Building trust with prospects and customers is easier said than done. With supply chain attacks becoming a major concern, companies demand proof that their MSPs/MSSPs have implemented the proper security controls to keep their data and infrastructure safe.

You’ve probably heard of SOC 2, one of the most essential data security standards. It helps organizations demonstrate that they’ve taken the necessary security precautions to protect sensitive data from unauthorized access and manage it responsibly throughout its lifecycle.

Is this SOC 2 relevant to MSPs? Should you invest in becoming SOC 2 compliant? Let’s explore what SOC 2 compliance involves, why it matters to MSPs/MSSPs, and how to meet SOC 2 compliance requirements.

What is SOC 2 Compliance?

SOC 2 stands for System and Organization Controls 2, a security framework developed by the American Institute of Certified Public Accountants (AICPA) to help service providers protect customer data. It has five Trust Services Criteria (TSC): security, privacy, confidentiality, processing integrity, and availability. A third party audits an organization and publishes a SOC 2 report detailing how its policies and controls meet the selected TSC.

There are two types of SOC 2 reports. SOC 2 Type 1 reports are like snapshots, verifying an organization’s security controls meet specific standards at the time of the audit. Meanwhile, SOC 2 Type 2 reports assess how the controls function over three to twelve months to validate that they work as intended.

The Benefits of Achieving SOC 2 Compliance for MSPs

Achieving SOC 2 compliance requires substantial time, effort, and resources. Is it worth the investment? Here’s why SOC 2 compliance matters for MSPs and MSSPs:

Improve Data Security

Besides validating your adherence to specific security practices, a SOC 2 audit highlights areas for improvement. The report provides valuable insights to help you resolve issues, prioritize resources, and augment your cybersecurity posture in today’s fast-evolving threat landscape.

Enhance Your Reputation

SOC 2 audits are voluntary and conducted by a neutral third party to verify that you meet data security and privacy standards established by AICPA, a well-respected and trusted organization. A SOC 2 report helps reinforce your credibility and reputation, building trust with prospects and clients — especially those in highly regulated industries like healthcare, finance, and government.

Meet Regulatory and Contractual Requirements

You must meet specific regulatory or contractual obligations if you have clients in regulated industries. While SOC 2 is not industry-specific, it aligns with most legal and industry requirements. A SOC 2 report helps assure prospects and clients that your operation has the proper measures to keep their data safe.

Improve Your Bottom Line

The proactive effort of obtaining SOC 2 reports encourages MSPs to improve performance and streamline their practices to enhance security. It helps minimize breaches and incidents that could cause business and financial losses. It may also help open doors to higher-value contracts and customers.

Support Risk Mitigation

Achieving SOC 2 compliance requires MSPs to evaluate and strengthen their internal processes and controls while identifying gaps in their procedures. The enhanced documentation also helps improve operational efficiency and mitigate risks associated with service delivery.

Strengthen Partner Relationships

More companies scrutinize their partners to safeguard their data and infrastructure to protect themselves from growing supply chain risks. A SOC 2 report demonstrates your commitment to maintaining rigorous security and privacy standards, helping you expand your business relationships and ecosystem.

Support Marketing Efforts

Promoting SOC 2 compliance in your marketing materials helps display your dedication to cybersecurity and keeping your clients safe. While you can’t share the report’s details with prospects (you’ll need a SOC 3 report for public distribution), you can leverage your SOC 2-compliant status to augment your brand image and gain a competitive advantage.

Boost Client Retention

SOC 2 compliance demonstrates to your clients that you’re proactively managing risks to protect their data — building long-term trust to increase customer satisfaction and loyalty. Of course, the increased client retention rate also helps you drive profitability.

Meeting SOC 2 Compliance Requirements

Here is a SOC 2 compliance checklist outlining the essential steps to help you orchestrate a SOC 2 audit:

1. Determine your scope: Identify the TSC your audit will cover and the in-scope systems required for executing the scoped controls. Then, decide on the type of report you need. A SOC 2 Type 1 report audits the design of these controls, while a Type 2 report requires in-depth testing of control executions.

2. Perform a self-assessment: Conduct an internal readiness assessment against the SOC 2 criteria. Identify and remediate gaps and align your operations with SOC 2 best practices to minimize adverse findings when you bring in a third-party auditor.

3. Close control gaps: Develop and publish missing policies and procedures. Modify processes to improve risk mitigation. Conduct training sessions to ensure your staff understands the updated controls and their roles in maintaining compliance. Also, you should implement a process for continuous monitoring.

4. Perform a third-party audit: While any CPA firm may perform a SOC 2 audit, hiring auditors specializing in information systems could help you get the most out of the process. You’ll answer a security questionnaire, provide evidence of controls, walk the auditors through your procedures, and provide documentation.

Streamline SOC 2 Compliance with SOCaaS

MSPs must meet complex requirements and invest resources in implementing security controls like data encryption, access controls, and regular risk assessments. Hiring an in-house team to prepare for audits and orchestrate extensive documentation of processes, policies, and controls is costly.

Moreover, continuous monitoring is essential for ongoing compliance. For example, you need robust reporting to track vulnerabilities, address security incidents, and maintain an audit trail. The time- and resource-intensive process can be a significant burden if your staff is already stretched thin.

So, how do MSPs like Strategic Technology Solutions achieve security standards like SOC 2 and SSAE 19 without breaking the bank?

A SOC-as-a-Service (SOCaaS) provider like inSOC helps you set the foundation with comprehensive and automated monitoring to track key security metrics, detect anomalies, and generate comprehensive reports.

Moreover, our subscription-based model and scalable solution enable you to adapt to SOC 2 compliance requirements as the threat landscape evolves and your business grows.

Get in touch to see how we can be your ally in your SOC 2 compliance journey.