In recent years data breaches have become more frequent while the value of customer data is higher than ever. Ensuring the security and privacy of customer information is paramount. This is especially true for B2C and B2B companies that run customer loyalty programs, where vast amounts of sensitive customer data are collected, stored, and analyzed.
This is why Brandmovers was happy to share that we recently completed the process to become SOC 2 compliant, as part of our commitment to not only meet but exceed industry standards and customer expectations in security and data protection. Achieving SOC 2 compliance lets us offer our clients innovative customer engagement solutions while ensuring their data and their customers' data is safe and secure.
For customer loyalty programs, which often handle sensitive customer information such as personal details and purchasing behavior, SOC 2 compliance signifies a commitment to data security and privacy. Choosing a SOC 2 compliant loyalty program provider is not just a matter of data security; it's a crucial component of your company's trustworthiness and brand reputation.
SOC 2 (Service Organization Control 2) Type II certification is an industry-standard framework developed by the American Institute of Certified Public Accountants (AICPA). SOC 2 reports assess a company's system based on the Trust Service Criteria (TSC) established by the AICPA, which are security, privacy, processing integrity, availability, and confidentiality. Essentially, these 5 SOC 2 Criteria help ensure that service providers can securely store, process, and transmit customer data.
What does this look like in action? From a high-level perspective, each trust principle has its own focus and requirements companies must meet:
Protecting data and systems from events like unauthorized access, unauthorized information disclosure, and anything that could result in system damage or compromise. This principle might require that an organization strengthen its firewalls, use identity management systems, adhere to multi-factor authentication, implement intrusion detection and recovery, and more.
An organization’s data usage and privacy policy must meet conditions defined by the AICPA, and they must have rigorous controls in place regarding the collection, storage, and processing of any personally identifiable information (PII) to prevent unauthorized access.
Processing integrity is meant to ensure that an organization’s software and systems are operating as they should, without issues such as vulnerabilities, bugs, or errors. This typically requires an organization to have documented quality assurance (QA) procedures and performance monitoring systems in place.
SOC 2 requires that an organization be able to meet its service level agreements (SLAs) around the clock. This means a provider’s systems should be operational and that the provider has documented recovery plans and monitoring systems in place to ensure availability.
This principle ensures that information deemed confidential, such as usernames/passwords, application source code, or payment info, is fully encrypted and protected so that only the designated individuals who are allowed to utilize that information can access it when needed.
By following these standards, companies can show their dedication to protecting client data.
What makes SOC 2 stand out from other types of compliance frameworks is that SOC 2 requirements will be different for every company looking to become certified. Each company is responsible for developing its own security protocols and control measures that satisfy the 5 Trust Service Criteria. The company then needs to be verified by an independent auditor and a report written on how well the company’s systems and processes adhere to SOC 2 requirements.
The audit process for SOC 2 compliance is a rigorous examination conducted by an accredited CPA to evaluate a company’s systems, controls, and operating procedures. It typically includes submitting documentation and evidence to the auditor, testing & walkthroughs of various controls, and employee interviews.
While SOC 2 isn’t a legally required certification, more companies, stakeholders, and procurement teams are beginning to prioritize working with compliant providers to ensure the right controls and safeguards are in place to protect their data. SOC 2 may be a voluntary compliance, but it’s steadily becoming the standard in the U.S. for service organizations looking to grow their business.
SOC 2 compliance is essential for any service organization that stores, processes, or transmits any kind of customer data. And loyalty programs are a goldmine of personal customer data — from names and email addresses to purchasing histories and preferences. Digital promotions like sweepstakes or contests also deal with and capture confidential customer information.
This data, while invaluable for crafting personalized marketing strategies, also poses a significant risk if not properly secured. SOC 2 compliance ensures that loyalty program providers adhere to high standards of data protection, reducing the risk of data breaches and enhancing customer trust.
Here are some additional benefits of having a SOC 2 compliant loyalty program provider:
As data breaches become more common, more companies are setting higher standards and more stringent requirements for their technology partners and providers. A provider who is SOC 2 compliant can easily satisfy a large percentage of requirements established by your internal IT security teams.
Trust is a crucial component of building customer loyalty. Data breaches or hacks easily damage consumer trust, and recovery from these kinds of incidents can be both slow, expensive, and difficult. Working with a SOC 2 compliant provider ensures your program has the highest security standards and reduces the potential of a data hack or breach.
SOC 2 is more than just having the right firewalls in place. SOC 2 compliance requires organizations to have the right documented controls, infrastructure, recovery plans, and response procedures in place before anything happens. You can be confident that your loyalty provider is prepared to identify and mitigate risks and handle any type of situation before it occurs.
Achieving SOC 2 compliance is not a one-and-done type of deal. To maintain compliance, companies must stay current with industry regulations and standards, which includes staying on top of technology trends and the latest advancements in software & hardware development. We’ve discussed before how loyalty programs should be regularly optimized and evolved - having a SOC 2 compliant provider means that your program’s security will be continuously maintained to the latest security standards.
The landscape of data security and privacy is continuously evolving, with new regulations and consumer expectations shaping how companies collect, use, and protect customer data. The role of SOC 2 compliance in loyalty programs is set to become more critical, as businesses seek to adapt to these changes and ensure the long-term loyalty of their customers. By prioritizing compliance, companies can not only protect their customers but also enhance their brand reputation and position themselves for success in the competitive market landscape.
The decision to prioritize SOC 2 compliance in your loyalty platform software is more than a regulatory checkbox; it's a strategic move that underscores your commitment to your customers' security and your company's future.
If you want to learn more about how Brandmovers can build your ideal customer loyalty program or digital promotion as a SOC 2 compliant vendor, reach out to us today!