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10 Steps to effective compliance risk management

10 Steps to effective compliance risk management

As your business grows, you’re getting more customers and onboarding more employees. As your internal and external network grows, and more people and partners interact with your company’s data and information environment, it’s critical to ensure you’re in compliance with the various rules and regulations that govern the spaces in which you are doing business. You need an effective compliance risk management strategy. Where do you even begin? Follow these ten steps.

1. Add these key terms to your knowledge base

What is compliance risk management in the first place? Risk management describes the process of proactively identifying potential risks, analyzing those risks, and taking precautions to minimize risks; compliance risk management describes an organization’s process of managing the risk of non-compliance with pertinent regulations.


A compliance framework is a system by which your company can assess, or have assessed, its adherence to best practices in accordance with the regulations and other requirements that are meaningful to your company. The SOC 2 standard is one example of a compliance framework.

2. Know the compliance needs associated with your industry

Whether your organization operates in fintech or healthcare, in human resources or in team collaboration — it’s essential that your company works across departments to understand the various risks and compliance needs associated with SaaS in your particular industry.

It’s essential that your company understands the harms that can result if an identified risk comes to fruition. Once you have established possible risks, your compliance risk management team can prioritize risks and comprehensively manage potential harms in a holistic, strategic fashion.

Regulations apply to specific sectors and areas of work (e.g. HIPAA in the healthcare industry) and your company may need to be in compliance with a variety of regulations depending on your business model, your customers, the data your company handles, and other companies and partners with whom you do business. Consider the ecosystem in which you operate, and the rules and regulations that apply to the various parts of that ecosystem.


3. Replace yesterday’s risk management practices with a forward-looking approach

Companies used to manage security and compliance as separate, distinct stages in a process, led by different groups. Today, the speed and scale with which  security and compliance lapses can be exploited has increased exponentially, and cybersecurity is more important than ever. A significant volume of data can be compromised in an instant — and your customers can lose trust in your business just as swiftly. The complex, interconnected data ecosystem in which today’s businesses are situated requires an equally interconnected and comprehensive approach to compliance risk management and data security. Where a reactive risk management strategy might once have kept your business above water, today a proactive strategy that puts your company out ahead of possible compliance risks will also help put you ahead of your competitors.

4. Understand the importance of an integrated compliance strategy

An integrated compliance strategy is one that applies across your company, and that involves all aspects of your company — bringing in key voices and insights company-wide to ensure that compliance has been considered from every angle. Gathering input and participation from a breadth of voices and workstreams across your company is essential in order to gain a clear and comprehensive understanding of the rules and regulations that impact your business. And it’s essential that all components of your company are operating in sync. If one part of the company is exercising good compliance management processes but another area is not, the company as a whole will suffer under a failure of compliance.

5. Consider who in your company should be involved

Engage senior managers, risk specialists, and key representatives from across your company’s departments to ensure that the full picture of your organization and the risks it faces are present and accounted for. In other words, build a risk management structure that matches your company’s structure. Together, your cross-departmental compliance risk management team can consider the rules and regulations that impact your industry, evaluate your company’s current compliance, and assess the need for, management of, and distribution of resources that will support a holistic compliance strategy.

6. Know the ins and outs of a few of the most common regulations

Your company will be subject to rules and regulations depending on your business model and your vendor and customer ecosystem. A few common regulations that you should consider include:


  • GDPR: GDPR is the General Data Protection Regulation, applicable as of May 25 2018; its goal is to harmonize data privacy laws across Europe and to give individuals greater control over their personal data. The GDPR applies to any company that processes personal information of individuals inside the European Economic Area (EEA), comprised of the European Union, its member states, and the three states of the European Free Trade Association.
  • CCPA: CCPA is the California Consumer Privacy Act, effective as of January 1 2020, which impacts companies that do business with California residents.
  • HIPAA: HIPAA is the acronym for the Health Insurance Portability and Accountability Act, passed by Congress in 1996 with the goal of improving health care portability and the handling of confidential health information. HIPAA compliance is required of organizations and employees who work in or with the healthcare industry, or who have access to protected health information (PHI).

If, for example, your company handles protected health information and does business with EU countries as well as the state of California — all three of these regulations pertain to your company and how it manages its holistic security ecosystem. Your compliance risk management team will want to stay on top of various existing and emerging regulations that could impact your business.

7. And a few of the most common compliance frameworks

The process of getting and staying in compliance with required rules and regulations is different for every company, but commonly involves proving security and compliance against a standard assessment tool or set of guidelines. Adherence to a standard serves as a way to communicate to your customers and prospects that you are effectively protecting the data and information your company manages or works with. Two common standards and compliance frameworks include:


  • A SOC 2 report lists a company’s verified security practices. “Verified security practices” are security measures that a company implements, which are then verified by a trusted auditor, a CPA. Only licensed CPA firms can perform a SOC 2 examination. SOC 2 is an evaluation structure comprised of five Trust Services Criteria utilized to evaluate and report on the suitability of the design and operating effectiveness of controls relevant to the Security, Availability, Processing Integrity, Confidentiality, or Privacy of an organization’s information and systems. Of the five criteria, the Security category is required to obtain a SOC 2 audit, and many early-stage startups may choose to start the SOC 2 process with an evaluation of the Security category only.

ISO 27001 is a set of requirements for an information security management system (ISMS) that helps keep consumer data safe by applying a risk management process to an organization’s people, processes, and IT systems. Adherence to the standard requires the creation of an information security management system, and the full standard provides a robust range of controls that an organization can utilize based on its particular needs. The ISO 27001 standard tends to be particularly compelling to businesses located outside of the United States.

8. Identify the right technology, tools, and partners to help your company manage risk

Compliance software describes the software tools your company can employ to monitor internal systems and controls, in order to ensure compliance with required standards and regulations. Compliance software can be an important component of your organization’s compliance risk management strategy — providing continuous tracking, monitoring, and tools for review of your compliance with identified relevant rules and regulations, as well as the standards and expectations of your customers. Vanta can help you develop a clear picture of what it means for your company to be secure and in compliance with the various rules and regulations that pertain to your industry — get started with the SOC 2 Compliance Checklist.

As your company builds partnerships with vendors and implements vendor management policies, vendor review processes, and a vendor assessment program as a part of its integrated compliance management strategy, you’ll be part of building and strengthening an ecosystem of trust and stringent security practices that will benefit your customers and prospects. An ecosystem of strong and secure partners — and an integrated approach to the regular review of partners’ security and compliance practices — ensures that your company can deliver on its business model.

9. Develop an integrated framework and a replicable risk-management process

Security and compliance concerns are top-of-mind for customers, companies, and regulators. Implementing a holistic, company-wide approach means taking a proactive stance, taking into account what varied customers, prospects, and regulators require of you now and in the future. This kind of proactive approach moves your company from a position of responding to increasingly frequent security concerns with one-off solutions — such as security questionnaires, time-consuming one-on-one calls with technical leaders, and numerous original documents to explain security practices — to being able to share the security standards by which your company abides, and to consistently prove and communicate your company’s security.

10. Develop training materials for employees and key partners

Once you’ve developed an integrated compliance risk strategy that involves broad company participation, you’ll want to ensure that every employee at your company is attuned to established compliance practices. This is where documentation and employee training comes into play. Training is an essential part of the compliance risk management process — just as you want all areas of your organization to be acting on the same page, you also want your employees to be operating from a shared knowledge base. Training materials should make clear for all employees what compliance looks like at your company, and what it looks like from one department to another. (See more about HIPAA employee training for an industry- and regulation-specific approach to training.) Developing effective training materials is an important step on the path of building a company culture that integrates compliance as a part of doing business, and that communicates to your whole team that the company has articulated a unified approach to compliance risk management.

In conclusion, compliance risk management is a process that involves and benefits your whole company. Developing a holistic approach to security and compliance, and a replicable risk-management process, requires investment and collaboration across your company — and this up-front work will in turn save your company time, energy, and money. Vanta can help your company get secure and compliant from top to bottom, and help you prove that security to your customers and prospects.

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PCI Compliance Selection Guide

Determine Your PCI Compliance Level

If your organization processes, stores, or transmits cardholder data, you must comply with the Payment Card Industry Data Security Standard (PCI DSS), a global mandate created by major credit card companies. Compliance is mandatory for any business that accepts credit card payments.

When establishing strategies for implementing and maintaining PCI compliance, your organization needs to understand what constitutes a Merchant or Service Provider, and whether a Self Assessment Questionnaire (SAQ) or Report on Compliance (ROC) is most applicable to your business.

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The PCI Security Standards Council has established the below criteria for Merchant and Service Provider validation. Use these descriptions to help determine the SAQ or ROC that best applies to your organization.

Good news! Vanta supports all of the following compliance levels:

SAQ A

A SAQ A is required for Merchants that do not require the physical presence of a credit card (like an eCommerce, mail, or telephone purchase). This means that the Merchant’s business has fully outsourced all cardholder data processing to PCI DSS compliant third party Service Providers, with no electronic storage, processing, or transmission of any cardholder data on the Merchant’s system or premises.

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SAQ A-EP

A SAQ A-EP is similar to a SAQ A, but is a requirement for Merchants that don't receive cardholder data, but control how cardholder data is redirected to a PCI DSS validated third-party payment processor.

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SAQ D
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A SAQ D includes over 200 requirements and covers the entirety of PCI DSS compliance. If you are a Service Provider, a SAQ D is the only SAQ you’re eligible to complete.

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ROC
Level 1 for service providers

A Report on Compliance (ROC) is an annual assessment that determines your organization’s ability to protect cardholder data. If you’re a Merchant that processes over six million transactions annually or a Service Provider that processes more than 300,000 transactions annually, your organization is responsible for both a ROC and an Attestation of Compliance (AOC).

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Learn more about how Vanta can help. You can also find information on PCI compliance levels at the PCI Security Standards Council website or by contacting your payment processing partner.

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