The SEC is cracking down on SaaS security, holding public companies accountable for protecting data stored in SaaS systems and connected third-party apps. This shift reflects growing concerns about vulnerabilities in SaaS platforms and the potential impact on investors.
Why is the SEC Focusing on SaaS?
- High Prevalence of Breaches: Despite companies feeling confident in their SaaS security, incidents are common. Industry reporting shows that a high percentage of organizations experienced a SaaS breach in the past year.
- Data Leak Risks: The ubiquity of SaaS and the use of SaaS-to-SaaS connections create complex digital ecosystems with hidden vulnerabilities.
- Investor Protection: Breaches can affect market confidence and investor decisions. The SEC aims to ensure fair and transparent markets by holding companies accountable for their cybersecurity practices.
What are the New Regulations?
- Disclosure Requirements: Companies must disclose material cybersecurity incidents within four days and provide annual reports on their cybersecurity risk management, strategy, and governance.
- Prevention Measures: CISOs must describe their processes for assessing and managing cybersecurity risks, including those related to SaaS and SaaS-to-SaaS connections.
What Does This Mean to Your Organization?
- Improved Security Posture: These regulations are forcing companies to take SaaS security seriously. This benefits everyone by reducing the risk of data breaches.
- Increased Transparency: Investors will have more information about companies’ cybersecurity practices, leading to better decision-making.
- Proactive Cyber Security Approach: The focus on prevention encourages companies to adopt a proactive cybersecurity culture.
How Can You Be in Compliance?
- SaaS Security Posture Management (SSPM) Tools: These tools help you assess and manage the risk of SaaS systems and connections, providing valuable insights for compliance and improving overall security.
- Comprehensive Inventory: Create a complete inventory of all SaaS-to-SaaS connections, including the data they access, and permissions granted.
- Continuous monitoring: Monitor configurations, permissions, and activity logs to identify and address potential threats promptly.
What You Need to Do:
- Understand your SaaS landscape: Identify all SaaS applications and connected tools, including shadow IT.
- Assess SaaS security risks: Utilize SSPM or similar tools to evaluate configurations, permissions, and vulnerabilities.
- Implement preventive measures: Establish clear security policies, monitor activity, and address identified risks promptly.
- Prepare for disclosure: Be ready to accurately report material cybersecurity incidents within the mandated period.
Conclusion: While the SEC regulations may seem daunting, they represent a positive step towards enhancing data security and protecting investors. By proactively addressing SaaS security risks, companies can minimize the impact of breaches and build trust with stakeholders.
These regulations are not just about compliance; they are about protecting your organization, your data, and your investors. By taking proactive steps to secure your SaaS environment, you can build a more resilient and trustworthy organization.
Modevity Commercial Intelligence Service supports organizations by mitigating varied company and regulatory risks and utilizes powerful database technology, AI, and vendor assessment automation with continuous monitoring – to provide real-time reports for the identification of risks when conducting business with vendors across varied departments or operations.
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Thomas J Canova
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