Vendors and customers are understandably concerned about IT security in our current environment of data leaks and cyber-attacks. One of the ways cybersecurity concern manifests for service organizations is through information security questionnaires.
On the sender’s end, these questionnaires have the logical goal of helping companies understand their data risk environment, but for service organizations on the receiving end, questionnaires are a headache. Each questionnaire is unique and can contain hundreds of questions, so when you multiply that ask by several vendors or customers, your service organization can easily be overwhelmed trying to complete the questionnaires. There’s also an effectiveness issue because while having the questions answered might make the customer “feel good” about your IT security, the truth is that filling it out is essentially a self-assessment. There are better ways to prove your security bona fides, which we will explore in more detail in this resource.
When Security Questionnaires are a Problem
Security questionnaires are so prevalent in today’s market because for the vendor or customer sending out the questionnaire, they are easy to create and use to prove vendor compliance. The questionnaires are relatively straightforward to put together, don’t cost a lot of money, and are generally accepted by regulators looking for fulfillment of third-party risk management efforts.
For your service organization, however, the process is anything but simple. Whether contained to a spreadsheet or plugged into an online portal, these questionnaires are painstaking to fill out and usually very repetitive. Software applications and devices are only becoming more interconnected. This integration leads to more opportunities for possible data exposure; thus, security questionnaires must cover increasingly complex scenarios and stringent processes.
The nature and hierarchy of questions can also be subjective. The good news is that, while extremely popular, security questionnaires are not the only option for third-party risk management.
Benefits of SOC 2 Reporting
Independent assessments of your service organization’s information security controls could be the way forward. Systems and Organization Controls (SOC) 2 assurance alleviates the need to complete tedious security questionnaires by addressing the similar information security topics while providing an independent assessment of a company’s control environment. Internal security controls are what protect a company from external threats, so mapping out and detailing the extent of your controls makes risk management accessible and easy to report to potential customers.
SOC 2 reporting goes even further by having an experienced third party evaluate how your specific IT controls concerning processes and people measure up to the American Institute of Certified Public Accountants (AICPA)’s trust categories of security, availability, processing, integrity, confidentiality, and privacy. Investing in an SOC 2 audit report can result in unique best practices for protecting your data while maintaining a clear regulatory report for customers. SOC 2 reports also help your service organization improve upon its processes by providing you the sound guidance you need to improve controls and mitigate the risk of cyber-attacks or data breaches.
Feedback on steps to take for control remediation on security questionnaires is rarely so straightforward, given the highly subjective nature of the particular customer or vendor’s request list.
Determining Your Best Fit Response to Information Security Questions
Financial leaders and management teams may want to understand more about their organization’s current process for responding to security questionnaires before determining if a SOC 2 report would better address the types of requests the organization fields from its stakeholders. Meet with IT and other internal teams to understand the time commitment your organization currently dedicates to answering security questionnaires. Some companies have invested resources into handling these questionnaires, developing intake processes, internal security questionnaire answer libraries, and more, which may streamline your organization’s ability to respond to requests. A simple return on investment (ROI) calculation may quickly help companies make informed decisions on whether the costs of a SOC 2 outweigh the continued hardships of self-evaluation.
Another factor to consider would be to understand what organizations like yours are doing with their information security approach. Are your competitors providing their customers, clients, and vendors with comprehensive SOC 2 reports? If your organization is one of the few that don’t, does that put you at a disadvantage when trying to attract new clients? Even if peer organizations are not issuing SOC 2 reports, would this be an opportunity to be a leader in the field? Adopting top-tier IT security practices and assurance may help your customers and vendors feel comfortable that their data is protected and could be a differentiator that puts your organization over the top in a selection process.
Where Can I Learn More?
For more information on how SOC 2 reporting can protect your data while helping you avoid the hassle of security questionnaires, contact us.
Published on October 19, 2021