Cloud Compliance Guide

What is Cloud Compliance?

Cloud compliance refers to the adherence to regulatory and industry standards by organizations that utilize cloud computing services. Cloud computing allows organizations to store, manage and process their data and applications in remote servers, rather than in their own physical locations.

However, since cloud providers are responsible for managing and securing the infrastructure, data, and applications, organizations need to ensure that the cloud provider they choose is compliant with industry and regulatory standards to ensure the confidentiality, integrity, and availability of their data.

Some examples of cloud compliance standards include the General Data Protection Regulation (GDPR), Health Insurance Portability and Accountability Act (HIPAA), Payment Card Industry Data Security Standard (PCI DSS), and International Organization for Standardization (ISO) 27001.

Organizations must understand the compliance requirements for their industry and the regulations that apply to their data and applications, and ensure that their cloud provider meets those requirements. They should also regularly monitor and audit their cloud provider to ensure that they remain compliant with the relevant standards and regulations.

Why Cloud Compliance is Important

Compliance is crucial for organizations that store and process sensitive data in the cloud, such as financial information, healthcare records, and personally identifiable information (PII). Compliance with regulations and standards such as HIPAA, GDPR, and SOC 2 demonstrates an organization’s commitment to protecting data and can help to prevent costly fines, legal liabilities, and reputational damage in case of a data breach or non-compliance.

Cloud compliance also provides a framework for consistent security and risk management practices across different cloud providers, enhancing transparency, and improving the overall security posture of an organization. Therefore, organizations that prioritize cloud compliance can build trust with customers, partners, and stakeholders, and gain a competitive advantage in the market.

Adhering to compliance standards demonstrates your company’s commitment to safeguarding customers’ data security and making deliberate efforts to achieve it. This can be likened to a seal of approval that is widely recognized and trusted. By obtaining this seal, your company can establish a reputation for trustworthiness among customers and other stakeholders. The potential financial repercussions of non-compliance can be significant, with penalties that can amount to staggering sums. For instance, in the case of GDPR, severe violations may result in fines of up to 20 million EUR, while HIPAA violations can lead to criminal penalties that may include imprisonment of up to 10 years, in addition to fines.

Common Cloud Regulations and Standards

There are several cloud regulations and standards that organizations must comply with to ensure data security and privacy. Compliance with these regulations and standards is crucial for organizations that use cloud services to ensure the security, privacy, and integrity of their data. Here are some of the most common cloud regulations and standards:

  1. General Data Protection Regulation (GDPR) GDPR is a European Union (EU) regulation that sets strict data protection standards for companies that process the personal data of EU citizens. There are seven fundamental principles of the law governing data protection in the EU that aim to safeguard the interests of EU citizens and hold organizations accountable for data processing. These principles include:
    • Lawfulness, fairness, and transparency
    • Purpose limitation
    • Data minimization
    • Accuracy
    • Storage limitation
    • Integrity and confidentiality
    • Accountability

Ensuring ongoing compliance with GDPR is the responsibility of each company, and there is no designated certification body responsible for this task.

  1. Health Insurance Portability and Accountability Act (HIPAA) HIPAA is a US regulation that sets standards for the protection of sensitive patient health information. HIPAA is organized into three rules: The Privacy Rule, the Security Rule, and the Breach Notification Rule. When it comes to HIPAA compliance, companies are not awarded a certification upon meeting the requirements. Instead, they may undergo periodic evaluations carried out by either an internal or outsourced entity to assess their compliance status.
  2. Payment Card Industry Data Security Standard (PCI DSS) PCI DSS is a global standard that sets security requirements for companies that process credit card payments. This framework contains twelve requirements that companies must fulfill to achieve PCI-DSS compliance. The process of becoming compliant with PCI DSS depends on the level at which a company is; an audit is performed annually under certain prescribed conditions. The certification is valid for one year.
  3. Federal Risk and Authorization Management Program (FedRAMP) FedRAMP is a US government program that sets cloud security standards for cloud service providers. While private sector companies are not mandated to comply with FedRAMP/NIST, its adoption can help them conform to a more standardized approach to privacy, especially in light of the fragmented regulatory system across different states in the US.
  4. ISO 27001:2022 The ISO 27001 standard, jointly published by the International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC), outlines the best practices for managing Information Security Management Systems (ISMSs) to ensure the security of sensitive information. Regardless of whether your company has certified against the new or old version, the ISO 27001 certification remains valid for three years.

Organizations that are currently in the process of obtaining ISO 27001:2013 certification can complete the process by April 2024, and their certification will also be valid for three years, irrespective of the version.  It takes between 12 and 18 months to complete this certification.

  1. SOC 2 is a set of auditing standards developed by the American Institute of Certified Public Accountants (AICPA) that sets criteria for evaluating the effectiveness of a cloud service provider’s controls over security, availability, processing integrity, confidentiality, and privacy. This certification has a one-year validity. The duration of an audit varies from 3 to 12 months, depending on its type. There are two types of audits:
  2. Type 1 audit involves a single audit and report at a specific date and time, which reflects the data security plans of the company at that particular point in time.
  3. Type 2 audit, on the other hand, is conducted over a minimum period of six months, and its report covers the company’s data security plans over that duration.
  4. National Institute of Standards and Technology (NIST) NIST Cybersecurity Framework is a set of guidelines developed by the US National Institute of Standards and Technology that outlines best practices for managing cybersecurity risks. NIST’s cloud computing guidelines are widely recognized and used by cloud service providers and users worldwide.

It covers various aspects of cloud security, including risk management, data protection, access control, and incident response. Compliance with NIST guidelines can help organizations achieve and maintain compliance with other regulatory frameworks, such as HIPAA, PCI-DSS, and ISO 27001.

What is the Shared Responsibility Model?

The shared responsibility model is a concept that defines the responsibilities of cloud service providers and their customers regarding security and compliance in the cloud environment. Under this model, the Cloud Service Provider (CSP) is responsible for securing the underlying infrastructure of the cloud, such as the physical security of data centers, network security, and the security of the hypervisor layer.

On the other hand, the customer is responsible for securing their data and applications within the cloud environment. This includes configuring access controls, securing user accounts, and protecting data stored in the cloud. The exact division of responsibilities may vary depending on the cloud service model being used, e.g. Infrastructure as a Service (IaaS), Platform as a Service (PaaS), or Software as a Service (SaaS).

The shared responsibility model is important because it helps organizations understand their security responsibilities when using cloud services, which is critical to maintaining compliance with regulatory requirements and protecting sensitive data. The cloud providers and your organization have a shared responsibility to ensure a safe and secure network environment. Organizations need to use the tools provided by the cloud providers, as well as other tools, to ensure that they have full visibility and management of their entire network security estate.

How to Achieve Cloud Compliance

Achieving cloud compliance involves several steps that organizations must take to ensure their cloud infrastructure adheres to the required regulations and standards. Some key steps include:

  • Identify relevant regulations and standards Determine the regulations and industry standards that apply to your organization, based on the type of data you process and store in the cloud.
  • Understand compliance requirements Thoroughly review and understand the specific compliance requirements to ensure your organization is meeting all necessary controls and guidelines.
  • Choose a compliant cloud service provider Select a cloud service provider that is compliant with the regulations and standards applicable to your business, and ensure that the provider’s security controls meet your organization’s needs.
  • Conduct regular risk assessments Perform regular risk assessments to identify potential threats and vulnerabilities in your cloud infrastructure and take appropriate measures to address them.
  • Implement security controls Implement security controls to ensure the confidentiality, integrity, and availability of your data in the cloud, such as access controls, encryption, and data backups.
  • Conduct audits and assessments Conduct regular audits and assessments to ensure ongoing compliance with relevant regulations and standards, and to identify areas for improvement.
  • Document policies and procedures Document all policies, procedures, and controls implemented to ensure compliance and to demonstrate compliance to regulators and auditors.
  • Train employees On compliance policies, procedures, and security controls to ensure they are aware of their roles and responsibilities in maintaining compliance.

Cloud Compliance Best Practices

To achieve compliance in the cloud, there are various best practices that organizations can follow. The following methods are particularly useful:

  • Encryption To safeguard the data at risk, it’s important to encrypt it both at rest and in transit. However, it’s crucial to maintain proper key management practices as the security of the data depends on the keys used to encrypt it.
  • Privacy by default Designing systems and processing activities with privacy as a fundamental feature can simplify compliance with data protection regulations and standards.
  • Principle of least privilege It’s essential to grant users access only to the data and resources necessary to perform their duties. This minimizes the risk of compromise by internal or external threat actors and demonstrates compliance measures.
  • Zero Trust Strict authentication, authorization, and monitoring of all users, endpoints, and applications accessing the network on a zero-trust and always verify basis is critical.
  • Well-architected frameworks Organizations can utilize modular frameworks such as those published by leading cloud providers like AWS, Azure, Google Cloud, and the Cyscale platform. These frameworks offer guiding principles to build secure, resilient, and optimized workloads on their platforms.

Cloud Compliance Service Providers

Cloud compliance service providers are companies that specialize in helping organizations achieve and maintain compliance with relevant regulations and standards when using cloud-based services. These providers offer a range of services, which may include conducting risk assessments, designing and implementing cloud security policies and controls, providing compliance training, conducting audits and assessments, and offering ongoing monitoring and support to ensure ongoing compliance.

Organizations that handle sensitive data, such as those in the healthcare or financial sectors, may benefit from using these services to ensure they meet regulatory requirements and avoid costly fines or legal actions. Examples of cloud compliance service providers include AWS Compliance Center, Microsoft Compliance Manager, Google Cloud Compliance, Cyscale, and others.

The Cyscale Cloud Platform for instance gives you full visibility across cloud and data repos, from the app level to your overall compliance posture. Cyscale offers the ability to assess, enhance, and continuously monitor compliance levels across a wide range of regulatory standards, such as GDPR, HIPAA, PCI-DSS, ISO 27001, and NIST. The platform provides automated compliance monitoring, allowing you to stay up-to-date with any changes or updates to these regulations. It also allows for implementing new and updated policies across multiple cloud environments, while also providing the ability to monitor and track all changes. With our 1-year data retention and export options, you can easily access and export data related to policy changes. A free trial is available on request.

Concluding Remarks

As cloud computing continues to expand, adherence to compliance standards is becoming increasingly critical. Data security and privacy are fundamental aspects of the cybersecurity industry, and they are governed by strict international regulations and laws. Failure to comply with these regulations can result in substantial financial penalties, a trend that is expected to continue in 2023 and beyond if proactive measures are not taken by organizations. As responsible companies, we must prioritize the protection of our customers’ data.

The meeting of recognized standards of compliance demonstrates that your organization values the security of customer data and takes proactive measures to ensure it. This can be likened to a seal of approval, universally recognized and trusted. Possessing such a seal indicates that your company is trustworthy and takes the protection of customer data seriously.