Compliance as a service (CaaS) is a cloud service that helps organizations meet their regulatory compliance mandates by outsourcing compliance management tasks to a third-party managed service provider (MSP). This service is particularly beneficial for large organizations operating in highly regulated industries such as healthcare, banking, and finance.
CaaS providers offer software and support materials that are designed to be compliant with specific regulations. Different industries have different compliance concerns. For example, in the healthcare industry, compliance with the Health Insurance Portability and Accountability Act (HIPAA) requires network administrators to establish logical boundaries between protected and unprotected workflows. In the finance industry, compliance with the Sarbanes-Oxley Act (SOX) necessitates specific encryption levels for different types of data. Retail organizations must comply with the Payment Card Industry Data Security Standard (PCI-DSS), which requires a business justification for accessing cardholder data. In Europe, the General Data Protection Regulation (GDPR) governs how organizations can store and use customer data.
The offerings of CaaS include assessing an organization’s current governance, risk, and compliance strategies and assisting the chief compliance officer in creating and managing policies that support best practices both on-premises and in the cloud. Transparency is crucial for CaaS providers, as customers should be able to monitor the service and ensure their data is handled in accordance with legal restrictions and corporate policies.
Despite being an emerging industry, CaaS has numerous advantages. One advantage is that compliance MSPs are responsible for maintaining and updating their cloud services over time. If there are changes to financial regulations, the provider must adjust services as per the customer’s service-level agreement (SLA). This can save large enterprises millions of dollars by reducing administrative overhead.
However, there are also disadvantages to consider when using CaaS. One significant disadvantage is that cloud service users share the risk with the provider. If a company fails to meet compliance standards, it can face severe legal and financial penalties. In the event of a financial penalty, the cloud customer, not the provider, will be fined. It is up to the cloud customer to seek remuneration from the provider.
Another challenge of using CaaS is finding the right service. Due diligence is necessary to identify a CaaS provider that offers compliance services for specific regulations, vertical industries, or countries. While many CaaS providers cover major regulations like HIPAA and SOX, it can be difficult to find providers that cater to niche industries or operate in specific regions.
In conclusion, compliance as a service (CaaS) is a cloud service that helps organizations meet regulatory compliance requirements by outsourcing compliance management tasks to third-party managed service providers. It offers advantages such as cost savings and continuous updates to comply with changing regulations. However, there are also disadvantages, including shared risk with the provider and the challenge of finding the right CaaS provider. As the industry continues to evolve, organizations must carefully consider their compliance needs and evaluate the available options before choosing a CaaS provider.