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What is Cloud Compliance and Why is It Important?

Cloud compliance ensures the safe and secure use and storage of data through strict adherence to existing cloud computing rules and guidelines, including applicable federal or international laws and regulatory compliance, as well as industry frameworks and best practices.

Compliance regulations vary by industry and location, and some compliance needs are more complex. For example, compliance is especially important in healthcare, an industry that must follow strict rules for managing sensitive data under the Health Insurance Portability and Accountability Act (HIPAA).

With the use of their products and services -- collaboration tools, software as a service and storage among them -- on the rise amid heightened cybersecurity threats, shrewd organizations recognize that cloud compliance limits data breaches and data misuse. Moreover, organizations failing to comply with regulations risk legal fines and penalties, as well as lower trust and loyalty with consumers.

Cloud compliance is a complex, adaptable process that requires a structured approach to establish and maintain, especially as regulations evolve with emerging technology, such as artificial intelligence (AI).

It involves several steps typically handled by the IT department, but other organizational leaders contribute to decision-making, auditing and legal guidance.

To establish cloud compliance, organizations first assess which regulations and guidelines are applicable based on region and industry. Then, security controls address the identified regulatory concerns through personal data protection measures, such as encryption and access control. For example, organizations employ data security measures to protect cloud data, including multifactor authentication and zero-trust security. When adopting new cloud-based services in the organization, cloud vendors are properly vetted to ensure that they respect data privacy and that their new technology follows applicable regulations.

Of course, regulations change, so it's important that organizations continuously monitor their cloud usage and data management. Reviewing preestablished security controls and regularly auditing the process limit accidental noncompliance.

Cloud compliance, from established security controls to compliance audit reports and risk assessments, must be thoroughly documented. This process helps organizations identify concerns that arise. Thorough reporting of compliance efforts also demonstrates organizational propriety if data privacy issues arise.

Cloud compliance, while an important part of data security and management, includes many nuanced challenges. An organization's leaders and IT team must ensure these challenges are addressed properly. Otherwise, organizations face noncompliance and its consequences. Among the concerns organizations encounter with cloud compliance are the following:

• Complex regulation compliance. With changing regulations and standards, the compliance landscape is difficult to navigate. Especially for organizations undergoing internal change, maintaining consistent compliance is time-consuming and, without deep knowledge of data protection, data privacy and cybersecurity, difficult to achieve.
• Multi-cloud environments. For many organizations, multi-cloud environments -- with different servers from different providers -- are necessary to handle the many functions of a business. However, multiple cloud services make compliance even more complex because different providers typically have different protocols and certifications. It's especially important to coordinate compliance efforts and recognize differences among providers to avoid security gaps.
• Data residency. Data sovereignty laws, which regulate where data is stored and managed based on location, must be carefully considered, especially within organizations operating in multiple jurisdictions.
• Security breaches. Mismanagement of data and misconfigurations in cloud services lead to data breaches, putting data and that data's subject at risk. Although some misconfigurations come from human error, others originate from settings within cloud services. Vigilant organizations quickly identify and rectify errors before a breach occurs.
• Certifications and attestations. Organizations and cloud providers both must demonstrate cloud compliance, including obtaining and renewing necessary certifications and attestations to pass required audits.
• Continuous monitoring. Cloud compliance is not a one-and-done process. Instead, it requires continuous monitoring and auditing of established processes, despite their costs and complexities, to ensure cloud services always meet regulatory standards.

Cloud compliance is an essential business practice, but its intricacies make it burdensome to manage. Here are some best practices to ensure cloud compliance remains effective and efficient:

• Employee training and compliance awareness. Cloud service employees who are regularly trained on cloud compliance better understand its importance and take personal responsibility to ensure compliance. These employees typically flag and rectify issues quickly.
• Principle of least privilege. The principle of least privilege and other access management practices lower the risk of a security breach because data flows through fewer people and programs.
• Access control monitoring. Setting and monitoring appropriate access controls -- authentication and single sign-on among them -- protect data from leaks or unauthorized access. However, simply putting these systems in place is not enough. Again, organizations must continuously monitor and modify these controls to identify irregularities and mitigate issues.
• Data encryption. Encrypting data keeps it safe and secure when at rest or in transit. Encryption scrambles the data and information, making it unreadable to an outsider until it is decrypted by authorized personnel. Encryption is especially important as cyberattacks rise and data becomes more easily accessible in remote environments.
• Provider comparisons. Before choosing a new cloud vendor, comparing and assessing different options pinpoints providers that align with an organization's specific needs. Seek a provider with comprehensive compliance frameworks, strong protocols and the necessary certifications.
• Automated monitoring. As mentioned, continuous monitoring and auditing is time-consuming and resource-intensive. However, some tools automate compliance monitoring to reduce the organizational burden. Automated monitoring consistently checks cloud configurations to identify issues proactively and find areas for improvement, all without taking up time from employees.
• Incident response plans. Incident response plans provide a framework for organizations to address and mitigate data breaches or compliance violations, providing clear instructions to address these concerns quickly and effectively.

Compliance standards -- and their organizational effects -- vary depending on the region and industry. Tracking the most important compliance standards is essential to recognize upcoming changes. The following are among the key compliance standards affecting organizations:

• General Data Protection Regulation. GDPR is a regulation from the European Union that governs data protection and privacy for EU citizens, even if the business is not based in the EU. It imposes strict requirements on how organizations collect, store and process personal data, including proper encryption, data deletion and timely data breach notifications.
• HIPAA. HIPAA protects sensitive information for patients in the United States. Healthcare organizations that deal with protected health information must take the proper measures, such as privacy notices and data access or deletion for consumers, to keep patient information secure.
• Payment Card Industry Data Security Standard. PCI DSS protects credit card information, whether it is being processed or stored after a financial transaction. This standard keeps cardholder data secured through vulnerability management, access control measures and secure networks.
• International Organization for Standardization/International Electrotechnical Commission 27001:2022. ISO/IEC 27001:2022 provides an outline for establishing, maintaining and continually improving an information security management system. ISO 27001 ensures that organizations with a comprehensive information security management system have ensured the integrity, confidentiality and availability of data.
• National Institute of Standards and Technology. NIST provides a framework for federal agencies to handle information security and manage cybersecurity risks properly. Although targeted to federal agencies, it guides cybersecurity management for cloud services and private sector organizations, including identifying and managing risks within cloud environments.
• Federal Risk and Authorization Management Program. FedRAMP, a U.S. government-wide program, standardizes security efforts for cloud products, including assessment, authorization and monitoring. FedRAMP is especially important for organizations that want to work with federal agencies, as compliance with the program shows they meet strict security requirements.
• California Consumer Privacy Act. CCPA protects consumer privacy for California residents. Businesses that collect personal data from California residents and manage it in the cloud are required to meet the privacy requirements of CCPA, including privacy notices and consumer access and deletion requests.

• Top cloud compliance standards and how to use them

• Top cloud security challenges and how to combat them

• Cloud vulnerabilities that can cripple your environment

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