Building Trust in E-commerce: Why SOC2 Compliance Matters

Jun 8, 2023 | e-commerce | 0 comments

building trust

As the world of e-commerce continues to expand, businesses are faced with the daunting task of ensuring security and trust. One of the tools that stand out in bolstering this trust is Service Organization Control (SOC) compliance, a standard that plays an instrumental role in safeguarding customer data and ensuring overall operational effectiveness. At the intersection of this trust-building paradigm and e-commerce lies the pivotal SOC2 compliance.

This article explains what SOC2 compliance is and why it matters for e-commerce businesses. 

What is SOC Compliance?

SOC compliance represents a suite of standards established by the American Institute of Certified Public Accountants (AICPA) aimed at facilitating trust and confidence in service organizations’ operations and data privacy. Simply put, it serves as a seal of trust, ensuring that service organizations have put in place adequate controls and systems to protect client data.

Types of SOC Compliance

There are different types of SOC reports designed to address various areas of organizational control and data management.

SOC 1: Internal Control Over Financial Reporting

SOC 1 addresses internal controls over financial reporting. It is designed to assure stakeholders about the accuracy and reliability of a company’s financial statements and reporting. This type of report is often used by auditors and financial institutions.

SOC 2: Trust Service Principles

In terms of a system’s safety, accessibility, processing accuracy, confidentiality, and privacy, SOC 2 focuses on a company’s non-financial reporting controls. This report type is especially pertinent in the e-commerce context, which often revolves around data-intensive operations, aligning directly with e-commerce consumers’ concerns about data privacy and protection.

SOC 3: Cybersecurity

SOC 3 reports offer a high-level overview of a service organization’s information systems’ effectiveness, with a particular focus on cybersecurity controls. While these reports are less detailed than SOC 2, they are publicly available and can be shared freely to demonstrate a company’s commitment to cybersecurity.

SOC for Supply Chain

This is a new addition to the SOC suite, created to address cybersecurity risks in supply chains. With increasing digital and physical threats to supply chains, this report reassures customers about the security measures in place throughout the supply chain process.

Why Does SOC2 Compliance Matter in E-commerce?

As the digital marketplace expands, the importance of building and maintaining customer trust cannot be overstated. Let’s break down the reasons why SOC2 compliance is critical for e-commerce.

Creating a Safe Data Environment

Today, data is undoubtedly the lifeblood of operations. Yet, with the rising incidence of data breaches and cyber threats, customers often hesitate to share personal and financial information. SOC2 compliance can address this challenge head-on.

This compliance is essentially a technical audit that scrutinizes your e-commerce business’s management of customer data. It aligns with the five trust principles: 

  • Security
  • Availability
  • Processing integrity
  • Confidentiality
  • Privacy

By achieving SOC2 compliance, your business demonstrates a commitment to data security, alleviating customer concerns and building trust.

Building Trust and Encouraging Transactions

As the internet becomes more saturated with e-commerce options, customer trust is a defining factor in determining where consumers choose to shop. SOC2 compliance serves as a linchpin in this trust-building process, assuring customers that their data is secure.

In turn, this trust facilitates more transactions. Customers are more likely to complete purchases and return to your site if they are confident that their data is safe. Thus, SOC2 compliance is not merely a regulatory requirement but also a strategic business investment.

Guiding Secure Website Design

SOC2 compliance provides a comprehensive framework for secure website design, outlining stringent guidelines for data management, storage, and security.

By adhering to these standards, businesses can assure their customers that they take data privacy concerns seriously, further enhancing their credibility. When customers see that an e-commerce site is SOC2 compliant, they can shop with peace of mind, knowing their data is well-protected.

Steps to Ensure SOC2 Compliance

Given the importance of SOC2 compliance in e-commerce, it’s crucial to understand the steps to achieve it. Here is a simplified SOC 2 compliance checklist for your reference:

  • Understanding the SOC2 Criteria: Familiarize yourself with the five trust principles and understand which ones apply to your business.
  • Conducting a Gap Analysis: Identify any shortfalls in your current controls and systems compared to the SOC2 requirements.
  • Remediation: Implement necessary controls to address any gaps identified in the previous step.
  • SOC2 Type I Audit: This is an initial audit that reviews your systems and controls at a particular point in time.
  • SOC2 Type II Audit: This is a more in-depth audit that reviews the operational effectiveness of your controls over a period of time, typically 6 to 12 months.
  • Continuous Monitoring and Regular Audits: Regular audits ensure that your controls remain effective and adapt to any changes in the business or regulatory environment.

Final Thoughts

SOC2 compliance offers a clear path toward gaining consumer trust by ensuring high standards of data security and operational integrity. By understanding and implementing the steps highlighted above, e-commerce businesses can not only strengthen their security posture but also enhance their reputation, customer trust, and ultimately, their bottom line.

Article contribution by: Katie Pierce

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