Cloud Compliance Regulations and Best Practices
June 1, 2022
5 minutes read
Cloud compliance refers to the need for organizations and cloud computing providers to comply with a set of standards and regulations established by industry guidelines, as well as local, national, and international laws. According to the compliance principle, a company can operate safely and efficiently only when it follows all the laws and requirements set out by the federal, state, and local governments.
Compliance has always been important as the consequences of compliance failures lead to regulatory fines, lawsuits, and reputational damage. Despite the relevance of this topic, there is still little understanding among companies of the existing compliance regulations, consequences of non-compliance, as well as what best practices are worth taking into account when choosing services offered by different cloud providers.
List of compliance regulations
Businesses should be compliant with many global regulations, such as HIPPA, PCI DSS, GDPR, ISO/IEC 27001, NIST, NERC, and so on. Typically, the regulations that apply to the on-premise software are also applied to the cloud-based infrastructures. However, some of the regulations relate specifically to the cloud.
The top cloud vendors earned certifications that meet global compliance requirements, including ISO 27001, PCI DSS, HIPAA, FedRAMP, etc. Note that cloud compliance isn’t only the cloud service provider’s responsibility: according to a shared responsibility model (we’ve talked about in our previous article), cloud vendors and companies work together to ensure compliance over their entire hybrid and multi-cloud network.
In order to understand, what your company dealing with, there’s a list of some general compliance requirements:
- Health Insurance Portability and Accountability Act (HIPAA) is a US federal law that protects sensitive patient health information from being revealed without the patient’s permission. The healthcare industry can benefit from the HIPAA-compliant cloud tools, as they offer cost savings and remote file sharing.
- Payment Card Industry Data Security Standard (PCI DSS) is an information security standard designed to increase the control of cardholder data to reduce credit card fraud. PCI DSS is relevant to the companies dealing with branded credit cards. Although the PCI Standard is mandated by the card brands, they are administered by the Payment Card Industry Security Standards Council (PCI SSC).
- General Data Protection Regulation (GDPR) is a regulation applied to the organizations that provide customers with goods or services in the European Union (EU). Also, GDPR rules are related to the companies that collect and analyze data tied to EU residents.
- National Institute of Standards and Technology Cybersecurity Framework (NIST CSF) is a voluntary framework that consists of best practices, standards, and guidelines helping to manage cybersecurity-related risks.
- Sarbanes–Oxley (SOX) Act of 2002 is a United States federal law that establishes certain practices for auditing, reporting, and keeping financial records for public companies and corporations.
- The North American Electric Reliability Corporation Critical Infrastructure Protection (NERC CIP) plan is a set of standards applied to regulate, monitor, and manage the cybersecurity of the Bulk Electric System (BES) in North America specifically.
- Federal Risk and Authorization Management Program (FedRAMP) provides a standardized approach to security assessment, authorizations, and monitoring for cloud service offerings. FedRAMP empowers companies to use cloud technologies, considering the security and protection of federal information, and contributes to adopting only secure cloud solutions.
- ISO/IEC 27001 is a requirement for how to establish, implement and manage information security. ISO stands for The International Organization for Standardization which is an independent, non-governmental international organization with an international membership of 163 national standard bodies.
Consequences of non-compliance
Let’s make it clear, failing a compliance audit itself isn’t that bad, and here’s why – audit emphasizes the weak spots. The most difficult part comes right after the audit when an organization has to correct the mistakes that caused the failure. It may take days, weeks, or even months to identify aspects that need improvements.
Non-compliance penalties can be harsh. Let’s take willful violations of HIPAA requirements as an example. In this case, fines can vary from $1,000 per violation and reach $50,000 per not corrected violation.
In the case of reckless violation of the Sarbanes-Oxley requirements, a CEO or CFO can be personally fined up to $1,000,000. If the violation is proven to be a willful one, the fine can go up to $5,000,000.
Don’t forget about the potential money loss due to the reputational damage, as clients and partners will hardly want to collaborate with the company breaking laws and neglecting the compliance requirements.
The most concerning issues connected to compliance ignorance are criminal sentences, not to mention potential legal consequences from the parties affected by the organization’s failure to comply.
For instance, a business executive who violates Sarbanes-Oxley (SOX) certification requirements may not only pay up to a $5,000,000 fine but also be sentenced to 20 years in prison. The thing is, it’s not the end: if your company fails in handling the customer’s sensitive data and it results in serious damage, the customer can sue the company for that.
Compliance best practices
To mitigate challenges and risks like potential compliance violations, security threats, loss of visibility, and data breaches, IT governance and compliance professionals should take into account the following steps:
Choose only trustworthy cloud providers
Top cloud vendors like Amazon Web Services, Microsoft Azure, and Google Cloud are proven to be secure and compliant, as well as experienced to keep your cloud environment safe. They may help you meet global compliance requirements such as GDPR, PCI DSS, HIPAA, and others we’ve mentioned above.
Specify the responsibilities of the company and cloud provider
According to a shared responsibility model, security and compliance responsibilities are shared between the cloud service provider (it’s responsible for the security of the cloud, and the user or a company (it bears the responsibility for the security in the cloud).
It’s essential to learn who is responsible for what exactly and articulate it while signing the contract with the cloud provider. It will help to avoid the unpleasant situations of misunderstanding and ignorance of responsibilities by both sides of the agreement.
Speaking of which, we advise you to carefully read the terms and conditions of the contracts, as 62.7% of cloud providers don’t specify that customer data is owned by the customer itself, according to Kinsta. This creates a legal gray area where a provider could claim ownership of all your uploaded data.
Assemble the right team and educate your staff
Having a solid cloud provider isn’t enough to ensure your company is compliant. It’s also important to have the right people in place. Team members that have knowledge about cybersecurity offer valuable suggestions and provide relevant insights.
Additionally, it’s recommended to organize team meetings to explain the basics of security and compliance that should be implemented in the organization. You’ll never regret spending time on that once your workers are professionals in the field of cybersecurity, and make no crucial mistakes.
Implement regular compliance and security checks
It’s better to identify the problem while it’s not too late. So, to be aware of the current security state of the cloud environment, it’s recommended to conduct compliance and security checks on a regular basis. One more suggestion is to have two teams: one is responsible for the continuous checks, and another for urgent remediating issues.
There are plenty of native tools that can facilitate your compliance teams’ work. Let’s have a look at the tools offered by each cloud provider individually, as well as take into account third-party tools.
Amazon Web Services (AWS)
- AWS Lake Formation provides a data catalog that automatically discovers and tags data across the AWS cloud environment. It helps to define and manage security and auditing policies in a more organized way.
- Amazon CloudFront is a content distribution service that offers a geo-restriction option, so users can access your content only if they’re in the whitelisted country. It’s used to avoid crossing geographical boundaries and violating compliance regulations.
- AWS Config was created to monitor the security and compliance of your AWS environment. It allows to handle the resources inventory, as well as view the configuration history, and get notifications on all the configuration-related changes.
- Azure Security and Compliance Blueprints allows Microsoft Azure services customers to create, deploy, and manage compliant environments, including for certifications like ISO:27001, PCI DSS, and others.
- Azure Security Center is used to handle security management and enable advanced threat protection across hybrid cloud workloads.
- Azure Policy was created to define and enforce policies for keeping your cloud environment compliant with internal policies and external (regional and global) regulations.
Google Cloud Platform (GCP)
Google has a Cloud Compliance Resource Center that provides the compliance documentation, security certification list, and required information to help you support your compliance.
There are lots of third-party tools in the market that help with monitoring the multi-cloud and hybrid cloud environments. Platforms like Binadox allow companies to connect various cloud accounts and manage them in one place, without switching between multiple dashboards and trying to interpret the data that is represented differently by each cloud vendor.
Moreover, Binadox can be configured to send security notifications to the team channels so that your team stayed aware of every single security threat and misconfiguration.