soc 2 compliance

In an era where data security is paramount, the choice of a Managed Service Provider (MSP) hinges on their ability to safeguard sensitive information for their clients. This is where SOC 2 compliance, established by the American Institute of Certified Public Accountants (AICPA), becomes critical.

It’s not just a standard; it’s a necessity for MSPs to build trust and demonstrate a commitment to a strong data security posture. In this article, we explore the significance of SOC 2 compliance for MSPs and why it should be a key factor in your decision when choosing a provider.

Understanding SOC 2 and Its Relevance

SOC 2, developed by the American Institute of Certified Public Accountants (AICPA), is a framework for managing data security, specifically aimed at service organizations like MSPs. It focuses on five critical principles: Security, Privacy, Confidentiality, Processing Integrity, and Availability. These principles ensure that an MSP not only protects data from unauthorized access but also manages it responsibly throughout its lifecycle.

The relevance of SOC 2 in the MSP landscape is profound. It serves as a comprehensive measure of how well an MSP secures and handles client data, going beyond basic security protocols. This compliance is crucial in today’s data-driven world where businesses are increasingly vulnerable to cyber threats. By adhering to SOC 2 standards, MSPs demonstrate their commitment to data protection, a vital component in establishing trust with clients. For this reason, more and more businesses are asking that their MSP receive a SOC 2 attestation before engaging with their services – a smart move!

Why SOC 2 Compliance Matters for MSPs

SOC 2 compliance is pivotal for MSPs as it signifies a dynamic approach to data security and management. When MSPs undergo a SOC 2 audit, they validate their systems against stringent security standards, showcasing a deep investment in protecting their client’s data. This not only enhances their reputation but also fosters trust among current and potential clients who are increasingly vigilant about their data security.

In this way, SOC 2 compliance offers a competitive edge in building trust. In a market where clients are more informed and concerned about cybersecurity, being SOC 2 compliant distinguishes an MSP from its competitors, potentially attracting clients who prioritize security. Successfully passing this audit can also open doors to new market segments and clients who specifically seek out SOC 2-compliant providers.

soc 2 compliant

The Business Impact of SOC 2 Compliance

The business impact of SOC 2 compliance for MSPs extends far beyond just meeting a set of standards. It fundamentally enhances the way an MSP is perceived in the market. By achieving SOC 2 compliance, an MSP not only secures its systems but also solidifies its reputation as a trustworthy and secure service provider. This heightened trust can lead to increased client retention, a critical factor in the MSP business model.

Additionally, in the event of a data breach, non-compliant MSPs face significant reputational damage, potential loss of clients, and legal ramifications. Conversely, SOC 2 compliance can serve as a safeguard against these risks, ensuring business continuity and stability. It positions the MSP as a leader in security, potentially attracting more discerning clients who value stringent data protection measures.

SOC 2 compliance is not just about meeting a benchmark; it’s about building a resilient, trustworthy business that can thrive in a landscape where data security is a top priority for clients.

Key Benefits

  • Enhanced Data Security: Ensures that MSPs have dynamic systems to protect sensitive data.
  • Increased Client Confidence: Demonstrates a commitment to data protection, building trust with clients.
  • Market Differentiation: Differentiates the MSP from competitors who may not have SOC 2 compliance.
  • Risk Management: Reduces the risk of data breaches and the associated costs.
  • Regulatory Compliance: Helps in meeting other regulatory requirements, providing a comprehensive compliance strategy.
  • Long-term Business Growth: Attracts clients who value security, contributing to sustainable business growth.

soc 2

Achieving and Leveraging SOC 2 Compliance

A SOC 2 audit is designed to assess the risks associated with third-party interactions. It does this by examining the internal controls, policies, and procedures of an organization, ensuring they align with the Trust Services Criteria set by the AICPA. Essentially, a SOC 2 audit report zeroes in on how a service organization manages its internal controls in five key areas: security, availability, processing integrity, confidentiality, and privacy of its system.

Achieving SOC 2 compliance involves a rigorous audit conducted by a certified public accountant (CPA). MSPs can opt for either a Type 1 or Type 2 audit, with Type 1 evaluating the organization’s compliance at a specific point in time and Type 2 assessing compliance over a longer period. This process not only tests the MSP’s security controls but also demonstrates their commitment to maintaining high standards of data security.

Once compliant, MSPs can leverage this status as a powerful marketing tool, showcasing their commitment to security and differentiating themselves from competitors. SOC 2 compliance becomes a badge of trust and reliability, opening up new market opportunities and attracting clients who prioritize data security. This strategic use of SOC 2 compliance in branding and marketing can significantly enhance an MSP’s market position.


SOC 2 compliance is not just a regulatory framework but a cornerstone of trust in the MSP industry. It underscores an MSP’s dedication to security, boosts their reputation, and provides a competitive edge. For businesses seeking an MSP, choosing one with SOC 2 compliance ensures a partnership grounded in stringent data protection and reliability.

If you’re looking for an MSP that embodies these values, consider Coretelligent’s CoreComply service. CoreComply exemplifies the commitment to security and compliance that is essential in today’s digital landscape. Reach out to Coretelligent today to learn how CoreComply can elevate your organization’s data security and compliance.

compliance for financial advisors

The landscape of financial compliance is ever-changing, with 2023 presenting a fresh set of challenges for financial advisors. As regulations evolve and technology advances, staying on top of compliance requirements is more critical than ever.

Cybersecurity: A Non-Negotiable Priority

In the digital age, cybersecurity is a cornerstone of the financial advisory sector. The year 2022 underscored the growing sophistication and variety of cyber threats, from high-profile ransomware attacks to stealthy phishing campaigns. Financial advisors, as custodians of sensitive financial data, face the daunting task of safeguarding against these risks while complying with an array of regulatory standards.

Here’s a deep dive into the current cyber threat landscape and the critical defensive strategies that can help protect your practice:

  • Ransomware: The Persistent Threat
    Ransomware continues to dominate the threat landscape due to its lucrative returns for cybercriminals and minimal risk. The trend of increasing ransomware attacks, which saw a significant rise in attack volume, demands that financial advisors maintain robust data backup systems and have a keen eye for suspicious activities that precede such attacks.
  • The Rise of SIEM Systems
    To combat the ever-present threat of ransomware, implementing a Security Information and Event Management (SIEM) system has become more prevalent. SIEM systems provide real-time visibility across an organization’s information networks, offering a sophisticated approach to threat detection and management. For many, SIEM-as-a-Service (SIEMaaS) has emerged as a cost-effective solution, outsourcing the complexities of cybersecurity monitoring to dedicated experts.
  • Navigating the Hybrid Work Model
    The shift towards remote and hybrid work models has expanded the attack surface for financial institutions. Effective endpoint detection and response (EDR) systems are crucial for monitoring the multitude of devices accessing network resources. EDR solutions stand as a bulwark against malware, isolating and neutralizing threats before they proliferate, especially critical for defending against zero-day exploits where no patch is available yet.
  • Cloud Vulnerabilities and Configurations
    As more infrastructure moves to the cloud, advisors must be vigilant about secure configurations to prevent breaches. Despite cloud platforms offering robust security features, misconfigurations remain a common entry point for attackers. Financial institutions are advised to promptly implement security patches and conduct due diligence when selecting cloud service providers.
  • Strategic Partnerships with MSSPs
    Collaborating with Managed Security Service Providers (MSSPs) who specialize in the financial sector can provide a layer of security and compliance expertise. These partnerships can strengthen IT systems’ integrity and assist in risk mitigation during and post-cloud migration processes.

By embracing these cybersecurity strategies and adopting tools and partnerships that enhance security posture, financial advisors can better protect their client data and adhere to compliance demands. It’s crucial to stay informed about emerging cybersecurity trends and implement lessons learned from past cyber events to reinforce your institution’s defenses.

A Comprehensive Approach to Compliance for Financial Advisors

In the swiftly changing world of financial services, compliance is as much about strategic foresight as it is about reacting to immediate challenges. Coretelligent stands at the forefront, offering a robust compliance platform coupled with expert advisory services tailored to the financial services sector.

CoreComply is designed as a force multiplier, streamlining the extensive compliance process and integrating technology with expertise to proactively manage and mitigate risks.

With CoreComply, financial advisors can expect:

  • A Unified Compliance Platform: CoreComply simplifies the discovery and validation of compliance gaps, integrating tools like Hyperproof and RiskRecon to provide a comprehensive overview of your compliance status.
  • Expert Advisory Services: Beyond technology, CoreComply extends the expertise of seasoned compliance professionals to navigate the regulatory landscape effectively.
  • Technical Remediation Support: CoreComply doesn’t just identify problems; it also assists with the technical remediation required, engaging directly with the necessary measures to correct issues.
  • Cost and Time Efficiency: By optimizing the compliance process, CoreComply offers significant cost savings compared to the in-house purchase of licensing and staffing a vCISO with specialized knowledge.

With regulatory challenges such as fraud prevention, audit response, and risk management growing in complexity, CoreComply’s platform serves as an invaluable ally to financial advisors. By employing CoreComply, advisors can benefit from:

  • Real-time Compliance Monitoring: Keeping pace with real-time changes in compliance requirements, ensuring advisors are always ahead of the regulatory curve.
  • Risk Assessment and Strategy: Conducting thorough risk assessments and providing a clear strategy and roadmap for compliance, aligned with business operations.
  • Incident Response Preparedness: Offering drill-based and discussion-based exercise resources for ransomware and other cybersecurity threats to prepare firms for potential breaches.

At the heart of CoreComply is the commitment to align compliance operations with business strategy, enabling advisors to pursue growth and innovation without the weight of compliance uncertainty.

Empower Your Practice with CoreComply

CoreComply is dedicated to ensuring that financial advisors are equipped with the tools and knowledge for a streamlined, secure, and compliant business practice. Embrace CoreComply’s platform to transform compliance from a task into a strategic asset.

Make the Call for Compliance Confidence

Learn more about CoreComply to see how we can support you in developing a comprehensive compliance strategy that not only meets but exceeds regulatory expectations. Don’t let compliance be your bottleneck—let it be your competitive advantage.

Reach out to us today and take the first step towards a comprehensive compliance solution that puts you in control.

IT Compliance Strategy

Having a robust IT Compliance Strategy is crucial for 2024. The financial tremors of 2022 have left an indelible mark on the operational outlook in the coming new year. With the world grappling with inflation, rising interest rates, and the cost of living skyrocketing – all amidst post-pandemic recovery and geopolitical tensions – businesses find themselves in a new kind of crucible. This pressure cooker does not spare compliance teams, which are critical in safeguarding the integrity and legal fortitude of financial institutions.

Compliance Cost Dynamics in the Financial Sector

The financial implications of maintaining compliance are steep and climbing, as underscored by the intensified scrutiny and complex regulatory requirements in the wake of recent global events. This year, compliance costs continue to soar due to new sanctions and the overarching need to stay ahead in a competitive market. Among the many reasons for these cost increases:

  • Compliance roles have grown in responsibility due to geopolitical unrest, economic instability, banking failures, and the emergence of new technologies like crypto-assets.
  • Financial services firms are struggling with the complexities of navigating these regulations amid finite resources.
  • There’s an increasing breadth of knowledge required for compliance officers to manage a growing number of regulatory changes and associated risks​​.

The Repercussions of Non-Compliance: A Financial Perspective

The stakes for non-compliance are higher than ever, with notable examples such as Sephora’s $1.2 million penalty under CCPA and the multimillion-dollar fines against tech giants in South Korea. These incidents serve as stark reminders of the financial and reputational risks that come with non-compliance.

Adapting Compliance in Response to Economic Pressures

In response to the economic squeeze, compliance departments are exploring avenues to mitigate the impact of reduced staff and capabilities. Rising talent costs and stringent budgets have prompted a need for strategic adaptation, with technology playing a pivotal role in maintaining operational resilience. As economic conditions tighten, financial organizations are adjusting their compliance strategies to maintain efficiency and effectiveness. They’re tackling the challenges of:

  • Reduced staff and capabilities: Economizing on human resources in compliance roles due to budget constraints.
  • Rising talent costs: Addressing the demand for high salaries and the competition for skilled compliance professionals.
  • Technology as a resilience tool: Leveraging technology solutions to enhance compliance operations and reduce dependency on increasing headcount.

Tech and Compliance: A Synergetic Approach to Efficiency

To combat these challenges, financial services are increasingly turning to technology solutions. Data-centric security models and the adoption of zero trust frameworks are becoming prevalent strategies to manage compliance risks proactively rather than reactively.

  • Data-centric security models: Protecting data through its lifecycle to meet compliance mandates.
  • Zero trust frameworks: Implementing rigorous access controls and verification to prevent unauthorized data breaches.

Shifting Towards Outsourced Compliance: A Strategic Financial Perspective

  • In the face of tightening economic conditions, the advantages of outsourcing compliance activities become increasingly evident. Engaging in managed services offers a flexible and cost-effective solution to bolster compliance efforts without the financial burden of expanding in-house teams.
  • Navigating Technological Advances and the Scarcity of IT Expertise: As technological innovations advance, the battle to secure and maintain skilled IT professionals escalates. This struggle is compounded by an expanding array of cybersecurity threats and the imperative for uninterrupted system operations.
  • Addressing Immediate and Strategic IT Requirements: Outsourcing emerges as a viable solution when in-house IT resources fall short of addressing critical strategic needs or when certain IT functions fail to perform optimally, affecting overall efficiency and value.
  • Expanding Skills Access While Minimizing Risks: The trend towards IT service outsourcing is evolving from a focus on cost savings to one of accessing broader skill sets, mitigating risks, and enhancing IT service delivery, thereby aligning more closely with corporate strategy.
  • The Competitive Landscape for Specialized Expertise: The fierce competition for specialized skill sets, particularly in areas like internal auditing, highlights the difficulties in attracting and retaining talent amid rising labor costs and organizational complexities.
  • Adapting to Geographical and Seasonal Needs: Outsourcing presents a strategic response to the challenges of geographical expansion and the demand for part-time or seasonal staff, offering a level of flexibility not easily achieved with permanent, full-time employees.
  • Rising Costs of Compliance Management: In the aftermath of the financial crisis, financial service providers witness a surge in compliance operational costs, often surpassing budget allocations for discretionary initiatives and prompting innovative approaches to cost containment.
  • Interdepartmental Regulatory Compliance Initiatives: The responsibility for regulatory adherence is increasingly becoming a shared endeavor across departments, necessitating diverse executive engagement and the pursuit of regulatory efficiency through cutting-edge technologies for cost-effective compliance management.
  • Leveraging New Technologies for Regulatory Efficiency: The advent of blockchain, robotic process automation, and cognitive computing technologies offers promising avenues for enhancing operational and regulatory efficiency. However, their effective integration presents complex challenges.

Conclusion: Building a Proactive Compliance Posture for Economic Resilience

The path forward for compliance in an economy beset with uncertainties is proactive and forward-thinking. It’s about turning compliance from a cost burden into a strategic advantage, ensuring that every dollar spent today saves several down the line in potential fines, reputational damage, or operational inefficiencies.

At Coretelligent, we understand the intricate balance required to navigate these complex times. Our CoreComply platform is designed to offer reliable, comprehensive solutions tailored to your unique compliance needs. By partnering with us, you can enhance your firm’s compliance strategy, safeguarding against the risks of today and preparing for the challenges of tomorrow.

Learn more about our approach to security and compliance and how we can help you thrive even in the face of economic headwinds by visiting Coretelligent Security & Compliance Solutions.

Cybersecurity for RIAs

Last year the Securities and Exchange Commission (SEC) voted to implement new and amended SEC RIA requirements to the Advisers Act of 1940 for cybersecurity risk management for registered investment advisers (RIAs) and funds.

Is your firm ready?


sec ria cybersecurity requirements

The proposed SEC rule changes would oblige RIA firms to develop and implement written policies and procedures to reduce cybersecurity risks that could harm clients and fund investors. The proposed regulations would also force advisers to report cybersecurity incidents like data breaches involving client information to the SEC.

Additionally, the proposed changes call for publicly disclosing cybersecurity risks and significant incidents from the last two fiscal years in their marketing materials and registration statements.

“The proposed rules and amendments are designed to enhance cybersecurity preparedness and could improve investor confidence in the resiliency of advisers and funds against cybersecurity threats and attacks,” said SEC Chair Gary Gensler.

While comments initially closed in April 2022, comments were reopened on March 15, 2023. Once comments are fully closed, the finalized rules will most likely become effective later in 2023. We will be providing future updates once the final regulations are published.

What do the New SEC RIA Cybersecurity Requirements Entail?

The four significant proposed changes include the following:

  1. The proposal consists of new rule 206(4)-9 under the Advisers Act and new rule 38a-2 under the Investment Company Act. In addition, the proposed cybersecurity risk management rules require public companies to adopt and implement policies and procedures for identifying, assessing, and mitigating cyber risks.
  2. The proposal also includes a reporting requirement under new rule 204-6 mandating companies report significant cybersecurity incidents affecting the adviser, its fund, or private fund clients.
  3. The updated rules include changes to Form ADV Part 2A requiring advisers and funds to publicly disclose cybersecurity risks and significant cybersecurity incidents that occurred in the last two fiscal years in their brochures and registration statements.
  4. The proposal also includes new recordkeeping requirements under the Advisers Act and Investment Company Act Rule 204-2 to improve the availability of cybersecurity-related information and help facilitate the Commission’s inspection and enforcement capabilities.

RELATED CONTENT → Security vs. Compliance: Differences & Similarities

What Can You Do to Prepare for RIA Cybersecurity Enforcement?

Here are some expert tips on being ready for enforcement when the changes go into effect later this year.

  •  Develop and Implement Policies and Procedures

RIAs and funds must create comprehensive cybersecurity policies and procedures to mitigate cybersecurity risks per the proposed rules. Keep in mind that these policies and procedures must be both compliant and actionable.

  • Conduct a Risk Assessment

Evaluate cybersecurity risks by identifying, categorizing, and prioritizing cybersecurity risks related to your systems and operations. By conducting an effective risk assessment, you’ll have the necessary information to develop compliant policies and procedures to combat potential cybersecurity risks.

  • Prepare for Disclosure Obligations

When it comes to disclosures associated with cybersecurity risks or incidents, develop procedures for clear, accurate, and timely disclosures to the SEC, clients, investors, and other market participants.

  • Continuity Planning

In the event of a cybersecurity incident, you must be able to maintain system operations. So, test your incident response and business continuity plans through tabletop exercises to ensure compliance with the requirements.

  • Reporting and Documentation

Employing a governance, risk, and compliance (GRC) solution will ensure you have well-documented evidence that your cybersecurity program is compliant.

In addition to ensuring that your firm will align with the changes, these suggestions are also considered best practices for mitigating the risks from data breaches and other cyber attacks. Following these and other practices makes good sense whether your firm is required to or not.

To learn more about GRC, download our free guide →  Understanding Governance, Risk Management, and Compliance for Financial Services.

By employing these practices, you’ll be ready for any forthcoming changes to cybersecurity regulations and well-protected against potential security threats. One solution for preparing now or later is to work with an experienced and knowledgeable IT service provider. An IT partner experienced with RIA firms, and one employing robust cybersecurity and compliance solutions can reduce the time and resources it takes to comply with and implement these and other cybersecurity compliance standards.

security vs compliance

Security and compliance are often used interchangeably in IT, but that is actually a misnomer as they are not equivalent. So, just what are the differences between security vs. compliance?


security and compliance

Security Vs. Compliance

In understanding security vs. compliance, it’s important to recognize that they are both equally important but for varying reasons. Whereas security drivers are related to mitigating business risks, compliance drivers are regulatory or legal in nature. Compliance and security have similar objectives around managing risks and securing sensitive data and systems. However, they have different processes and workflows to accomplish these goals.

Compliance involves applying regulatory standards to meet contractual or third-party regulatory requirements.  In contrast, security constitutes the implementation of adequate technical controls to protect digital assets from cyber threats.

Still, again, they are similar but not equal. So why is the distinction between security and compliance important? It is significant because implementing one without the other could lead to devastating consequences for your company.


That’s the motivation behind implementing cybersecurity—the desire to protect the confidentiality, integrity, and availability of company assets through security controls and best practices.

IT security is unique to each organization—the measures set by one entity may be entirely different from those of another. Security focuses on comprehensively mitigating any risk that may threaten an organization’s data confidentiality, availability, and integrity—it relates to all the electronic and physical data of an organization and not just those covered by compliance.

We don’t walk around with our bank account or social security numbers on our foreheads—that would be reckless. Instead, we do our best to secure sensitive information from individuals who want to steal it because securing valuable data is a prudent action to reduce the associated risks of identity theft and drained bank accounts.

Cybersecurity acts the same way. Recognizing the risks, smart business leaders choose to secure assets to protect their business from harm and keep their business. The fallout from inadequately securing business assets can lead to loss of business revenue, costly lawsuits and settlements, theft of intellectual property and proprietary information, reputational loss, inability to operate, and business shutdown.

Related Content →  Evaluate your security readiness with our  Cybersecurity Checklist.


The confusion between the two functions arises because the outcomes from implementing compliance measures often overlap with implementing security measures. However, the motivation behind organizational compliance is to ensure that obligations and requirements are satisfied to avoid negative consequences and ensure business viability.

These external compliance requirements and standards include a range of often intersecting and complicated networks of government, industry, financial, and even customer requirements. Cybersecurity is often a small part of a greater set of requirements. Examples include:

  • Self-regulatory organizations like PCI Security Council (PCI DSS) and Financial Industry Regulatory Authority (FINRA)
  • Governmental bodies like the U.S. Securities and Exchange Commission (SEC)
  • Government regulations, including Gramm-Leach-Bliley Act (GBLA), FTC Safeguard Rule, Sarbanes-Oxley (SOX)
  • Privacy standards, including HIPAA/HITECH, GDPR, CCPA
  • Technical Standards and Certifications, including ISO27001, SOC2
  • Control frameworks, including NIST CSF, CIS Critical Security Controls
  • Client SLAs
  • Due Diligence requests (DDQ)
  • And more depending on your industry and other factors.

Looking at the worst possible outcomes, the legal and financial ramifications of non-compliance with these and other standards would lead to your organization paying hefty fines and penalties, facing costly lawsuits, being blocked from working in certain locations and industries, not being able to take payments, loss of financing and investors, not being able to acquire insurance, and more.

Related Content → What is Governance, Risk, and Compliance?

Security vs. Compliance the Big Picture

The reality is that neither IT security nor compliance lives in a vacuum. Instead, they are complementary—symbiotic even. They successfully function from a mutually beneficial association that enhances and reinforces the benefits of each other. One without the other would be like trying to make water without oxygen or hydrogen.

Being compliant with a specific set of standards is not the same as having an effective and robust information security system. Compliance simply measures whether your security protocols meet a given set of one-size-fits-all security standards at a given point in time.

A robust security system makes it easier for an organization to meet compliance standards since most of the needed controls will already be in place. All that would remain to attain compliance would be documentation work and adherence to industry-specific policies.

It’s All About Managing Risk

The real question every business leader should be asking is how to leverage both security and compliance to reduce exposure and risk. Compliance establishes a comprehensive baseline for covering an organization’s overall posture. At the same time, security practices build on that baseline to ensure that the business is protected from every angle.

It’s all about risk. Or, more accurately, reducing risk. And security combined with compliance is the one-two punch every business needs to minimize risk and protect assets.

For companies of any size, Governance, Risk, and Compliance (GRC) is about aligning cyber and information technology with business objectives, while managing risk and meeting regulatory compliance requirements. Therefore, an effective GRC strategy is essential because it pulls together the complexity of various risk, compliance, and governance functions into a single strategy.

Successful companies address cyber risk in a business context. From that point of view, avoiding fines and data breaches are preferable. In establishing and implementing compliance and security, smart leaders treat them as a risk-management concern and not just an “IT problem.” Integrating your security and compliance teams into your risk assessment program will lead to mutually assured success.

Additionally, certain industries, like financial services and life sciences, have overlapping requirements originating from a variety of sources which can make fore a complicated matrix to follow. Working with an IT vendor who specializes in your particular industry is ideal to ensure compliance across all regulations.

Choosing the right security and compliance solutions is also critical. Operating with a “checkbox” approach to either compliance or security will lead your organization toward a rocky future. Instead, focus on developing and adhering to robust policies and choosing the right solutions based on your industry needs, risk assessment, and business goals to satisfy and streamline your compliance and security activities.

Data Breach Detection

With the increasing reliance on technology in today’s business world, the risk of data breaches is at an all-time high, making breach detection a crucial factor in protecting sensitive data.

Data Breach Detection

Detecting a data breach early on can help organizations limit the damages, preserve their reputation, and prevent further unauthorized access to their systems. Despite this importance, many businesses struggle to identify data breaches as they happen, only realizing something is wrong when it’s too late. We outline some helpful insights about the importance of breach detection and the strategies they can adopt to improve their breach detection capabilities to protect their business before, during, and after a data breach.

Causes of a Data Breach

A variety of factors can cause a data breach, including human error, malicious attacks, and software errors. Human error includes misconfiguring security settings or sending sensitive data to the wrong recipient. Malicious activities, such as ransomware attacks or phishing scams, are escalating and increasing in frequency and can lead to unauthorized access to sensitive information or data loss. Additionally, software system errors or vulnerabilities can provide entry points for attackers to exploit.

The growing reliance on third-party vendors and the complexity of supply chains have also increased the potential for supply chain attacks, where attackers target a third-party vendor’s systems to get access to valuable information. Therefore, understanding the causes of data breaches is vital for businesses to identify vulnerabilities and implement appropriate security measures to prevent them.

Data Breach Detection

The majority of data breaches are discovered by external sources, meaning that an external entity, rather than the affected business, was the first to recognize the breach. This makes it clear companies need to improve their data breach detection systems to monitor and detect potential breaches in real time.

With so many data breaches occurring every day, it’s critical for organizations to stay vigilant and invest in the latest technologies, and to detect potential breaches as soon as possible. By prioritizing breach detection and response, businesses can mitigate the damage caused by a breach, protect their customers’ data, and maintain their reputation.

Identifying High-Value Data

Identifying and securing high-value data is critical in protecting sensitive information from unauthorized access, loss, or theft. High-value data can include business trade secrets, intellectual property, financial information, personally identifiable information, and other sensitive information that could harm your business or customers if leaked or breached. To identify high-value data, a company must conduct a thorough inventory of data assets, categorize data based on sensitivity, and apply appropriate security controls to protect it from unauthorized access.

Effective security controls should include access controls, encryption, multi-factor authentication, and data loss prevention tools. Protecting high-value data may require additional resources and investment, but the potential cost of a data breach can be devastating. By prioritizing data protection for high-value data, businesses can minimize the risks associated with a data breach and build a trusted reputation with their customers.

Active Monitoring Processes

Active monitoring processes are essential for preventing data breaches and protecting sensitive information from unauthorized access. Active monitoring involves continuous monitoring of a system’s security posture to identify potential threats, suspicious activities, or vulnerabilities. By proactively monitoring networks, applications, and data usage, businesses can quickly detect and respond to security incidents before they become full-blown breaches.

Active monitoring processes can include but are not limited to, security information and event management (SIEM) solutions, intrusion detection and prevention systems, network and endpoint protection tools, and data analytics platforms. These tools provide a holistic view of the organization’s security posture and enable businesses to take timely action against probable security threats. Through active monitoring and timely response, organizations can prevent data breaches, protect sensitive information, ensure compliance, and maintain their reputation.

Rapid Remediation After a Data Breach

Rapid remediation is a crucial step in limiting the damage caused by a data breach. Once a breach has been detected, acting quickly and decisively to contain it and minimize the harm is essential. Rapid remediation strategies may include, among others, isolating affected systems, disabling breached accounts or systems, restoring from backups, identifying and removing malware or other malicious software, and conducting forensic analysis to determine the extent and root cause of the breach. The ultimate goal of rapid remediation is to lessen the severity of the breach and protect sensitive data from further exposure.

By responding to a breach quickly, businesses can reduce their financial and legal liabilities, safeguard their reputation, and mitigate operational disruptions. Effective remediation requires a well-defined incident response plan, including clear roles and responsibilities, thorough documentation, and continuous improvements in response to changing threat landscapes.

In conclusion, data breaches are becoming more sophisticated and prevalent, making breach detection an essential component of data protection strategies. Therefore, organizations must stay up to date with the latest technologies and adopt a multilayered approach to cybersecurity, including monitoring, training, and incident response planning.

Related Content

Looking to evaluate your organization’s current security coverage? Use our Cybersecurity Evaluation Checklist to help you appraise your firm’s cybersecurity readiness. This checklist is a jumping-off point to help your enterprise determine its ability to mitigate the risk of cyberattacks before it is too late.


Only by adopting a proactive, comprehensive approach can organizations hope to prevent significant breaches, mitigate their impact, and protect sensitive data. However, when it comes to data breaches, it’s not a matter of if but when. Therefore, businesses must continuously assess their IT security posture and adopt proactive measures to detect and respond to potential breaches. Only then can they safeguard sensitive data, ensure compliance, maintain operations, avoid liability, and avoid the headlines.


Today’s businesses operate in a global landscape where data privacy and security compliance are more complex than ever. Case in point, there is a significant amount of uncertainty about the upcoming CPRA requirements and how it differs from the CCPA. Let’s look at CPRA vs. CCPA.




The California Privacy Rights Act strengthens the consumer privacy rights outlined in the CCPA and establishes new data security requirements for businesses with enforcement beginning on July 1, 2023.

Businesses must protect the privacy of personal information, including taking steps to implement authentication procedures, updating policies, and securing user data. In addition, businesses must comply with CPRA by July 1, 2023, or face potential fines, lawsuits, and more.

In terms of CPRA vs. CCPA, it is important to note that the CPRA does not replace the CCPA. Instead, the CPRA amends CCPA by adding clarifications and strengthening provisions.

What is the California Consumer Privacy Act (CCPA)?

Enacted in 2018, the CCPA was the first significant privacy law in the US after the EU adopted the General Data Protection Regulation (GDPR).

The CCPA is a baseline law that created consumer privacy protections like the right to know what personal information a business collects and shares. It required companies to provide notice of their data practices and more. It applies to all businesses operating in California, whether they have a presence in the state or not.

The CCPA requires businesses to provide certain notices and disclosures, such as a dedicated privacy policy, to individuals before collecting their personal information.

What is the California Privacy Rights Act (CPRA)?

The CPRA builds upon the CCPA by further expanding consumer privacy rights and strengthening data protection requirements. For example, the CPRA grants consumers even more control over their personal information by requiring businesses to obtain explicit consent for data processing activities outside the scope of contractual necessity or legal obligation. It also adds more data security requirements and expands the scope of data security procedures covered by the law.

Key Differences Between CCPA and CPRA

Businesses should note that the main distinction between the CCPA and CPRA is the addition of strict consumer data privacy and security provisions. For example, the creation of a new category of sensitive personal information expands the data types that are subject to greater protection measures. Additionally, the mandatory cybersecurity and risk assessments and third-party audits required for some businesses will add additional layers of complexity to compliance programs.

 CPRA Data Security Updates

Here are some data security requirements outlined in the CPRA:

  1. Reasonable security measures: California privacy law expects businesses to implement “reasonable” security measures to protect the personal data they collect.
  2. Sensitive personal information protection: CPRA expands the categories of personal information, and businesses must employ reasonable security measures to protect this data, including encryption and access controls.
  3. Annual security audits: The CPRA requires that businesses performing higher-risk processing (as defined by the CPPA) conduct annual cybersecurity and risk assessments, as well as vulnerability assessments and penetration testing.
  4. Third-party vendor security: Companies must conduct due diligence on vendors that handle personal information, ensure they have adequate data protection measures in place, and only transfer data to vendors with confidentiality agreements in place.
  5. Training and education: Businesses must train their employees to manage personal data and ensure they understand how to protect it.
  6. Data breaches: The CPRA now considers email account leaks as data breaches, particularly if such leaks result in the exposure of personal details linked to people residing in California, as well as when security question leaks occur.
  7. Data minimization and retention: Companies must limit the data they collect, store, and retain to a reasonable amount necessary for their operations.

Potential Consequences of Non-Compliance

The potential outcomes of non-compliance are significant. The CPRA clarifies consumers’ rights to sue for violations and creates the California Privacy Protection Agency (CPPA) to enforce the CCPA and CPRA. Companies that violate the laws can face hefty fines and sanctions, including criminal penalties or suspension of the company’s ability to conduct business in the state. Additionally, organizations that fail to comply could become subject to costly and time-consuming lawsuits.

Announced in August 2022, the first enforcement action of the CCPA was a $1.2 million settlement against Sephora for neglecting to inform consumers about the sale of their data and to adequately process sale consumer opt-outs.

Enforcement actions are expected to increase after the full force of the CPRA goes into effect in July 2023.

How to Navigate a Changing Regulatory Landscape

It is critical to know what data your business collects and how it is secured to ensure compliance with the CCPA and the CPRA. Working with an IT partner that understands data privacy laws and regulations and data security requirements is essential for organizations looking to stay compliant in this increasingly regulated environment.

Your organization may also be required to follow additional requirements like the European GDPR or New Yorks’s Shield Act. By enlisting the services of a qualified IT services provider, organizations can make certain they are up to date on all the latest regulations and utilizing best practices for data protection. In addition, having an experienced IT partner means businesses can avoid disruptions and safeguard operations and focus on growing their bottom line.

Related Content → Read about how a GRC-enabled solution can streamline and simplify compliance  Understanding Governance, Risk Management, and Compliance for Financial Services.


NY SHIELD Act Data Privacy Laws

As data breaches increase in frequency and severity, regulators are implementing new data privacy laws to reduce consumer risk.

Currently, there are no comprehensive data security or privacy laws at the federal level. As a result, individual states are implementing laws to protect their residents. Unfortunately, this creates a complex maze of overlapping data privacy laws businesses must follow. The NY Shield Act is an example of one of these laws.


NY SHIELD Act Data Privacy Laws

What is the NY Shield Act?

The NY Shield Act, or Stop Hacks and Improve Electronic Data Security Act, is a set of laws that require businesses to take specific steps to ensure the security and privacy of sensitive customer data. Implemented in 2020, it amended the New York state’s existing data breach notification law to impose stricter data security requirements on companies to protect consumers’ personally identifiable information from misuse, breach, or unauthorized access.

Who Needs to Comply with the NY Shield Act?

The NY Shield Act applies to all companies operating in New York State or gathering information from residents of New York, even if they are not based in New York or the United States.

What’s Required of Businesses?

Businesses must implement a Data Security Program and reasonable safeguards to ensure private information is stored and erased safely. This prescription includes physical, technical, and administrative controls to protect sensitive information. Additionally, businesses must notify customers whose data has been compromised if a breach occurs.

What Are the Consequences of Non-Compliance?

Businesses must take “reasonable” steps to comply with the NY Shield Act. Companies that fail to take these steps or lack proper security measures could face fines and penalties. Fines for non-compliance start at $5,000 up to a maximum of $250,000, and the state Attorney General can also initiate a civil action case and levy penalties against violators.

Recent civil actions lawsuits for violations of the Shield Act include:

  • Wegman’s agreed to pay $400,000 in penalties in June 2022 after it was discovered that cloud storage containers hosted on Microsoft Azure were left unsecured and open to public access, potentially exposing consumers’ data.
  •  A 2020 agreement with EyeMed that resolved a 2020 data breach that compromised the personal information of approximately 2.1 million consumers nationwide required that the company pay $600,000 in penalties.
  • In 2022, the NY AG and 45 other Attorneys General received $1.25 million from Carnival Cruiseline as part of a multistate settlement after a 2019 data breach exposed the personal information of 180,000 Carnival employees and customers nationwide.


“In the 21st century, there’s no excuse for companies to have poor cybersecurity systems and practices that hurt consumers,” wrote NY Attorney General Letitia James regarding the Wegman’s settlement.

Is this like CCPA?

Yes and no. CCPA is a data privacy law, while the SHIELD Act is a security regulation. The California Consumer Privacy Act focuses on data privacy, and the NY SHIELD Act is a security law. The CPRA, a later update to the CCPA, includes data security provisions.

The main takeaway is that, just as with the CCPA, businesses must comply with the Shield Act if it conducts business in the state or collect information from residents, even if the company is located outside the state.

What Are the Key Requirements of the SHIELD Act?

The NY Shield Act requires companies to:

  • Implement security measures appropriate for the size, scope, and type of business.
  • Ensure their service providers maintain the same level of data security as you do.
  • Create a written Information Security Program to protect sensitive customer information from unauthorized access or use.
  • Regularly assess and test the security of your systems.
  • Provide training to your staff on security and privacy best practices.
  • Notify customers in a timely manner in the event of a data breach.

How Can I Comply with the NY Shield Act?

The best way to comply with the NY SHIELD Act is to create an Information Security Program that addresses the requirements of the law. The program should include policies and procedures for protecting sensitive information, such as multifactor authentication and access control measures, regularly testing your systems, training staff on data security best practices, and providing timely notification to customers in the event of a breach. You should also ensure that any third-party vendors you use are compliant.

Data Security vs. Data Privacy: What’s the Difference?

It’s essential to understand that data security and data privacy are not interchangeable terms. While both aim to protect data, they focus on different aspects. Data privacy focuses on individuals and their rights to protect their personal information from being used by companies and governments without consent. Data security protects against unauthorized access to sensitive information by employees, bad actors, or malicious software. Ultimately, the goal is to ensure that data remains safe so that organizations and consumers can trust that their data is being used as intended.

Next Steps for Compliance

The NY SHIELD Act is a vital law for protecting sensitive information and maintaining consumer trust in an organization. Business executives must ensure full compliance with the law, including implementing a data security program, performing routine assessments, and appropriately responding to security incidents. Working with an IT partner experienced with the Shield Act and other data privacy laws and regulations is ideal. Protecting customer data is essential in today’s digital world and can only be achieved through implementing effective security measures.

GDPR Requirements

Businesses today are in a race to become more connected and technologically advanced. With more data available than ever, organizations must implement measures to protect sensitive information from cyber threats and misuse.

This directive becomes even more vital considering the crisscrossing data privacy laws from various sources, including the General Data Protection Regulation (GDPR). While you are most likely familiar with this regulation, it is essential to understand what it entails and how it impacts your organization. Read on to learn more about the GDPR requirements impacting you and your business.


GDPR Requirements

What is GDPR?

The General Data Protection Regulation (GDPR) was enacted to protect consumer data privacy rights in the European Union. All organizations that manage customer data will be held responsible for its proper handling, regardless of location. Thus, any non-European organization that handles or collects the personal data of EU citizens is subject to GDPR.

GDPR compliance is vital for organizations seeking to protect their customers and business reputation. Non-compliance can result in personal liability, job loss, huge fines, administrative penalties, and more.

7 Must-Know GDPR Requirements

  1. Who does it apply to? GDPR applies to any business that collects, stores, or processes personal data from individuals in the EU, regardless of the company’s location.
  2. What types of data privacy does it cover? The GDPR protects a wide range of personal information, including names, addresses, email addresses, phone numbers, photos and videos, biometric information such as fingerprints and retinal scans, IP addresses, web cookies and browsing history, and more.
  3. What are the requirements of GDPR? GDPR requires companies to obtain explicit consent for data collection, protect personal data, provide access to data subject requests, and notify authorities about data breaches.
  4. What should companies do to comply? First, companies should appoint a Data Protection Officer, perform regular data protection impact assessments, and provide employee training.
  5. What about GDPR and third-party risk management? The GDPR requires companies to establish contractual agreements with third parties to ensure compliance with the GDPR’s data protection requirements. In other words, you are responsible for the activities and compliance of your third-party vendors regarding data from the EU.
  6. What are the consequences of non-compliance? The penalties for non-compliance with GDPR can be up to 4% of global revenue or €20 million, whichever is greater. Furthermore, failure to report a breach in time can cause fines as high as €10 million, which is on top of the cost of notification and any business losses caused by the breach. In addition, non-compliance may result in lawsuits from impacted consumers, business disruption, and reputational damage.
  7. What are GDPR’s implications for data breaches? GDPR requires companies to notify authorities and affected individuals about data breaches within 72 hours of discovery.

Next Steps for Ensuring GDPR Compliance?

The best way for business executives to ensure that their organizations comply with GDPR is to create a comprehensive data privacy and security plan.

  • Conduct a data audit: Identify the personal data your business processes, where it comes from, and who has access to it.
  • Update your privacy policy: Ensure your privacy policy is written in clear language and includes information on how personal data is collected, used, and processed.
  • Obtain appropriate consent: Obtain explicit consent from individuals for collecting, processing, and using their personal data.
  • Implement appropriate security measures: Implement technical and organizational measures, such as encryption and access controls, to protect personal data.
  • Train employees: Educate employees on GDPR compliance and appoint a data protection officer to oversee compliance efforts.

The Data Privacy and Security Landscape

Of course, GDPR is not the only set of regulations you need to worry about regarding data privacy and security. In response to the growing threats from data breaches, your firm must address a whole set of overlapping laws. From other regional regulations like the California Consumer Protection Act to industry-specific requirements, your firm must comply with a complicated compliance matrix.

Working with an IT partner can ensure that your firm utilizes the best practices for all the required regulations and reduce your risk exposure. Doing so will enable you to protect client data, streamline compliance obligations, create a secure online environment, and keep you and your firm out of the headlines.

GDPR compliance is essential for organizations that want to protect customer data and safeguard their business reputation. Therefore, companies should take the steps outlined above to ensure they comply with GDPR, such as conducting a data audit, updating privacy policies, obtaining appropriate consent from customers, implementing security measures, and training employees. Ultimately, these steps will help companies avoid any severe penalties or repercussions due to non-compliance with GDPR regulations.

As a C-level executive in the financial services industry, you are constantly looking for ways to optimize your firm’s operations, achieve strategic goals, and reduce risk. Governance, risk management, and compliance (GRC) can help you do just that.

GRC is a framework designed to help organizations align their objectives with risk management and compliance policies.


What is governance risk and compliance?


In today’s highly regulated business environment, organizations need to have a comprehensive GRC system that enables them to manage their risks effectively, comply with regulations and laws, and meet the needs of their stakeholders. Let’s explore why organizations need effective GRC and how it can help them achieve their strategic goals.

What is GRC?

GRC comprises three key components to align policies, reduce risk, and ensure compliance.

Governance is the process of developing and adhering to policies, procedures, and practices that support an organization in meeting its business objectives. An effective governance system helps ensure that the organization makes decisions aligned with business goals. In addition, by establishing effective governance, organizations can ensure that their plans are being implemented effectively and have the necessary structures, processes, and systems in place.

Risk Management is the process of identifying, assessing, and mitigating risks associated with operations within the firm or from external threats the firm faces. An effective risk management program will help identify potential risks early so that they can be addressed before they become significant issues.

Compliance is the adherence to mandated internal and external standards, regulations, and best practices that must be met for a firm to operate responsibly and fulfill legal obligations. Good compliance requires an effective combination of policies, procedures, training, monitoring, and corrective action.

Why Does My Firm Need a GRC Program?

Financial services firms are under tremendous pressure from increased regulations, heightened scrutiny from investors, clients, and other stakeholders, and rising security risks. However, according to Hyperproof, 65% of businesses still manage IT risks using an “ad-hoc, reactive approach, with siloed processes and disconnected tools.”

A robust GRC response can benefit these firms by helping them address expanding regulations, control risk across all business units, reduce the cost associated with audits and due diligence questions (DDQs), improve compliance processes, and streamline reporting requirements.

Related Content → IT Security and Compliance. What’s the Difference?

By combining these three components into one unified system—GRC—firms can benefit from a variety of outcomes, including:

  • Improved efficiency across departments
  • Increased visibility into compliance requirements
  • Reduced costs through streamlining processes
  • Better identification of potential risks
  • Streamlined reporting
  • Better decision making
  • Enhanced stakeholder confidence
  • Strengthened brand reputation
  • Improved organizational agility
  • Amplified data security and privacy protection

By bringing governance policies and procedures, risk management, and compliance programs together, firms can swiftly adapt and adjust as needed while remaining compliant with all applicable regulations and internal best practices. Moreover, with integrated GRC—it will become easier for executives to confidently navigate today’s complex world of risk analysis and regulatory compliance more successfully.

Solving GRC

In the past, GRC organizations implemented GRC as distinct activities. Processes and systems were created in silos and often in response to a specific trigger—like new regulations, security incidents, or audit findings – without integration throughout the company. The approach created a web of inefficiencies, redundancies, and inaccuracies that left businesses vulnerable to fines and penalties, lawsuits, reputational damage, and even loss of revenue.

In today’s world of increased risks and shifting compliance, it is of the utmost importance to implement a GRC solution that creates an effective foundation for recognizing, assessing, and controlling risks. In addition, organizations must remain continuously vigilant and responsive to the ever-evolving risk and compliance environments with ongoing monitoring, support, and guidance.

GRC tools should also reinforce and streamline your policies, procedures, and processes. Given the complexity of the financial services industry, many firms are choosing an IT partner with domain expertise and one that provides strategic guidance and know-how in addition to a technology platform.

DOWNLOAD → Read more about the must-have elements of a GRC platform and IT partner in Understanding Governance, Risk Management, and Compliance for Financial Services.