Navigating Compliance: GDPR & SOC 2 Compared

What is SOC 2? What are the similarities and differences between it and the GDPR? And does your organisation need to ensure it is compliant with both?

The General Data Protection Regulation (GDPR) isn’t the only data protection standard in town. You’ll probably be aware that there are others — some mandatory and others voluntary. So where does SOC 2 figure?

What is SOC 2?

Service Organization Control 2 (SOC 2) is a framework developed by the American Institute of CPAs (AICPA) for service organisations. It sets out how companies should manage their customer data.

Does SOC 2 only apply in the US?

No. It is true that SOC 2 is widely recognised in the US (it is a US framework, after all) and that ISO 27001 may be the more commonly adopted standard in Europe. Yet UK and European companies often seek SOC 2 compliance as a statement of their approach to information security. If they also trade with the US, SOC 2 compliance can also benefit in terms of immediate recognition.

Similarities between GDPR and SOC 2

Focus on Data Protection and Privacy

Both GDPR and SOC 2 emphasise the importance of safeguarding sensitive data. GDPR is a comprehensive regulation aimed at protecting personal data and ensuring individuals’ privacy rights. SOC 2 evaluates the controls in place for the security, availability, processing integrity, confidentiality, and privacy of customer data in service organisations.

Transparency and Accountability

GDPR enforces the principle of accountability, requiring organisations to demonstrate compliance with its provisions. SOC 2 also emphasises transparency and accountability by requiring service organisations to provide evidence of their controls through independent audits.

What Are The Differences between GDPR and SOC 2?

Scope and Applicability

GDPR applies to any organisation that processes the personal data of EU residents, regardless of the processing organisation’s location. It is primarily focused on protecting the rights of individuals.

SOC 2, on the other hand, is designed to inspire trust in the way a service organisation stores, processes or transmits customer information in the process of conducting its services. Whilst it would, for example, apply to an accountancy firm, payroll provider, recruitment company or law firm, SOC 2 (and the protections it offers) would not apply to a company selling physical products.

Risk Management and Assessment

The frameworks take a slightly different approach to assessing risk. SOC 2 takes a squarely risk-based approach, requiring service organisations to identify and manage risks to their information systems.

GDPR requires organisations to assess risk from the perspective of data subjects’ rights and freedoms and then take appropriate measures to mitigate those risks.

Regulation vs Framework

A crucial difference between SOC2 and GDPR is their enforceability. GDPR is a legal regulation enforced by governmental bodies, with legal obligations and potential fines for non-compliance. There’s nothing voluntary about it. Whatever your business and wherever you operate, if you process the data of EU residents, you are bound by it.

SOC 2, on the other hand, is a standard or framework to which companies can voluntarily commit. Although widely recognised and adopted, compliance with SOC 2 is not a legal requirement.

Which compliance?

Navigating the compliance landscape requires a nuanced understanding of the similarities and differences between GDPR, SOC 2 and other regulations and standards. Compliance with any standard can be arduous, and no company should assume that complying with one standard will deliver compliance with all (because it most certainly won’t).

With the right support, however, businesses can understand which is the right standard to meet and tailor their actions accordingly.

SOC 2 and GDPR, for example, both emphasise data protection, but differ in scope and applicability. Our recommendation for any organisation that processes the personal data of EU residents is that they should prioritise GDPR compliance. Service organisations may then choose to adopt SOC 2 to further demonstrate their commitment to security and privacy best practices.

GDPRLocal can help ensure you comply with the data protection legislation and standards of all the territories in which you trade. Get expert help in managing your data protection here, appoint your Article 27 GDPR rep, or call +44 1772 217800.