How does Cloud Compliance Work?
Cloud compliance is overseen by the IT team of a company, mainly because they are directly involved with handling enterprise data. However, effective compliance management asks for teamwork between the different departments of a company due to the involvement of various factors such as governance, security, risk management, monitoring, etc.
This is how cloud compliance works:
- Define Requirements: Initially, all companies are required to define their cloud compliance requirements within their many departments.
- Vet Providers: The cloud service providers need to be assessed to ensure that compliance standards are up to par.
- Review Regularly: Keeping corporate and cloud compliance synchronized is essential for business as well, this can be achieved by reviewing regularly.
Components of Cloud Compliance
Cloud compliance requirements differ based on your industry and the specific regulations governing your business.
Let’s explore the components that form the basis of general cloud compliance.
1. Standards
Industry-specific standards outline how to handle data securely in the cloud. For example, ISO 27017 and ISO 27018 provide guidelines for cloud security controls, while HIPAA mandates that covered entities and their cloud service providers (CSPs) have a business associate agreement ensuring CSP compliance with HIPAA Rules.
2. Laws and Regulations
Compliance requirements are influenced by global, national, and state laws and regulations related to data privacy, protection, and cybersecurity. Common regulations include HIPAA for healthcare, PCI DSS for payment card security, and SOX for financial reporting.
3. Governance
Effective cloud governance involves implementing controls to manage data securely, defining clear security policies, establishing guidelines for the organization, and sharing and tracking cloud-based information. It also includes defining ownership and responsibility for the cloud strategy.
Why is Cloud Compliance Important?
Cloud compliance is essential due to the increasing reliance on cloud storage and the associated risks. As of 2022, over 60% of corporate data was stored in the cloud, doubling from 2015. The 2023 Thales Global Cloud Security Study reported that 27% of organizations had 60% or more of their workloads in the cloud, up from 23% in 2022.
With this shift, understanding and fulfilling compliance responsibilities is crucial for data security and customer trust. IBM’s 2023 Cost of a Data Breach report revealed that 82% of breaches involved cloud-stored data, with multi-cloud and public cloud breaches costing an average of USD 4.75 million and USD 4.57 million, respectively—both higher than the average breach cost.
Therefore, cloud compliance is vital not only for using cloud benefits like cost-effectiveness and scalability but also for maintaining a strong security posture and avoiding costly data breaches.
Cloud Compliance Challenges
Cloud compliance presents several unique challenges due to the nature of the cloud environment and its associated complexities:
1. Certifications and Attestations
Ensuring both the organization and the cloud service provider (CSP) comply with relevant standards and regulations is critical. This includes obtaining and monitoring certifications and attestations, as compliance status can change with evolving data protection laws and new regulations.
2. Data Residency
Data protection laws often restrict hosting personal data to specific territories. Organizations must carefully choose cloud regions to comply with these laws, potentially requiring a multi-cloud strategy to manage data across various regulatory environments.
3. Cloud Complexity
The dynamic and complex nature of the cloud environment, with its many moving parts, makes it challenging to maintain visibility and control over data. This complexity complicates risk assessment and the formulation of effective data protection strategies.
4. Different Approach to Security
Traditional security tools are inadequate for the dynamic cloud environment. Security solutions must be customized for cloud infrastructure, focusing on configuration management and individual workload protection, as opposed to static environments.
5. Operational Complexity in Multi-Cloud Environments
The growing use of multiple CSPs increases the attack surface and the potential for operational errors. Organizations must ensure compliance across all platforms, which may require specialized teams or enhanced security personnel to manage the complexities.
6. Shadow IT and Data
Unapproved cloud usage by employees (shadow IT) and untracked sensitive data (shadow data) pose significant compliance risks. These can lead to data loss, an increased attack surface, and non-compliance, especially in multi-cloud setups.
7. Over-Reliance on CSP Security
Relying solely on CSP security can create a false sense of security, as even well-known CSPs can have vulnerabilities. Businesses must prioritize their own security management and compliance monitoring, independent of the CSP’s assurances.
8. Lack of use and Centralized Control
Smaller companies may lack the use to demand comprehensive security audits from CSPs. Additionally, decentralized control over cloud vendors, especially when different departments contract services independently, complicates the vetting and monitoring process.
9. Multi-Cloud Accountability
Managing applications across multiple clouds and on-premises systems can obscure accountability for security breaches or compliance failures, making it difficult to track and resolve issues.
10. Overwhelmed IT Resources
IT departments often struggle to manage and monitor compliance across various clouds due to time and resource constraints, compounded by each cloud’s distinct tools and requirements.
Tips for Better Cloud Compliance
If you are looking to enhance your cloud compliance practices, you can follow these seven tips:
1. Identify Regulations and Guidelines
Determine which regulations and industry standards apply to your organization. Familiarize yourself with common frameworks like ISO 27001, HIPAA, PCI DSS, and GDPR to ensure comprehensive compliance.
2. Understand Responsibility
Clarify the shared responsibility model with your cloud provider. For example, in AWS, while the provider secures the infrastructure, you must secure your data and configurations. Ensure your team understands and adheres to these responsibilities to avoid compliance gaps.
3. Ensure Proper Access Control
Implement strict access control policies to limit and monitor who can access your cloud environment. Use need-based access rules and expiration dates to maintain control and minimize unauthorized access, ensuring compliance with least privilege and least functionality principles.
4. Classify Your Data
Sort data into categories to manage, secure, and store it effectively. Keep highly confidential or sensitive data on internal networks if regulations require it to remain within specific territories, aiding compliance and enhancing security.
5. Encrypt Sensitive Data
Encrypt data both at rest and in transit to protect sensitive information and meet compliance requirements such as PCI DSS and GDPR. Even if your cloud provider offers encryption, ensure you manage and enforce encryption policies for data moving to and from the cloud.
6. Conduct Regular Internal Audits
Perform regular internal security audits to identify and address security gaps and vulnerabilities. Stay updated with regulatory changes to proactively adjust your compliance practices, ensuring continuous alignment with evolving standards.
7. Use Automation and Continuous Monitoring
Employ automation tools to reduce human error and ensure consistent compliance. Continuous monitoring capabilities can provide automated alerts for non-conformities and security incidents, helping you maintain compliance as regulations and technologies evolve.
What Cloud Compliance Policies Do Service Providers Cover?
The cloud service provider offers a range of compliance policies to meet the diverse regulatory requirements of their customers. These policies ensure that the services they provide adhere to industry standards and legal regulations. Here’s a summary of the cloud compliance policies covered by top providers like AWS, Google Cloud, and Microsoft Azure:
1. Data Protection and Security
Compliance with GDPR ensures adherence to EU data privacy laws. HIPAA guidelines protect health information in cloud systems. PCI DSS standards secure credit card data during transactions.
2. Information Security Standards
ISO 27001 outlines requirements for an information security management system. ISO 27017 provides guidelines for cloud service security controls. ISO 9001 sets standards for quality management systems.
3. Federal and Government Standards
FedRAMP offers a standardized approach to security for cloud products. FIPS approves cryptographic modules. NIST 800-53 catalogizes security and privacy controls for federal systems.
4. Industry-Specific Standards
CJIS recommendations are customized for law enforcement and national security. MPAA best practices focus on content security in the film industry. My Number Act protects personal identification numbers in Japan.
5. Certifications and Benchmarks
CSA offers best practices for secure cloud computing. Cyber Essentials Plus certifies IT infrastructure security. CIS Benchmark provides guidelines to protect against cyber threats.
6. Data Privacy Frameworks
EU-US Privacy Shield allows for data protection and transfer between the EU and the U.S.
7. Service-Level Agreements and Legal Compliance
SLAs outline responsibilities, incident response, and data breach remediation. SEC Rule 17-a addresses broker-dealer data preservation. SOC reports detail controls over financial reporting, security, and privacy.
Bottom Line
In conclusion, cloud compliance requires an understanding that compliance and security are different but connected. Companies must ensure their cloud providers meet specific compliance needs and recognize that they share responsibility for compliance. This involves working closely with providers, managing cloud use centrally, and going beyond just meeting regulations to protect against security risks and avoid the consequences of non-compliance.
