The Long-Term ROI of SOC 2 Compliance

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Companies that pursue a Services Organization Control 2 Type I certification usually fall into two categories: those that want to attain certification early as a competitive differentiation and those that seek it out because an important customer or prospect has asked them to. Both are valuable reasons to achieve SOC 2 Type 1 certification and have something in common: short-term benefit, whether that’s increased brand awareness, faster customer acquisition, and enhanced customer trust.

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At Koop we appreciate all benefits of robust security and compliance automation. It’s easy, though, to see SOC 2 certification only as a means to securing the next customer. In fact the long-term ROI of SOC 2 compliance  dwarfs any short-term gains. Most of this ROI comes from reduced risk of data breaches, lower business insurance premiums, and increased operational efficiency.

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De-risking Data Breaches

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Data breaches can easily become a seven-figure problem for affected businesses, especially when they’re not complying with common security standards. In 2023 data breaches cost non-SOC 2 compliant organizations $5.05M per beach, according to IBM. That’s over half a million dollars more than the average cost for compliant organizations that faced a cyber attack. That means a $10,000 investment in SOC 2 automation could easily yield 50x ROI in the form of cost savings for companies that experience a data breach.

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Automating SOC 2 compliance doesn’t just save companies money on the cost of data breaches; it makes them significantly less likely to happen. Consider that phishing and stolen credentials together made up over 30% of 2023’s data breaches. SOC 2 certification assesses and encourages companies to install security controls that mitigate these risk vectors. For example, multi-factor password authentication is a commonly implemented SOC 2 control that effectively means would-be attackers would need both your employees’ passwords and their devices to cause an adverse incident.

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Consolidating Insurance Costs

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SOC 2 Type I compliance not only boosts trust with customers; it also reassures insurers of your robust security posture which usually leads to less expensive business insurance premiums.

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Companies with SOC 2 compliance may be overpaying for their insurance premiums. This is primarily because traditional insurance models often fail to recognize the reduced risk profile of businesses that have invested in comprehensive security measures like those required for SOC 2 compliance.

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Executing Efficiently

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The process of becoming SOC 2 compliant can lead to significant improvements in a company's internal controls and operational procedures. It encourages organizations to assess and improve their policies, communications, procedures, and monitoring around security, availability, processing integrity, confidentiality, and privacy. These improvements can lead to more efficient operations, better risk management, and reduced errors or incidents.

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Koop’s customer assurance platform helps tech companies seamlessly navigate the complexities of business insurance, regulatory compliance, and security automation in one place.

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‍We provide a comprehensive suite of insurance coverage that includes General Liability, Technology Errors & Omissions, Cyber Liability, and Management Liability coupled with the most cost-effective SOC 2 compliance certification on the market.

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‍Ready to learn more? Visit our website at https://www.koop.ai or drop us a note at hello@koop.ai.