3 Things CTOs Should Know About SOC 2 Compliance

Mike DeKock, Founder and CEO at MJD Advisors

As data security increases with the demand to seal systems against the overwhelming wave of cyber attacks, more startups have taken to SOC 2 reports to prove their cyber hygiene to clients. Many even do it to enhance their business opportunities. However, you might still have your hangups about the auditing process, as it’s been portrayed as a difficult requirement you’d rather avoid.

The truth is the compliance sector has been undergoing massive shifts in recent years to adjust to business demands, completely changing how companies can demonstrate their data security. For example, gathering evidence isn’t done manually anymore, which used to require a lot of effort and time from everyone involved. Governance, risk, and compliance (GRC) software now automates those tasks to run in the back of your operations — it’s also a booming market estimated to make $37.63 billion within the next four years.

Still, misconceptions run high, with companies even resorting to shapeshifting their operations overnight to please auditors rather than doing it for the well-being of their business. While temporarily helpful, this isn’t what good compliance should yield for you. Instead, it should look like a growth accelerator that showcases your good practices and creates positive change within your organization.

So, if you’re a CTO, a senior engineer, or any other business leader responsible for data compliance, it’s time we debunk and clarify three things for you to confidently undertake a SOC 2 examination.

What You Know About SOC 2 Is in the Past

While SOC 2’s history stretches back to the 1970s, it’s a relatively new compliance standard established in 2010. It’s been almost 15 years, yet the process has only dramatically shifted in the last couple of them. It’s not filled with endless print screens and form after form of security questionnaires. However, this is how the majority of people still perceive compliance.

Most misconceptions simply lack context or are outdated. Today, thanks to compliance management tools, the process is much easier and smoother. These programs specialize in automating manual and time-consuming tasks so tasks are automated and done asynchronously, eliminating the need for lengthy meetings and business slowdowns to meet SOC 2 requirements.

For example, some GRC platforms connect with popular developer tools like GitHub to monitor their daily activities for compliance purposes without constantly interrupting their workflow. These tools have exponentially reduced the time it takes to perform complex audit activities, injecting value and efficiency into them instead.

Automating tasks has also taken the weight off of auditors’ shoulders, allowing them to spend more time on analytical tasks. Their highly technical approach to compliance has also helped them understand what the programs they’re examining are about. As a result, they’ve evolved into professionals who can aid businesses in adopting better data security practices and GRC tools to stay compliant beyond SOC 2.

SOC 2 Isn’t As Requirement-Intensive As You Think

In the midst of all the compliance requirements tech companies must complete, something about SOC 2 got lost in translation. As opposed to other more rigid audits, SOC 2 reports are shaped around company needs facing their industry and client base, not a checklist of standard conditions you must fit into. In short, it’s businesses who make the rules to demonstrate the security commitments they’ve made to their clients.

While this sounds counterintuitive to what compliance is — where everyone needs to adhere to very specific practices mandated by a regulatory agency — this freedom is actually what makes SOC 2 such a successful compliance report. It’s also what has made North American companies in industries like SaaS prefer it over security questionnaires.

This approach is advantageous because, as a security framework, SOC 2 recognizes all companies operate differently, cater to diverse clients, and offer a wide range of products or services. It would be impossible to expect everyone to follow the same requirements. For example, an edtech company might focus on access controls for student data, while a financial services company might prioritize data encryption for monetary transactions.

What’s true is that SOC 2 uses five Trust Service Criteria, of which only one is mandatory (security controls). When meeting with an auditor, you will discuss your product and assess which criteria you must meet and which ones you’d like to leave out. Remember, SOC 2 isn’t mandatory but rather a business decision that will benefit your company, so it’s up to you to understand your needs and wisely choose which criteria to comply with.

Don’t Upgrade Just To Please Auditors

As someone who has been in the auditing business for decades, I’ve seen it all. One of those things I witness way too often, and which companies should definitely refrain from, is acquiring security tools right before your examination just to please auditors. Whether you keep those tools after completing your report or not, you shouldn’t perceive them as a temporary bandaid to pass a test.

SOC 2 takes inventory of practices and processes you already do to provide your clients and potential ones an insight into your security posture. If you were to temporarily use programs like intrusion detection, static code analysis, and other vulnerability management tools just for the audit, you’d be letting down, and even misleading, clients with your SOC 2 report. Ultimately, you can end up harming your company with deceitful practices.

Instead, CTOs should be encouraged to sit down with auditors and be as transparent as possible — they’re there to highlight the good work you already do, not point out your weaknesses. If you receive an exception, this means auditors did their job well and provided you with a solution to improve your practices and comply with better data security.

If anything, allow audits to be the reason you implement good security practices, enabling your company to land better deals and achieve greater success in the future. Who wouldn’t want that?

While we understand the SOC 2 perception shift won’t happen overnight, it’s important to advocate for its renewed approach, easing more companies into it with more confidence and willingness to showcase their security practices. Auditing firms are quickly adapting to the pace of the startup and tech industry, making compliance a streamlined requirement that barely looks like its past self.