Why Compliance Reports Are So Crucial to Your Business
By: Kaylie Gyarmathy on July 29, 2020
Imagine this nightmare scenario: Your business has taken exhaustive steps to shore up its information security controls to keep customer data well-protected, but one day you wake up to the news that one of your vendors has suffered a data breach and the information you’ve shared with them might be affected.
That’s precisely what happened to about 59 percent of companies surveyed by the Ponemon Institute in 2018. The infamous Target data breach of 2013, which cost the company hundreds of millions of dollars, occurred because of unsecured access credentials held by an HVAC vendor. These unfortunate situations demonstrate the value of compliance reports in today’s data-heavy, interconnected world.
What are Compliance Reports?
A compliance report, more accurately referred to as an attestation report, contains an independent auditing firm’s assessment of the controls, policies, and procedures an organization has put in place to manage risk and protect sensitive information or data. Typically completed on an annual basis, compliance reports provide customers, vendors, and other business partners with the reassurance that a company is meeting the guidelines laid out in specific regulatory standards to minimize risk.
It’s important to recognize that a compliance report is not exactly the same as a certification and having one doesn’t automatically mean that a company meets every aspect of a particular compliance standard. Two organizations might have a SOC 2 report, for example, but someone would have to actually review those reports to determine whether the scope of those reports is similar. One report may only cover two or three SOC Trust Services Criteria while the other report addresses all five criteria.
A compliance report, then, should not be considered a blanket guarantee that an organization meets every single aspect of a specific compliance framework. Rather, it should be seen as a foundational starting point, a resource that provides insight into the steps that organization has taken to protect itself, its customers, and its partners from risk.
3 Reasons Why Compliance Reports are Crucial for Your Business
There are several reasons why compliance reports are necessary for any successful business.
1. Industry Requirements
In many industries, compliance isn’t just a “nice to have” feature, but are essential to doing business at all. Take, for instance, PCI DSS compliance in the retail industry. If a company cannot guarantee that it has the security controls in place to protect the financial information of their customers when it comes to credit card processing, they will have a very hard time earning the trust of customers. Similarly, organizations involved in the healthcare industry will need to demonstrate their commitment to meeting HIPAA guidelines if they want to be taken seriously by customers and other vendors.
2. Risk Mitigation
No company wants to see their name in the headlines when news of a serious data breach becomes public. While organizations might devote a great deal of time and energy to their security controls, the evaluation of an independent auditor can help them identify where their policies need to be strengthened and what gaps remain to be filled. Compliance audits provide a snapshot of where a company stands in terms of its security posture and how far it may need to go to minimize potential risks. Even if an auditor determines that existing controls are sufficient to the task, the report may flag areas to improve or provide a foundation for expanding the scope of security controls.
3. Vendor Quality Control
Many companies outsource key business functions to third-party vendors to streamline their own operations or focus their limited resources elsewhere. While it’s easy to think of vendors as being a separate business, the law often does not make much distinction between them and their employers in practice. This is especially true when it comes to data. When a customer entrusts a company with their data, they do so with the understanding that the company has an obligation to keep that data secure. If the company then hands that data over to a third-party vendor (a payment processor, for example), they have an obligation to make sure the vendor’s security controls are up to the same standard. If the vendor suffers a data breach that exposes customer information, the customer can hold the original company liable.
Compliance reports, then, are critical when it comes to selecting vendors or offering vendor services to other companies. A compliance report can show what steps a vendor is taking to manage risk and help a company decide if their controls and policies meet their own requirements.
The Importance of Data Center Compliance
One of the most important vendor decisions a company can make is selecting a colocation data center partner. Since any equipment, data, and applications migrated into a data center environment will be relying upon the colocation provider’s infrastructure, it’s critical to assess whether or not the facility has the controls in place to mitigate risk and keep sensitive information and networks secure. While it’s important to remember that hosting a poorly secured network in a data center infrastructure with an outstanding compliance record will not be sufficient to protect an organization from risk, hosting a network in an environment that has failed to meet baseline compliance standards is asking for serious trouble.
If a data center doesn’t make its compliance reports readily available, that should be seen as a warning sign that the colocation provider isn’t fully committed to transparency and security. While compliance reports often contain confidential information and are not readily available to just anyone, data center tenants should be able to access them easily for their own reference and to prove to their own partners that their data solution is fully compliant with specific regulatory frameworks.
That’s why vXchnge’s revolutionary in\site platform allows colocation customers to access and print compliance reports at the touch of a button. Where many data centers force their customers to go through a lengthy process to request a compliance report, in\site allows them to instantly retrieve the most up-to-date attestations to help them demonstrate that their data solution is fully compliant with relevant security frameworks. This helps them to better capitalize on opportunities to help their business keep growing.
To learn more about how vXchnge data centers are revolutionizing the way colocation customers think about data center compliance, talk to one of our colo specialists today or sign up for a free demo of the revolutionary in\site intelligent monitoring platform.
About Kaylie Gyarmathy
As the Marketing Manager for vXchnge, Kaylie handles the coordination and logistics of tradeshows and events. She is responsible for social media marketing and brand promotion through various outlets. She enjoys developing new ways and events to capture the attention of the vXchnge audience.