Your Guide to SaaS Compliance: Key Areas and Best Practices

Originally published by Vanta.

Many IT managers find compliance to be one of the most complex aspects of the SaaS space. For instance, in a LogicMonitor survey on cloud solutions, 60% of the respondents highlighted governance and compliance as one of their top challenges when engaging with SaaS platforms.

SaaS compliance requires adherence to various standards and regulations that can present a recurring workload for security teams in any industry. From pursuing security certifications to working with compliance auditors, the process typically entails extensive busywork.‍

In this guide, you’ll learn how to make a robust SaaS compliance framework for your organization and simplify workflows. We’ll cover:

• The meaning and benefits of SaaS compliance.
• Key compliance areas and corresponding regulations.
• Best practices for handling SaaS compliance.

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What is SaaS compliance?

SaaS compliance is an ongoing process of adhering to a spectrum of industry regulations and standards, including mandatory and recommended governance frameworks and best practices. Most compliance frameworks are for ensuring data privacy and security, maintaining cybersecurity governance, and implementing policies and procedures that demonstrate your organization’s ability to meet all the prescribed requirements.

‍SaaS compliance isn’t only about ensuring lawful operations—it guides different organizational processes, from data collection to financial reporting, to help you maintain stable operations, demonstrate customer trust, and secure better business partnerships.

‍With SaaS compliance, there is also reduced guesswork and confusion around the distribution of tasks and responsibilities between your organization and SaaS vendors. Typically, regulations that impact the organization also play a part in determining what controls various parties must implement to ensure compliance.

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Why does SaaS compliance matter?

SaaS compliance protects your organization from security risks, as well as from legal, financial, and reputational repercussions of not adhering to the applicable standards. A well-developed compliance process offers many additional benefits, such as:

• Increased trust and transparency: Demonstrating compliance with all the necessary standards showcases responsibility and makes stakeholders more likely to engage with your organization.
• Undisrupted business growth: Removing the risks of non-compliance through an elaborate system reduces business interruptions and frees up more resources for growth initiatives.
• Operational efficiency: Compliance standards and regulations define precise process requirements that make your security workflows clear and efficient.
• Enhanced funding opportunities: Investors are more likely to fund organizations that follow industry compliances to improve their risk profile and overall brand valuation.
• Reduced negotiation barriers: Being SaaS compliant helps you access new business opportunities, especially from clients who prefer partnering with organizations with an aligned outlook on industry compliances.

‍3 SaaS compliance areas you should know about

SaaS companies have a diverse regulatory landscape typically made up of three key areas:

1. Data privacy compliance
2. Security compliance
3. Financial compliance

‍We’ll discuss each in detail below and touch on the key frameworks and regulations you should familiarize yourself with.

1. Data privacy compliance

Virtually all SaaS solutions collect some data from their customers. If that data includes personal or other sensitive data like health information or credit card details, you need to ensure its complete privacy and security.

‍The good news is that there are several regularly updated standards and regulations that clearly outline your data privacy obligations. The most notable ones are discussed in the following table:

‍2. Security compliance

You need a systematic approach to security due to the ever-expanding pool of cybersecurity threats and the inherent vulnerabilities of SaaS solutions. The goal is to safeguard everything from your code to the devices used by your teams. You can aim for the highest standards of security by complying with the following standards:

3. Financial compliance

Financial transactions in a SaaS environment are highly sensitive and involve critical data exchange. It’s best practice to take steps to prioritize data protection, as well as define a robust financial reporting process to ensure transparency and trust. The regulations in the table below can help you achieve these goals:

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4 SaaS compliance best practices

Here are four best practices to help you meet various compliance obligations while ensuring the optimized use of time and other resources:

1. Map out your compliance obligations.
2. Assess your risk landscape and compliance readiness.
3. Implement sufficient security controls and monitoring processes.
4. Automate compliance with comprehensive software.

‍1. Map out your compliance obligations

Not every SaaS business needs to comply with the same regulations and standards, so the first step you can take is to outline frameworks and standards applicable to your organization. You can consider the following factors while mapping out SaaS compliance:

• Location and countries of operation: Check the laws and regulations of the country your company is operating from, as well as those of any jurisdiction you do business in. An example is GDPR, which you need to comply with even if your organization is formed outside the EU.
• Industry: Certain sectors (like health and finance) are heavily regulated and affected by more standards than other industries. It’s worth checking with your compliance team to understand your industry’s key compliance requirements.
• Data practices: The volume and types of data you gather can influence your compliance obligations. Identify if there are any standards that become applicable to you due to changes in SaaS services.

2. Assess your risk landscape and compliance readiness

Most organizations operate in a complex risk landscape, so you should understand yours before developing a compliance strategy. You need to consider various risk types, such as:

• Internal risks
• Cybersecurity risks
• Third-party risks

You can use various methodologies to assess these risks and identify notable threats. Ideally, you should focus on standards that help you minimize your risk profile.

‍When you identify the applicable regulations and standards, you should take two steps:

1. Perform a gap analysis to review what’s lacking in your current compliance posture.
2. Conduct a compliance readiness assessment to ensure you’re prepared for the necessary audits.

3. Implement sufficient security controls and monitoring processes

SaaS companies must implement robust security measures to mitigate cybersecurity threats. Virtually all security standards and regulations ask you to prioritize building comprehensive security controls to safeguard your data and systems. In general, you’ll have to enhance your security with:

• Technical controls
• Administrative controls
• Access controls

‍Once implemented, consider monitoring your controls continuously to gain real-time insights into your security posture. Such monitoring will most likely involve the use of dedicated software with automation and integration capabilities to enable a centralized overview of your controls.

4. Automate compliance with comprehensive software

Speaking of software, one of the best practices for SaaS compliance is to adopt platforms that streamline and automate your compliance workflows. Without an automation solution, your teams will be overwhelmed with the numerous inefficient manual tasks involved in different processes, such as:

• Security reviews
• Evidence collection
• Internal compliance audits

‍Manual workflows not only block resources but also increase the risk of non-compliance, especially when overworked teams lack the capacity to conduct the necessary due diligence for compliance with the applicable standards.