How do you know if a company’s security is as good as they say? More to the point, how can be sure that your data is in good hands? As more and more cyberattacks target the supply chain and IT vendors, this question is increasingly critical. The SOC-2 report provides a reliable way to verify that a service provider is as trustworthy as it claims to be.
Trust Needs to Be Earned
Cyberattacks and data breaches have become everyday occurrences in the U.S. According to SonicWall, ransomware attacks increased 105% in 2021, and IoT malware, cryptojacking and encrypted threats also increased.
When you work with third-party vendors, you may establish contractual obligations that include insurance coverage and strong security practices. Unfortunately, vendors don’t always follow up on their promises, even when they’re contractually obligated.
According to Evident, 75% of third parties are not meeting the insurance requirements of the companies they work with. It kind of makes you wonder what other requirements their shirking. And even when companies think they’re adhering to best practices and security measures, they might not be performing as well as they believe.
Trust needs to be earned, and security needs to be proven. SOC reports let you do that.
SOC 1, SOC 2 and SOC 3
The AICPA has developed the SOC for Service Organizations reports to help service organizations build trust and confidence in their services. An independent CPA performs the report, so you can trust that the assessment is accurate and impartial.
There are multiple SOC reports.
- SOC 1 is a report on the controls related to financial reporting.
- SOC 2 is important for organizations that need detailed information and assurance about the controls used when handling data.
- SOC 3 is similar to the SOC 2, but these reports are more general, and they are used when an SOC 2 report isn’t needed or possible.
Why Does the SOC 2 Matter?
Either the SOC 2 or the SOC 3 can be used when customers or stakeholders want to be sure they can trust a service organization’s systems. However, when customers need detailed information regarding the processing and controls, and when they want to know about the test performed and the results of those tests, the SOC 2 is needed.
The SOC 2 report can help you understand exactly which controls are in place, which may help you decide whether you’re interested in working with a particular vendor. The report can also help you understand what type of oversight and risk management programs might be needed.
Promises Versus Facts
Lots of vendors make big promises. You need facts. What can the service organization really provide? Will you run into problems down the line?
The SOC 2 report reviews controls related to five key areas:
- Security
- Availability
- Processing integrity
- Confidentiality
- Privacy
With this information, organizations can trust that their data truly is in good hands.
SOC 2 certification isn’t a legal requirement. Nevertheless, it is important. Some organizations might require it from their service providers. Organizations may also complete it voluntarily to demonstrate their commitment to excellence. This is especially important for vendors that manage significant amounts of data, such as SaaS and cloud service providers.
Insuresoft’s Commitment to Excellence
Here at Insuresoft, we’re committed to maintaining high standards. As a provider of mission-critical core systems for the P&C insurance industry, we understand how important it is to maintain high standards of control in this highly regulated, data-heavy sector.
In 2020, we successfully completed our SOC 1 Type 1 examination. In 2021, we completed our SOC 2 Type 1 examination. Do you want to learn more about our services and our commitment to excellence? Contact us.
