security – but are still struggling to keep themselves secure due to growing sophistication of cyber-criminals. This problem grows exponentially with smaller hyper growth startups, which lack such resources. Thus, focussing on robust information security operational procedures is the best mechanism to combat such threats.

What is information security?

Information security is a set of practices implemented to keep data secure from unauthorised access or alterations when the data is being stored and transmitted from one machine or application to another.

Advantages of information security

1. Protects sensitive information

In the tech-savvy world, sensitive data including but not limited to, company’s confidential information, customer, employee and vendor personal details, is stored and transmitted online. Goes without saying, this data is critical – and any data breach can result in significant reputational losses and breach of trust. Often times, this also results in real financial losses, through lost sales, fines and corrective actions.

2.Offers organisation-wide protection

It protects your entire organisation from technology-based risks and other, more common threats, such as poorly informed staff or ineffective procedures.

3. Reduces the risks of remote work

The COVID 19 pandemic has evolved the way we work, with companies experimenting with different forms of work environments – Remote, flex-work, distributed and hybrid work models replacing the traditional work from office models.This has increased the threat of leakage of sensitive information and the expanded the risk perimeter of businesses tremendously. Investing in a good Infosec solution protects your company from potential security threats and assesses where your business ranks in terms of cyber resilience, enabling you to take proactive steps for remediation.

4. Infosec policies keep you away from penalties and fines

Do you know, Uber alone has 600,000 drivers and 57 million user accounts breached? And it was fined $148 Million for violating state data breach laws. It was the biggest data-breach fine in history at the time.

American and European countries have implemented regulations to protect their citizens’ personal data. Any company violating these regulations can lead to substantial fines and penalties. Below are a few examples, and the extent of these penalties:

Health Insurance Portability and Accountability Act (HIPAA) was legislated in the United States in 1996 and imposed several regulations on companies in the healthcare sector that handles patient data. It is the duty of all institutions handling healthcare data in America to protect the information gathered in compliance with HIPAA. Institutions that failed to comply are fined between $100 to $1.5M a year.

General Data Protection Act (GDPR) applies to all businesses that handle people’s personal data residing in the European Union (EU). GDPR was designed to protect European citizens from data breaches. Companies that failed to comply are fined up to €20 million (roughly $20,372,000), or 4% of worldwide turnover for the preceding financial year – whichever is higher.

Payment Card Industry Data Security Standard (PCI-DSS) applies to all companies that handle credit card information. The PCI Security Standards Council, an agency established by Visa, Mastercard, and other payment companies, administers and enforces this regulation. Retailers who failed to comply with PCI-DSS are fined between $5,000 to $100,00 a month.

Conclusion

In short, robust infosecurity posture is critical due to 4 key reasons:

It helps protect sensitive data

Infosec policies prioritise protecting intellectual property and sensitive data such as personally identifiable information (PII) of key stakeholders, company operational data, customer sales data etc

It enables proactive risk management

Effective infosec policies help identify risks to information from the perspective of security, availability, integrity, confidentiality, and privacy. Maintaining an effective risk register can help a company in making calculated decisions on risks they want to avoid, mitigate or manage, based on the likelihood of risk actually materializing and the severity of the impact of such a risk.

It builds trust with customers and other stakeholders

Infosec policies summarise the organisation’s security posture and explain how it protects IT resources and assets. This is critical in building trust with customers, employees, vendors and others alike that the company is reliable and is capable of managing their sensitive information and confidential processes.

It helps avoid unnecessary compliance penalties

Having a good infosec posture managed internally, validated with controls of the local infosec regulations – will help in avoiding such hefty fines which can go from several hundred to several million dollars.

Scrut Automation is an innovative and radically simple governance, risk, and compliance automation platform for growing startups and mid-market enterprises. With Scrut, compliance teams can reduce ~70% of their manual effort in continuously maintaining compliance towards SOC 2, ISO 27001, GDPR, PCI DSS, HIPAA, and CCPA. Schedule your demo today to see how it works.

With security breaches breathing fire under many companies’ noses, information security (infosec) has become a bigger issue than ever. If your business handles sensitive data of any kind, you should start taking steps to build trust with your established customer base.

You can use the ISO 27001 certification to show your customers that you take security seriously and have effective measures to handle the clients’ data. Therefore, in short, to show that you have their best interests at heart. To understand how it works, let’s go through this article that covers everything!

What do you mean by ISO 27001 certification?

The ISO 27001 standard is published by the International Organisation for Standardisation (ISO) and the International Electrotechnical Commission (IEC) in a combined effort to help companies and organizations bring order to their people, processes, and technology and to ensure the confidentiality, availability, and integrity of information. The primary goal of the ISO 27001 standard is to assess a company’s ISMS, that is, Information Security Management System.

The standard demands that companies should identify information security risks present in their systems and list out the corresponding controls that address them. ISO 27001 consists of 114 controls that are divided into 14 categories. There is no mandatory requirement to implement the full list of ISO 27001’s controls since they are simply a representation of possibilities that an organization may consider.

ISMS has to be examined by a professional auditor who ISO has accredited. They overlook the documentation to see if the company’s security measures live up to the set ISO 27001 standards.

However, the entire process of certification is governed by ISO 27001. Your company will get an ISO 27001 certificate if you pass the audit. One might wonder, if the certification is optional, who should you put your business through this assessment? Let’s see why!

How does an ISO 27001 audit serve your business?

If you’re wondering who would go through the pains of getting ISO 27001 certified, then the statistics may shock you because more than 33,000 organizations are currently ISO 27001 certified. Which makes us question, how does an ISO 27001 Audit serve your business?

The answer is simple: The benefits outnumber the troubles. Here is a list of the rewards you can receive after pursuing ISO 27000 compliance:

1. Law Compliance

Certain restrictions are imposed by the GDPR (European Union’s General Data Privacy Regulation) and HIPAA (the United States’ Health Insurance Portability and Accountability Act). Failure to meet these restrictions can mean fines; hence, an ISO 27001 certificate ensures that your organization complies with all data privacy laws.

2. More trust means more customers

The ISO 27001 certification and compliance make a big difference for potential clients and customers. How? Because they are well aware of the increasing risks posed by data breaches, they take information security into serious consideration when deciding what companies to work with.

To conclude this part, we can only say that every organization seeking ISO 27001 compliance has its own reasons. The choice to pursue or not is entirely your decision!

Difference between ISO 27001 and SOC compliance

​	ISO 27001	SOC
​Type of Security	The aim of ISO 27001 is the same as SOC but it works in a more restricted way. It demands that organisations must build and document their information security management system for effective compliance.	SOC refers to a set of guidelines that are more free and flexible in their approach to measure what your company is doing to protect the customers’ data.
​Area (geographically)	ISO 27001 is better known outside North America and hence, is used widely outside of that region.	They are more widely known in North America and carry more prestige there.

SOC certification can be defined as a set of criteria based on the guidelines introduced by the American Institute of Certified Public Accountants (AICPA). Rather than assessing companies based on a pre-written control checklist as done in ISO 27000, the SOC compliance has fairly flexible standards for every organization under audit.

In the end, however, both of them are fairly the same, with about 95% of controls copied in ISO 27000 and SOC criteria. The most suitable choice for your company depends primarily on the geographical location. A SOC report holds more prestige in the United States, while the ISO 27001 certification is more prestigious in the rest of the world.

Also, check out our article on 8 Key Differences Between SOC 2 and ISO 27001.

What are the set standards for ISO 27001?

The ISO 27000 family consists of 12 separate standards. However, in case you’re looking to get an ISO compliance certificate, then ISO 27001 is the only mandatory set. That said, you must have a working knowledge of the other sets to determine which ones are applicable to your business.

ISO 27001

ISO 27001 points out the requirements for establishing a compliant ISMS. It is mandatory to meet these requirements If you want to get a certificate. What are these requirements? So, ISO 27001 has listed its requirements in detail in seven clauses. It demands that an Information Security Management System should be

1. Clearly documented
2. Supported by senior leadership
3. Capable of anticipating and mitigating risks
4. Supplied with all the resources, it needs to function
5. Be regularly reviewed and updated.

Annex A under ISO 27001 has a list of specific controls that your organization can use in order to meet these requirements. It includes 114 ideas that you may find relevant.

ISO 27002

The next set is ISO 27002, which has been built based on the controls discussed in Annex A of ISO 27001. While Annex A provides a quick description of every control, ISO 27002 lists them out in detail.

It is useful because every company under ISO 27001 audit needs to address the relevant controls for them. For instance, you may not have any remote employees, so you don’t need to implement controls that supply information on leaving company computers in public spaces.

ISO 27003

The ISO 27003 is responsible for providing general guidance for building an ISMS. It is a great resource that is useful during the pre-audit phase, especially during gap analysis.

ISO 27004

The next set standard, ISO 27004, is built as an extension of ISO 27003 since it is useful in suggesting ways to evaluate and study the security of your information security management system. It also comes in handy when organizations measuring has to determine which of the listed controls in ISO 27002 can be used for audit preparation.

ISO 27005

ISO 27005 is solely dedicated to risk management. Forecasting, analyzing, and mitigating risk is crucial parts of ISO 27001 certification, and since this standard deals in these areas, it is beneficial to study it in as much detail as possible.

ISO 27006

The next set of standards, ISO 27006, determines whether or not a firm is qualified to conduct ISO 27001 audits. This standard is not applicable or in your interest, if

you do not deal with the same field.

ISO 27007 and ISO 27008

The ISO introduced this pair of standards in 2019. They are influenced by ISO 27006 and provide guidelines for accredited organizations on how to conduct ISMS audits.

It is beneficial if you read this standard before you seek an ISO 27001 certificate for your company since it will give you an idea of what your auditor will ask while they evaluate your information security management system.

ISO 27017 and ISO 27018

ISO 27017 and 27018 were first introduced in 2015 when cloud services were beginning to boom. They are responsible for providing controls to secure any and every data your company stores in the cloud.

ISO 27033

ISO 27033 is responsible for governing network security. While ISO 27002 consists of several controls for securing a company’s internal network, ISO 27033 is built on these controls and offers suggestions for effectively implementing them.

ISO 27701

ISO 27701 is one of the newest ISO standards and is centered on privacy. It was introduced in response to the strengthening of GDPR by the EU and, in turn, demanded organizations to take “appropriate measures” to secure the private information of users. It is mostly focused on suggesting guidelines to build a privacy information management system (PIMS) in line with your ISMS.

What is the cost of getting an ISO 27001 certification?

The cost of an ISO 27001 audit can vary depending on the size of the organization. It is usually noticed that larger companies usually build their ISMS or information security management system with a greater scope, which directly translates to a longer duration for audit. And we all know the longer the auditor spends at your offices, the more they will cost you.

For instance, a company with 50 or fewer employees can be estimated to spend between $5,000 and $10,000 on the ISO 27001 certification audit for three to six days. After which, you can add approximately $1,800 for every extra day of the audit. On the other hand, a large company with 500 or more employees can be estimated to spend about $19,000 for 11 days of auditing.

Despite estimation, the absolute price of the audit cannot be fixed because there is more to the story. The actual audit may only take weeks, but preparation (which also adds costs) might take up to six months at a mid-sized company. You need to take into consideration the expenses for those six months, where you would either be required to hire new contract employees or shift current employees from their regular duties.

Requirements for passing ISO 27001 audit process

Only getting adequate knowledge about the ISO 27000 standards will not help you get certified. In order to get an audit using the ISO 27000 series, you will have to follow a few guidelines. These are as follows.

Selecting the right auditor

Choosing an auditor is an essential and often overlooked part of the compliance process. You must take on this search with the mindset of hiring a new employee and performing proper protocols.

Perform an internal audit first

Performing an internal audit won’t just help you get ready for Stage 1 and certification audits but also get you prepped to maintain the ISO 27001 certification after you receive it. It is a fruitful practice since ISO 27000 demands organizations to perform internal audits regularly.

Establish the right controls

It is imperative you go through all the standards in the ISO 27000 series because they are all there for a specific reason. That reason could be either to offer you advice, help you sneak a peek into your auditor’s mind, or advise on what controls will be perfect for your company.

Check for automation tools

Using compliance automation can make preparing for an ISO 27001 audit much easier. With Scrut, you can integrate all the technology present in your information security management system, automatically scan for potential risks and violations, and improve your security.

Conclusion

Not every established Information security Management System can meet the standards laid out in the ISO 27000 series, which is also the reason why the time taken to complete ISO 27001 compliance can vary from a few weeks to a few months, depending on the baseline.

Scrut Automation is a one-stop shop for compliance. Our software provides the fastest solution for achieving ISO 27001 standards, making it an ideal choice for busy startups. Schedule your demo today to see how it works.

The General Data Protection Regulation (GDPR) is a data protection and privacy regulation that applies to the European Union (EU) and European Economic Area (EEA). Often regarded as one of the most stringent data security and privacy laws globally, GDPR sets a high standard for compliance.

While GDPR was crafted and enacted by the EU, it extends its reach to encompass any entity worldwide that handles the data of EU residents, regardless of their geographical location. This regulation is known for imposing severe fines and penalties on those found in breach of its provisions. Consequently, it’s imperative for organizations, irrespective of their global presence, to familiarize themselves with the fundamental guidelines outlined in GDPR. This blog covers everything you need to know about the regulation.

Key definitions of GDPR

Some of the terms used in the GDPR as well as in this article, are defined below.

• Personal Data: Personal data is the information that pertains to an individual who can be identified directly or indirectly using this data. Location, gender, biometric data, ethnicity, religious beliefs, etc., are examples of personal data. 
• Data subject: The individual whose data is being collected, processed, or transmitted is called the data subject.
• Data controller: The person who decides how and when data will be processed. An owner or an employee of the organization collecting the data is the data controller.
• Data processing: Any automated or manual process that is carried out on the data is called data processing. 
• Data processor: Data processor is a third-party person or organization that processes data on behalf of the data controller. 

The scope of GDPR

An organization that processes the data of EU citizens or residents or sells goods or services to such people is covered under the GDPR even if it is not located in the EU. It also applies to organizations located in the EU, even if the data is stored or processed outside the EU. If the organization monitors the online behavior of EU residents and citizens, then it is covered by the GDPR regulation.

However, the following are not covered under GDPR:

• Data collected for “purely personal or household activities.” For example, collecting personal information like email addresses or phone numbers of friends and family.
• Data collected for anything other than “professional or commercial activities.” For instance, collecting personal information about somebody for purposes not related to business. 

GDPR compliance for businesses

If you are covered by GDPR regulations, here is a checklist for you to follow:

1. Data Mapping and Audit

Data mapping is the process of identifying and documenting all the data an organization handles, its storage location, who has access to it, and how it is used. This step helps the organization have clear visibility of the data they are controlling and the risks associated with it. Once the organization is aware of the risks, it can develop policies and procedures to protect the data.

During the GDPR audit, the auditor assesses the mapping documentation, policies and procedures implemented to maintain data privacy, and measures to protect that data from verifying whether they are in compliance with the GDPR. The auditor also verifies whether there is any non-compliance and suggests corrective actions.

2. Lawful basis for processing data

Under the GDPR, there are six bases where the organization processes customer data. It is crucial for GDPR compliance that the organization recognizes and documents the lawful basis. They are as follows.

• Consent: The data subject has given express consent to use their data for a specific purpose.
• Contract: There must be a contract to process customer data.
• Legal obligation: The data controller must follow the legal requirements to process the data.
• Vital interest: Data processing is necessary to protect the interest of the data subject or another natural person.
• Public task: The controller either processes data in the public interest or in exercising the official authority vested in them.
• Legitimate interest: The processing is necessary for the legitimate interest of the controller or third parties.

3. Data subject rights and handling of requests

A data subject has several rights under GDPR. These rights include:

When the data subject requests to exercise any rights, the controller must adhere to them immediately and no later than a month after receiving such request. If the request is complex and requires more time, the controller can extend it up to two more months. 

The request can be met after authentication of the data subject’s identity. To verify it, the controller may ask for further information. The response must be concise, clear, and in an easily readable format using plain language.

If the controller refuses to meet the data subject’s request, they must inform the data subject of their reasons for doing so. The data subject can lodge a complaint with the supervisory authority and seek a judicial remedy.

4. Appointment of Data Protection Officer (DPO)

If you are a large-scale organization, regardless of whether you are a controller or a processor,  you will be required to appoint a data protection officer (DPO). You may appoint a DPO voluntarily, with the same rules applying to you too. 

A DPO is responsible for monitoring the organization’s compliance with GDPR. They provide advice on data protection and data breach notification while acting as a contact point between the organization and the regulatory authorities.

The DPO must be highly knowledgeable and possess expertise on the regulations. They report directly to the highest authority in the organization. 

5. Security measures

GDPR takes data security very seriously and requires the organization to follow the basic principles of security, namely confidentiality, integrity, and availability. The controller and processor must maintain appropriate security measures, including:

• Considering  the use of pseudonymization and encryption to protect personal data.
• Implementing appropriate measures to ensure that only authorized employees get access to protect user data.
• Controllers must test the effectiveness of security measures regularly.
• Controllers must have plans for efficient incident management, including detecting, reporting, and investigating the data breach. 
• Controllers must carry out data protection impact assessments (DPIA) for high-risk processing activities.
• Controllers must ensure third-party risk management if somebody else is processing the data.

Failure to implement adequate controls to protect data can bring fines and penalties, reaching millions of pounds. 

6. Data breach reporting

One of the other steps for being GDPR compliant is having a solid data breach reporting plan. If your organization is breached, you are required to notify the authorities within 72 hours of the detection. For a large organization, the DPO can help you send out the breach notification. If the notification is not sent out within the stipulated time, the controller must give the reasons for the delay to the relevant authorities.

The data breach notification should also be given to the data subjects if their personal data is breached. The notification must include the extent and consequences of the data breach along with the measures taken by the organization so far. It should also give the contact details of a designated person to gain more information about the breach. Failing to follow the notification requirements could lead to significant fines and penalties. 

7. International data transfers

The controller must meet certain conditions if the data is transferred to a location outside the EEA. The laws of the country in which the data is transferred are adequate for the security of the data. If the laws are not adequate the organization can use standard contractual clauses (SCC) approved by the European Commission to ensure data protection. SCC is nothing but a standard contract between the controller and the data subject for data protection. 

There are times when the company transfers data outside EEA to within its own group of companies. The binding corporate rules (BCR) are the internal rules to protect personal data. Apart from these, if the organization obtains explicit consent from the data subject, it can move the data outside EEA.

Consequences of non-compliance

If you are covered under GDPR, and you fail to comply with the regulations, then you will face the following consequences:

1. Fines and penalties

If there is an infringement of regulations, the data protection agencies will impose a temporary or definitive ban on data processing coupled with a fine of up to €10 million or 2% of the business’s total annual worldwide turnover for Tier I and €20 million or 4% of the business’s total annual worldwide turnover for Tier II.

2. Damage to business reputation

As a result of non-compliance, the business’s reputation will be damaged. It may face legal charges from the data subjects and other stakeholders. The authorities might investigate the data breach leading to a loss of reputation.

3. Loss of Customers and Revenue

Customers lose trust when the organization fails to protect their data. It has been observed that customers don’t buy from an organization whose data has been breached, causing revenue loss for the organization. 

How can Scrut help in being GDPR compliant?

Scrut can help you simplify your GDPR compliance and audit processes. Let’s take a look at how it does this.

1. Conduct a GDPR Gap Analysis

The Scrut platform allows you to carry out everything you need for GDPR gap analysis, including cloud risk assessment, control reviews, employee policy attestations, and vendor risk assessment. It helps you identify the gaps in compliance swiftly and also helps you to fix them.

2. Develop GDPR-Compliant Policies and Procedures

The Scrut library boasts an extensive collection of more than 50 pre-constructed policies, offering you both guidance and the option to implement them directly. Additionally, our platform allows you to upload your customized policies to establish your information security program. If you wish to make modifications to the pre-existing policies, our platform provides an easy and straightforward process, including the option to have them reviewed for accuracy by our team of experts.

3. Streamline compliance workflows

To streamline your compliance workflow, Scrut lets you create, assign and monitor tasks within your team and share artifacts. You can also collaborate with the auditor on the platform for faster audits.

4. Automate evidence collection

Scrut lets you integrate 70+ commonly used applications for evidence collection. More than 65% of the evidence collection is automatic on the platform.

5. Monitor controls continuously

You can identify gaps and critical issues in real time with continuous automated control monitoring. You can receive alerts and notifications to maintain daily compliance.

6. Access to GDPR compliance experts

Scrut lets you consult with GDPR auditors, consultants, and in-house GDPR experts. 

7. Train your employees

You can select a training program for your employees and keep an eye on their progress on the platform dashboard. You can also assess your employees to know how much they have retained and retrain them if needed.

Bottomline

GDPR, a European Union (EU) regulation designed to safeguard the data of EU citizens and residents, applies globally to any organization handling this data, irrespective of its geographical location.

We’ve explored the essential checklist that businesses must adhere to when operating under GDPR, recognized as one of the world’s most rigorous data protection laws. Non-compliance can result in hefty fines and penalties, often in the millions of euros.

Achieving compliance with GDPR demands a substantial investment of time and effort. Here, Scrut steps in to simplify the process, making it easier and more streamlined to pass the GDPR compliance audit successfully.

If you have any questions regarding how Scrut makes your GDPR compliance a walk in the park, you can schedule a demo of our products.

FAQs

Hey there, savvy marketers! We are here to guide you through the impact of GDPR, the General Data Protection Regulation, on your marketing efforts. 

Whether you’re a small business owner or part of a multinational corporation, understanding and embracing GDPR is vital for maintaining customer trust and avoiding hefty penalties. 

However, meeting its requirements is not always easy. It can be difficult to handle given the evolving nature of data protection regulations, including figuring out how to get permission to use data and handle it.

So, let’s dive right in and explore how GDPR can shape your marketing strategies and tips and tricks to navigate GDPR.

Why does GDPR matter?

Personal data is so valuable that it’s being collected at an incredible rate, and it’s vulnerable to theft and misuse. The people who use customer data the most don’t fully understand how they should use it. 

Besides, customers do not even know why they receive emails and messages from brands they didn’t sign up for, and they divulge information without knowing why.

To tackle this, the European Union (EU) government developed a privacy regulation called the General Data Protection Regulation (GDPR).

GDPR is a comprehensive data protection law that came into effect in 2018. This set of regulations was designed to give EU, EEA, or UK residents more control over their confidential data. 

Its primary goal is to protect the personal data of individuals within the European Union (EU) and ensure that businesses handle this data responsibly. In short, GDPR is the core of Europe’s digital privacy legislation and outlines how the EU wants their personal data to be managed.

But here’s the crucial part: GDPR doesn’t just apply to EU companies; it has an extraterritorial reach, affecting any business that processes EU, UK, or EEA residents’ data, regardless of its location.

Why was GDPR introduced?

GDPR, by a long measure, is the most impactful regulation in place for data protection in a tech-driven generation.

The EU has long valued its citizens’ online privacy and believes that they should be protected and empowered rather than exploited or ignored. 

The EU regulators felt that the companies were misusing their citizens’ data for their own gain and that they should be transparent about how they were using the data. GDPR was introduced to end this and give back power to customers.

History of GDPR

GDPR is adapted from a document that was first adopted in 1980 and later modified in 1995. 

The outdated version could not cover the necessary data privacy principles for social media, smartphones, or any advanced web technology like artificial intelligence (AI) or virtual reality. The obsolete version was never a compulsion, so companies had a chance to opt out of it.

Since May 25, 2018, this is no longer the same. With GDPR, every company across Europe or companies that handle EU data must follow the data privacy principles.

What should organizations do to comply with GDPR?

Organizations that store customers’ personal data should be meticulous about what kind of personal information they want to collect and why. 

Organizations also need to regularly conduct privacy impact assessments, strengthen the way they seek permission to use the data, document how they use personal data, and improve how they communicate data breaches. Data mapping helps simplify GDPR compliance for organizations.

And since it’s a regulation, it cannot be opted out of or ignored. Companies failing to comply with GDPR are fined up to 20,000,000 EUR, or 4% of their annual turnover for the preceding financial year.

Implications of Failure to comply with GDPR

Let’s look at some statistics in terms of penalties. Within the last 12 months, some of the largest MNCs that failed to comply with GDPR have had to pay hefty fines.

• The world’s largest e-commerce company, Amazon Europe, was fined €746 million.
• The world’s most popular messaging app, WhatsApp Ireland, was fined €225 million.
• The world’s most used search engine, Google, was fined €90 million.

Not just big MNCs, but any company that violates personal data is heavily fined.

How does GDPR impact marketing?

In our digital age, personal data is the fuel that drives marketing campaigns. But with great data comes great responsibility. 

So let’s take a look at how how gdpr affects marketing.

GDPR injects a strong dose of responsibility by enforcing stringent rules on how data is collected, processed, and utilized. For marketers, this means an enormous shift in how strategies are crafted, campaigns are executed, and customer relationships are nurtured.

Key principles of GDPR

To operate within the GDPR framework and ensure GDPR compliance, marketers must grasp its key principles. 

• Data minimization (collecting only what’s necessary)
• Purpose limitation (using data only for its intended purpose)
• Accountability (demonstrating compliance). 

These principles guide your marketing strategies under GDPR’s watchful eye.

On the whole, GDPR is difficult to implement, especially for small businesses or sole proprietors. In reality, there are only 3 areas that marketers need to worry about to comply with GDPR:

• Data permission
• Data access
• Data focus

Data permission

Data permission, in simple terms, means that the user has the choice to decide whether an organization can store or use his personal data.

From a marketing perspective, the direct impact of GDPR’s data permissions is on lead generation forms. In the pre-GDPR era, the customer had no option but to receive promotional content. But now, that’s changed.

Let’s look at two different examples of how this can manifest.

1. Instead of assuming that leads and customers opt for a pre-ticked box to receive marketing emails, organizations now need to ask them if they want to opt in to newsletters by selecting the signup box.
2. “Refer a friend to claim an offer” program helps companies get information about the friend, like their email address or phone number, without their consent. GDPR does not allow companies to store or process data to send marketing emails to these referrals without their permission. They can only notify them about being referred. On that note, no marketing emails or messages should be sent to referees.

Data access

Have you ever observed the “unsubscribe” or “manage preferences” link at the bottom of a promotional email? 

“The right to be forgotten” is one of the cornerstones of the GDPR. It gives people the right to have outdated or inaccurate personal data removed from the companies’ databases.

The world’s most used search engine, Google, has been forced to remove pages/ cookies from its search engine results in order to comply with GDPR.

As a company marketer, it’s your foremost responsibility to ensure that your users can easily opt in or out of those marketing emails and messages. 

It’s easy for you and the customer if you include the unsubscribe link in the marketing template so that users can manage their data preferences.

Data focus

Marketing is a data game. Marketers will always tend to collect more information than is needed. For example, does a marketer really need to know someone’s favorite color before subscribing to a newsletter?

With GDPR in place, marketers should be able to justify the collection and processing of specific personal data legally. This means that companies must stop asking for “nice to haves.” 

For example, if you need to know the prospect’s favorite color, prove why you need it. Otherwise, try to avoid collecting any unnecessary data.

GDPR And marketing practices

1. GDPR’s impact on email marketing campaigns

Email marketing, a staple in any marketer’s toolkit, was not left untouched by GDPR. For B2B marketers, email addresses are the driving force behind lead generation. 

The earlier pre-checked opt-in for signing up for your mailing list or downloading content is now optional.

With its focus on consent and individual rights, GDPR transformed how email campaigns are executed. 

How will email marketing be affected by the EU GDPR?

• Marketers can no longer rely on vague opt-ins or pre-ticked boxes to collect email addresses. 
• Consent must be explicit, informed, and freely given. 
• Emails must also clearly state the purpose of data processing and offer an easy way to opt out.
• Buying an email list from third parties is strictly forbidden. That means email marketers can no longer automatically add these prospects or former customers to their mailing list.
• GDPR gives email subscribers rights over their data. If a subscriber requests to be forgotten or to access their data, you need to be ready. Have processes in place to handle these requests within the stipulated time frame. 
• An “unsubscribe” link is no longer enough; subscribers must have easy access to managing their data and preferences. This approach not only keeps you compliant but also strengthens your relationship with subscribers.

Best Practices for Obtaining and Managing Consent in Emails

• Your signup forms should be transparent, informing subscribers about what they’re signing up for and how often they can expect to hear from you.
• Implement a double opt-in process, where subscribers confirm their subscription to ensure explicit consent. 
• And remember, consent isn’t forever. Regularly review and refresh it to maintain compliance!

2. GDPR and marketing analytics

Marketing analytics provide valuable insights, but they can also involve processing personal data. With GDPR in control, marketing automation won’t be able to work as rigorously as before. 

The Information Commissioner’s Office (ICO) comes into the picture and fine heavy penalties if your marketing automation system sends out emails on your CRM’s (Customer Relationship Management) behalf.

CRM is a technology and strategy that organizations use to manage interactions with current and potential customers. CRM systems help businesses streamline processes, improve customer satisfaction, and build stronger relationships by centralizing customer data, tracking interactions, and enabling personalized communication and marketing efforts.

So, ensure your CRM database has only emails of customers who have given explicit permission to receive marketing emails. If someone opts out of an automated email sequence, ensure no further emails are sent to them.

Also, with GDPR in place, having the next email already scheduled is not a valid excuse anymore.

Also, under GDPR, your analytics practices need to align with data protection principles. Ensure that the data you collect is necessary for your analysis and that you have a lawful basis for processing it. Regularly review the types of data you’re collecting to avoid overstepping boundaries.

Anonymization and pseudonymization are your allies in the world of analytics. Anonymization involves removing personally identifiable information, while pseudonymization replaces identifying data with artificial identifiers. 

Both methods can reduce the risks associated with data processing while still providing valuable insights. Implementing these techniques can strike a balance between analytics and data protection.

Use of cookies

Cookies are small text files that are stored on a user’s device when they visit a website. They serve as data markers, tracking user interactions and preferences, allowing websites to remember users and personalize their experiences. 

In marketing, cookies play a crucial role by enabling businesses to understand user behavior, tailor content, deliver targeted ads, and improve overall engagement through data-driven insights.

Cookies and tracking technologies are commonplace in digital marketing. However, their use must respect user privacy. 

• Obtain informed consent for non-essential cookies and trackers. 
• Implement a cookie consent banner that allows users to choose the types of cookies they want to accept. 
• Make sure your privacy policy provides comprehensive information about the cookies you use, their purpose, and how users can control them. 

3. Public Relations (PR) and GDPR

Even with media databases such as PRweb and MyNewDesk in place, marketers still need to get the consent of the journalist before sending any marketing emails.

Journalists use platforms such as help a reporter out (HARO) and social media channels to give consent for marketers to contact them. 

However, GDPR allows for communication the other way around. That is, if a journalist reaches out to you, you can pitch product releases and share company information with them.

4. Social media marketing

Social media marketing provides unparalleled reach, but it also comes with a unique set of privacy considerations. Such platforms thrive on user-generated content, and behind every post, like, or share is personal data. 

GDPR brings social media marketers face to face with the responsibility of respecting user rights while leveraging these platforms for engagement.

As individuals interact with your social media content, they’re exercising their data rights. Be prepared to respond to data subject requests promptly. Provide accessible ways for users to access their data or request its deletion. 

Inform users about the data you collect through your social media efforts and how you intend to use it. Transparency and clear communication can foster trust and goodwill.

GDPR requirements: what marketers need to know

Although the GDPR law sounds intimidating and the fines issued by the ICO make you rethink your marketing strategy, it’s an excellent opportunity for marketers.

Now, marketers can develop targeted marketing campaigns that keep customers engaged with their brand.

Below are a few reasons why GDPR is a golden opportunity for marketers:

1. Consent Is Key

As discussed above, GDPR helps gain consent to use prospects’ or customers’ data. 

Under GDPR, obtaining valid consent is a must before processing any personal data. So, no more pre-ticked boxes or vague opt-outs! Be transparent about your data collection practices, explain why you need the data, and ensure individuals freely give informed consent.

For instance, instead of bombarding the user’s screen with a ton of emails, provide them with a range of options so they can choose what kind of marketing information they are interested in.

GDPR also helps you segregate customers based on their interests and create email campaigns accordingly, rather than sending a “one size fits all” email.

2. Right to be forgotten

Individuals now have powerful data subject rights. They can request access to their data, rectify inaccuracies, and even demand erasure—the famous “right to be forgotten.” 

As a marketer, you must be ready to address these requests within a specific timeframe. Under GDPR, you will be in trouble if a user opts out of emails and you still send them marketing emails.

Sometimes, we tend to store data in different places for different purposes. With GDPR in place, it’s almost mission-critical to store customer information in a single platform solution like CRM to track data permissions. 

A CRM solution will create a single point of view on all customers and break down silos of customer information to be GDPR compliant.

3. Transparency

Being GDPR compliant requires you to be transparent about data access, data permission, and data focus. Being transparent in business will establish trust and improve customer engagement. Be honest with your customers about what you do.

You must demonstrate that an individual’s data is being treated with respect and held securely.

What tips and tricks can marketers use to navigate the GDPR?

GDPR is clearly influencing how businesses work. If your business is still not GDPR compliant, we have a checklist to help you meet those requirements.

1. Audit your database

Remove the users’ Personal information (PI) from your database if they opt-out from your mailing list. For new users, send an automated email to confirm their subscription.

2. Create tailored content

Create a tailored marketing strategy for prospects with lead magnets such as eBooks, PDFs, and white papers in exchange for collecting their PI. This way, you change your prospects into potential customers.

3. Flash a pop up on the website

Flash a pop-up when a person visits your website to read product launches, product news, blog posts, or company news, and record which customers engage with these pop-ups. This way, you can segregate the users and send them relevant marketing emails. Of course, send marketing emails only if you have received explicit permission.

4. Use a CRM system

Gone are the days of using Google Docs and spreadsheets to store customer information. Use a CRM system to centralize customer data and segregate customer personas based on their interests. Use these personas to develop tailored marketing campaigns.

1. Train your sales team: Train your sales team with new sales techniques. Train them on how they should reach new prospects on social media and how to share relevant content.
2. Collect only required data: What would you do with knowing customers’ favorite color until and unless you are selling something along those lines? Only collect data that is required, nothing more, nothing less.
3. Update your privacy policy: Review your current privacy policy and update it in accordance with GDPR requirements.

Tips for Navigating GDPR

1. Audit Database:

• Remove unused emails and PI from opt-outs
• Confirm subscriptions for new users via email.

2. Tailored Content: 

• Exchange lead magnets for PI to convert prospects.

3. Website Pop-Up:

• Display pop-ups, segment engaged users.
• Send emails with explicit permission.

4. Use CRM System:

• Centralize data, segment based on interests.
• Develop tailored marketing campaigns.

5. Train Sales Team:

• Train in new techniques and social outreach.

6. Collect Required Data: 

• Gather only necessary information.

7. Update Privacy Policy:

• Align with GDPR in your privacy policy.

The future of GDPR and its impact on marketers

Trends and developments in data protection regulation

Data protection is a swiftly evolving field, and GDPR is just the beginning. As technologies like artificial intelligence and blockchain continue to reshape our digital landscape, data protection regulations are likely to adapt. 

Stay informed about emerging trends and be prepared to integrate new practices into your marketing strategies.

Preparing for potential changes in GDPR requirements

Regulations are never set in stone. GDPR itself may evolve over time as lawmakers respond to challenges and advancements. 

To future-proof your marketing practices, build a flexible framework that can accommodate changes. Staying agile allows you to navigate regulatory shifts while continuing to deliver personalized, respectful experiences to your audience.

Maintaining customer trust and loyalty through GDPR compliance

GDPR compliance isn’t just about ticking checkboxes—it’s a commitment to treating your customers’ data with care and respect. 

By implementing GDPR principles, you demonstrate that you value your customers’ privacy as much as you value their business. This, in turn, fosters trust and loyalty. 

When your customers know you have their best interests at heart, they’re more likely to become lifelong advocates for your brand.

With a company like Scrut, you can employ automation to ensure compliance with GDPR.

Wrapping Up

GDPR, with its emphasis on data protection, privacy, and individual rights, has transformed marketing into a more responsible and customer-centric endeavor.

Embracing GDPR isn’t a burden—it’s a chance to set yourself apart in a noisy digital landscape. So, by making data protection a priority, you not only adhere to legal requirements but also foster trust, solidify customer relationships, and build your brand’s reputation. 

Showing that you can be trusted with data, is a priceless attribute to possess. Therefore, as you embark on your data-driven marketing journey, remember that GDPR isn’t just a regulation—it’s a compass guiding you towards ethical and enduring success.

Scrut is an innovative and radically simple governance, risk, and compliance automation platform for growing startups and mid-market enterprises.  With Scrut, you can easily perfect and automate your marketing practices to align with GDPR. Schedule your demo today to see how it works.

FAQs

If you’ve taken the step to pursue SOC 2 compliance, you’d already be aware of the criteria you need to satisfy to accomplish it. These principles are well-drafted, keeping in mind the questions your customers may pose.

Are you safe holding your clients’ data? Do you have the right security controls in place? How are you fighting against security breaches? These questions are generally the ones you get to hear because they center around the most important thing when handling data: security.

Besides security, other trust service principles can help you create a reputable image for your organization; however, they are optional. Every company has certain criteria which help them realize which security principles apply to their firm.

So, let’s find out what they are and what each of them includes before we dwell on how to satisfy them.

What is the SOC 2 Trust Service criteria?

No two organizations have the same procedure when it comes to SOC 2 compliance, which is one of the reasons why there can not be a uniform formula when it comes to choosing the trust service principles relevant to your company for the SOC 2 examination.

Your attestation criteria which are critical for SOC 2 compliance, are based on the trust principles you select. Thereby, your selected trust service criteria must be suitable and available to report users. The AICPA or American Institute of Certified Public Accountants has listed out certain attributes that can help you select suitable criteria for your firm. They are as follows:

• Relevance: The selected criteria must be relevant to the assigned subject ma
• Objectivity: There should not be any bias in the selection of principles
• Measurability: The principles should be responsible for measuring the subject matter, both qualitatively and quantitatively
• Completeness: The appointed criteria must not disregard any relevant factors that can impact the decision-making process of users

There are 5 Trust service principles, also known as sections in SOC 2 compliance control criteria, and are used to evaluate the relevant controls for information and systems. These principles are named:

1. Security
2. Availability
3. Processing integrity
4. Confidentiality
5. Privacy

What does each service criteria include?

Whether or not you have to add one or more trust service principles to your attestation criteria depends on the user demands, legal requirements, as well as contractual requirements. To figure out the demand, you can first determine what each trust service principle includes in detail and assess accordingly.

1. Security

The recent and not-so-recent security breaches at Facebook, Microsoft, etc., have constantly served us reminders that no organization, no matter how secure, is immune from potential data breaches. This is why as a SaaS seller or provider, all you can do is effectively implement useful data security systems and put internal controls in place to prevent these threats.

Now comes the big guns: your customers! They are the primary reason why the Security Trust Service Principle is needed since they need evidence of these proper security systems before they can believe you and sign any deal.

‘Security’ implicates data protection during creation, gathering, storage, processing, use, and transmission. There are certain set criteria under security that determine how you audit and evaluate your security system’s effectiveness for protecting user data.

The criteria tested as part of this trust service principle are defined as the common criteria. It is mandatory to include security TSC for all SOC 2 reports.

2. Availability

This criterion is critically needed for cloud service providers who provide cloud computing or cloud data storage services since their clients want to access data during operation. Most of your clients will require you to add on the availability criteria in a SOC 2 report so that they can be assured of minimal service disruption.

This availability trust service principle largely refers to the accessibility of resources and data applicable to your systems. It also includes the services and products you provide to clients. It is responsible for assuring the clients that you will reach the required performance levels to meet their needs.

The minimum acceptable performance levels are not decided beforehand; instead, it is upon the service providers and intended users to agree on a set required level. That said, it does, however, require your systems to have the proper controls in place to allow accessibility for monitoring, operations, and maintenance.

3. Processing Integrity

Processing integrity is a crucial trust principle, especially when financial fraud such as Authorised Push Payment (APP) fraud is more evident than ever these days. If you are someone who deals in financial reporting services or eCommerce, then most of your customers will require you to add this Trust Service Principle in your SOC 2 report as evidence to showcase that your transaction processing is accurate.

For instance, if your firm provides a financial application, you need to make sure your system processing is valid, timely, complete, correct, and fully authorized to meet the set standards.

Therefore, it can be said that processing integrity helps in evaluating the security systems to decide if they perform the intended functions in an acceptable way that is free from any error, omission, and/or accidental manipulation.

4. Privacy

Privacy is an irreplaceable component in building trust with your clients. As far as SOC 2 compliance is concerned, the privacy principle refers to how your organization gathers, stores, uses, preserves, reveals, and disposes of critical personal information. It deals with personal information only, unlike confidentiality which we’ll learn soon.

Following are the areas around which privacy criteria is assessed:

1. Providing notices of objectives: If you send privacy notices to users, customers, and anyone who engages in your data collection.
2. Choice of consent: Whether you communicate about the choices of collection, use, retention, disclosure, and disposal of personal information to individuals.
3. Collection: Only personal information that is in line with the privacy policy.
4. Limiting the Usage: Setting limits for the use, retention, and disposal of personal information.
5. Access: If or not you provide your users and customers access to their personal information for review, correction, or updates.
6. Disclosure and notification: You should disclose personal information collected from the users only with their consent. You must also provide mandatory breach notification to all the affected parties.
7. Quality: Your company should only collect accurate, up-to-date, complete, and relevant personal information.
8. Monitoring and enforcement: This means that there should be monitoring compliance for privacy policies, including a segment for users and customers to address privacy-related inquiries, complaints, and disputes.

5. Confidentiality

The confidentiality trust service principle is applicable to service organizations that store and collect confidential information. Confidential information can include various types of sensitive data ranging from financial reports, passwords, and lists of potential customers to business strategies, customer data, and other intellectual property.

Adding the principle to your organization’s SOC 2 report means showcasing the ability of your company to safeguard the collected confidential information through every phase. These phases range from collection to disposal.

Examples of controls to satisfy the common criteria-security TSC

Here are certain examples using which you can satisfy the attestation of trust service principles during the SOC 2 compliance procedure. These are especially important if you are starting off with the Security TSP, which is a common criterion, to begin with.

1. Maintaining password security

You can achieve compliance with these criteria only if you have readily enforced the use of a password manager. It solves many questions that clients ask, like How safe are their passwords? Or are your employees following the password policies? Do you have any valid password policies?

2. Security awareness training

Training your employees and new hires about the proper security protocols, do’s and dont’s is very important, and so is proving that you have. The security awareness training will come in handy during the SOC 2 compliance process where your employees are also questioned. Compliance requires you to prove that you have consistent policies in place and that your employees have learned them and follow them.

3. Employee resigning controls

SOC 2 audits are very thorough in their compliance research, and they also take into regard whether or not you have controls in place to prevent security breaches once your employee who was responsible for undertaking internal controls leaves the company.

You must ensure that there are programs in place to prevent this situation in case you don’t yet.

4. Physical access controls

Controls like door locks, employee ID card requirements and security gates come under physical security controls since they have the power and responsibility to prevent potential unauthorized access to the company’s data.

Frequently Asked Questions (FAQs)

Here’s how you should decide the right service criteria for your business

As has been mentioned in this article, trust service criteria must be selected on the basis of relevancy, objectivity, measurability, and completeness. However, since there are so many trust principles and categories to consider, it can be challenging to pick the criteria or criteria that are applicable to your profile.

This is where Scrut comes into the picture. Scrut Automation is a one-stop shop for compliance. Our software provides the fastest solution for achieving and maintaining SOC 2 compliance, making it an ideal choice for busy startups. Schedule your demo today to see how it works.

Pursuing and getting compliant with a proven security control framework is very critical in today’s world. With the rise of global cyber security threats, there has been a substantial increase in data breaches, which has subsequently led customers to lose trust in many companies.

If your company deals in sensitive information or any data collection, then compliance with a widely accepted framework will benefit you immensely. Two of the most valued information security control frameworks are SOC 2 and ISO 27001. In this article, we will study both of these frameworks separately and compare them to see what sets them apart.

SOC 2

System and Organization Controls (SOC) 2 is a security control framework developed and introduced by the American Institute of Certified Public Accountants (AICPA). It aims to provide set controls to manage information security across processes, systems, and tools for a company. These are anchored on how an organization handles customers’ data.

SOC 2 audit tests a company for the operational effectiveness of the established security processes, systems, and controls. It determines how secure and safe they are based on the five trust principles: security, availability, processing integrity, confidentiality, and privacy.

Once you’ve successfully completed a SOC 2 audit, you will receive a SOC 2 report which covers the auditor’s point of view on whether your company meets the control requirements across the relevant trust criteria.

ISO 27001

ISO 27001 is an internationally accepted information security standard. It aims to guide an organization, irrespective of its size, industry, or geography, in protecting its data in a systematic way, through the adoption of an Information Security Management System (ISMS). Depending on the scope outlines, the ISMS can focus on a part of or the entirety of an organization’s operations.

ISO 27001 aims to protect sensitive information through 3 core principles: confidentiality, integrity, and availability.

Once an ISO 27001 audit is successfully completed, the organization receives a certificate that outlines the specific requirements that were met. The certificate is valid for 3 years, however annual surveillance audits are needed in the second and third years. Recertification is required every 3 years to maintain compliance.

SOC 2 vs ISO 27001

Both SOC 2 and ISO 27001 can be leveraged to demonstrate to customers that you can be trusted with their data. Both SOC 2 and ISO 27001 are time-consuming, resource-intensive, and expensive, hence it is important to weigh the pros and cons of each before opting for one.

1. Target market

The geographical location of your target customers is an essential parameter to consider while deciding which framework will be the most effective and ideal. SOC 2 is single-handedly the most used and relied upon infosec standard for assessing vendors for information security controls in the United States. However, it is not very well recognized as much outside of the United States.

If your target customers reside primarily outside of the United States, ISO 27001 is going to be a more relevant standard, ISO 27001 has become the industry standard framework for organizations across the globe.

2. Assessor requirements

Only a Licensed Certified Public Accountant (CPA) has the authority to issue a SOC 2 report. On the other hand, an ISO 27001-accredited registrar is required to perform the audit and award the organization with an ISO 27001 certification. Unlike SOC 2, t is mandatory to meet all the set requirements before the certification is issued to you, while for SOC 2, there is no certification, only a report that consists of the auditor’s opinion.

3. Flexibility

SOC 2 is anchored on 5 Trust Services Criteria (TSC) – security, availability, processing integrity, confidentiality, and privacy. Companies have the flexibility to choose which Trust Service Criteria to get audited for – and they can choose one or more of the TSCs depending on which is the most relevant for them. It is important to note that amongst these TSCs, Security is mandatory, and each company will have to be audited for security as part of its SOC 2 audit.

ISO 27001 has 7 requirements across 114 prescribed controls, spanning firewalls, encryption, physical access controls, infosec policies, and more. It is mandatory to meet all the set requirements for the certificate to be issued.

4. Auditor cost

The auditor cost can vary depending on the credentials and experience of an auditor as well as the outlined scope. However, ISO 27001 audits are known to cost significantly more than SOC 2, as ISO 27001 requires a higher degree of documentation to prove compliance.

An organization can receive a substantial discount if it decides to opt for both audits through a single auditor.

5. Audit timeline

ISO 27001 audits typically are longer than SOC 2 audits. A SOC 2 Type I audit can take 4-6 months and Type II audit can take 6-12 months (including 2-4 months of audit preparation).

For an ISO 27001 certification, audit readiness requires 4 months on average. It takes additional 6 months on average to complete Stage 1 and Stage 2 audits

6. Report type

Though both standards require an external audit, the end result is very different. Upon successfully completing an ISO 27001 audit, the auditor issues a certificate of compliance that confirms that the organization meets the (ISO) requirements for protecting information and managing risk.

On the other hand, at the end of a SOC 2 audit, the auditor will provide a SOC 2 attestation report, which covers the auditor’s opinion on the sufficiency and efficiency of the organization’s security controls to satisfy the relevant Trust Services Criteria.

7. Penetration testing requirements

ISO 27001 audits require that penetration testing be done as a part of certification. SOC 2 audits, on the other hand, have more flexibility on the topic. For the Type I audit, you don’t require penetration testing, but for the Type II audits, you may be demanded as a part of the procedure.

Penetration testing requirements vary widely based on the auditor, the needs of the intended customer, and the nature of the environment.

8. Renewal procedure or recertification

Both the frameworks require regular renewals to remain compliant. ISO 27001 requires recertification once every three years, with annual surveillance audits in between. On the other hand, SOC 2 reports need to be renewed annually

Here’s a table summarizing the important determinants of both the security frameworks for you.

Variables	SOC 2	ISO 27001
​Nature of compliance	Audit Framework	Certification
Geographical preference	US-based (North America)	International
Time to complete	6-12 months	6-24 months​
Average audit cost	$10-60K	$20-70K
Subject matter	Type I assesses the design of controls at a specified date and Type II measures the effectiveness of the controls over a period of time	It assesses the design (Stage 1) and operating effectiveness (Stage 2) of the ISMS or information security management system at a point in time
Compliance focus areas	5 Trust Services Criteria : Security (Mandatory), Availability, Confidentiality, Processing Integrity, Privacy	CIA Triad: Confidentiality, Integrity and Availability (All mandatory)
Control requirements	80-100 controls only for the common criteria (security), increasing depending on the TSCs chosen for the audit	80-100 controls only for the common criteria (security), increasing depending on the TSCs chosen for the audit
Accreditation body	AICPA also known as the American Institute Of Certified Public Accountants	ANAB or ANSI- ASQ National Accreditation Board
Audit result	SOC 2 attestation report	ISO report and certification
Renewal duration (Expiration)	Annual renewal	Recertification every 3 years, with recommended annual surveillance audits in between

Which is better for your company: SOC 2 or ISO 27001?

Both ISO 27001 and SOC 2 frameworks are industry-standard security frameworks that will fortify customer trust in your organization’s infosec posture. The critical parameter for deciding between SOC 2 and ISO 27001 boils down to what your customers expect and require. Many companies outside of the United States will accept a SOC 2 report. Similarly, a lot of companies in the United States will accept an ISO 27001 certification. You should also consider the scope of controls, cost, and project timelines.

As your company scales, it is highly likely that you will need to undergo both audits to comply with the needs of your target customers. The great news is that according to the AICPA-developed mapping spreadsheet of SOC 2 vs ISO 27001 controls, there’s almost an 80% overlap between SOC 2 and ISO 27001 criteria.

As such, many organizations opt for getting audited for both SOC 2 and ISO 27001 together – given most of the controls are similar. This can reduce the cumulative effort the organization has to spend, as well as the corresponding auditor costs.

Frequently Asked Questions (FAQs)

Start your compliance process with us!

Scrut Automation is an innovative and radically simple governance, risk, and compliance automation platform for growing startups and mid-market enterprises. With Scrut, compliance teams can reduce ~70% of their manual effort in continuously maintaining compliance towards SOC 2, ISO 27001, GDPR, PCI DSS, HIPAA, and CCPA. Schedule your demo today to see how it works.