What is SaaS Compliance?

SaaS compliance involves cloud-based solutions that operate according to industry laws and standards regarding customer data.

Fully compliant software is essential to establishing customer trust and securing databases against breaches. Compliance may also be a requirement for conducting business in certain B2B contexts.

There is no single, uniform regulatory body for all SaaS businesses. Regulations normally differ based on customer demographics and associated data privacy laws, as well as the industry your software covers.

SaaS regulations also depend on any contractual agreements the organization enters with clients.

The most widespread compliance laws for SaaS providers include:

1. SOC 2: An auditing standard used to enforce strong data security practices.
2. ISO 27001: An international standard for managing information security
3. PCI DSS: A compliance mechanism for SaaS operating in financial controls and credit card payments.
4. HIPAA: Data protection laws for healthcare information in the United States.

SOC 2 is not mandatory for all SaaS companies, although it offers guidelines for safer processes.

A SOC2 certification demonstrates that all security measures necessary for handling user data have been implemented.

This standard is also essential when working with clients and their sensitive information.

Both clients and SaaS providers should contribute significantly to ensuring data security during interactions. The SaaS company should provide a secure infrastructure and data handling methods for customers.

The level of data sensitivity determines the type of compliance your SaaS needs. Other considerations to make include the type of industries you serve, as well as your business goals. To create a detailed compliance strategy, you may need to consult a legal professional.

Use these questions to judge whether your business requires SaaS compliance.

Internal Audit: 

• Does your business handle confidential customer data?
• Do you operate in a regulated industry?

External factors:

• Cost of compliance against risks of non-compliance
• Legal requirements for ensuring compliance
• Security expectations from clients