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What is Compliance-as-a-Service (CaaS)?

  • Ashesh Anand
  • Jan 16, 2023
What is Compliance-as-a-Service (CaaS)? title banner

Businesses today manage a lot of electronic client data, including payment information and email addresses. Many of these sensitive pieces of information have the potential to hurt your company and your clients if they get into the wrong hands. 

 

The Health Insurance Portability and Accountability Act (HIPAA) in the healthcare sector and various tax reporting requirements are just a few of the privacy and security rules the government has devised for the digital age to safeguard consumers. 

 

Despite the fact that regulations differ depending on the industry, compliance is crucial for providing excellent customer service and shielding your company from financial and legal problems. Even though most organizations work to abide by all applicable regulations and best practices, certain small and medium-sized enterprises may not keep up with technological advancements, making it challenging for even the most diligent teams to manage current trends and cybersecurity concerns. 

 

With more data breaches in the first three months of 2021 than in the entire year of 2020, data breaches are rapidly nearing a new record high. Many companies have started seeking solutions to assist them to maintain regulatory compliance as worries about the privacy of customer data continue to rise. One well-liked remedy is known as Compliance as a Service (CaaS).

 

Also Read | A Gentle Introduction to Everything-as-a-Service (XaaS)


 

What is Compliance as a Service, exactly?

 

The HIPAA Rules provide baseline requirements for security and privacy, specify the transaction and code sets that must be used, specify how data breaches must be reported, and describe the rights that patients and health plan subscribers have about their medical information.

 

While each of these requirements is fully explained in the 115 pages that make up the combined HIPAA text, the language is frequently difficult to understand, some provisions are open to interpretation, the security measures that must be put in place can differ greatly from one organization to the next, and HIPAA does not come with a user's guide.

 

Therefore, ensuring compliance with all HIPAA requirements can be a time-consuming, labor-intensive, expensive, and challenging process. It is not surprising that many healthcare organizations and vendors seek assistance from compliance as a service given the high penalties for even unintentional violations of HIPAA Rules.

 

Simply said, third-party compliance professionals that offer compliance as a service will make sure you are fully compliant with specific legislation. This service may be provided in accordance with a single set of laws, such as HIPAA, FERPA, CCPA, or Sarbanes-Oxley, or with a mix of state and federal laws.

 

This service is provided by a lot of cloud service companies. Cloud service providers provide a platform or service that has already been set up to assure compliance. By offering a platform or service that complies with regulatory requirements, they essentially remove the complexity from compliance.

 

The service does not ensure compliance in any scenario. Regulations can still be broken, and there will still be an effort to be done to attain and maintain compliance. These services merely lighten the load of compliance by doing most of the work for you, requiring you to exert less effort. You will ultimately be solely responsible for achieving and upholding compliance. You will be punished if you don't pass a compliance audit, not the service provider, even if there are some situations when you might have a case against them.

 

Also Read | What is Quantum Computing -as -a -service?


Features of CaaS

Features of CaaS



 

How does a proposal for compliance as a service operate?

 

Finding strategic clients with the financial wherewithal to spend more on their contracts for these services is the first step in a CaaS initiative. The compliance officer must comprehend the risks, expectations, and compliance needs of these clients in order to determine whether the internal performance of these tasks is possible or whether CaaS initiatives are necessary. 

 

The compliance officer then provides a list of services, success stories, growth data, and already-established procedures to bolster their sales pitch. By agreeing to a higher volume of transactions, this plan seeks to increase efficiency, create economies of scale, and achieve standardization.

 

The compliance officer provides the customer with specific examples of deliverables and dashboards after developing the proposal. It is crucial that the language of compliance clauses be particularly exact both during negotiations and the writing of the contracts so that the transfer of duties is crystal obvious. 

 

To reduce disputes, a list of clearly specified compliance tests with opportunities and attributes should be included in the contract. Finally, in addition to explaining the essential controls to the client, the compliance officer must also do so internally with the staff members who will be affected by the contract.

 

Controls carried out on behalf of the client during the execution of a CaaS contract must be properly structured and documented. The client, compliance officer, and contract managers should also meet on a regular basis to discuss metrics, exceptions, and trends related to control compliance. As with any contract, keeping levels of cooperation and confidence strong requires quick disclosure to the client of any potential risks of non-compliance.

 

A crucial effort that is frequently left off the compliance agenda is compliance-as-a-service. The following year will be crucial for preserving profitability and focusing support activities on outside sales.

 

 

The approaches to combat privacy issues through CaaS:

 

Two primary strategies dominate the market:

 

  1. Coaching: The major organizations use a coaching technique, in which individuals are trained and made internalized the activity after initially being accompanied by a team of specialists and learning competencies.

 

  1. Complete outsourcing: Smaller businesses prefer to totally outsource compliance (with a few exceptions), forging a strong bond of trust with the advisor firm in the process.


 

Roles in the CaaS:

 

  1. Data Protection Officer: 

 

The EU-GDPR article.37 outlines the circumstances in which a firm must appoint a DPO. This individual is responsible for ensuring that the EU-protection GDPR of personal data is being followed.

 

With the implementation of the EU-GDPR in 2018, the DPO function is undoubtedly the most well-known and prevalent in the CaaS industry.


 

  1. Chief Information Security Officer: 

 

A C-Level executive in charge of information security is known as the CISO. This individual oversees the creation and execution of policies and procedures, oversees security technologies, and supervises incident response while keeping business objectives in mind.

 

A CISO's primary objective is to transform the perception of information security from a technical issue to a strategic imperative.


 

  1. A risk manager: 

 

Compliance is approached through risk management. The risk manager is in charge of identifying the risks across the entire organization of the business or in a specific area. These concerns include security, financial, and other types of risks. 

 

To determine the level of risk the organization is willing to tolerate, the risk management plans and implements a risk management process (risk assessment, treatment, acceptance, and communication).


 

  1. Internal Auditor: 

 

Internal audits are "independent objective assurance and consulting activities meant to add value and enhance an organization's operations," according to the Institute of Internal Auditors (IIA). 

 

Applying a systematic, disciplined approach to review and enhance the efficacy of risk management, control, and governance procedures, it aids a company in achieving its goals.


 

  1. Management System Manager: 

 

The adoption of a Management System is required by numerous ISO standards (such as ISO 9001, ISO 27001, ISO 22301, etc.). An MS, according to ISO, is "how an organization manages the linked aspects of its business to accomplish its goal." 

 

Establishing a framework to install and administer the MS by relevant standards is the responsibility of an MS Manager.

 

Also Read | What is FaaS? Working, Principles, and Advantages


 

Advantages and Disadvantages of Compliance as a Service:

 

After migrating to a CaaS solution for data storage and compliance management, many firms experience gains. CaaS providers can assist you in adhering to the law while saving you the time and money often required to maintain compliance in sectors with strict regulations. The following are some benefits of compliance as a service:

 

  1. Minimal in-house compliance work: Without the assistance of a CaaS provider, many organizations waste a lot of time investigating legislative changes, handling data security, and putting together documents for regulatory bodies. This task can be reduced with the use of CaaS.


 

  1. Simplified administrative procedures: Businesses frequently receive more services from CaaS providers than just data storage. Additionally, they provide you with tools and resources you may employ to streamline your administrative procedures and keep security.


 

  1. Automatic system updates: CaaS eliminates the hassle of updating your system each time business regulations change. Normally, your service provider will immediately update its cloud-based services.


 

CaaS systems have the potential to be advantageous to enterprises of all sizes in a variety of industries because they are customizable platforms. Although these services have a lot to offer, they also have drawbacks:

 

  1. Loss of control: When you choose to employ compliance as a service (CaaS) for your company, you give up some of your control over your data's security. You won't be able to directly control how the data is kept or protected. If you decide to part ways with your provider, be sure to find out how your data will be returned to you.


 

  1. There is a chance for breaches, even though cloud CaaS providers are well-equipped to safeguard customer data from security risks. You'll still be in charge of reporting sensitive data theft from a CaaS provider.


 

  1. Distancing yourself from your obligations: One risk of CaaS that is frequently disregarded is the possibility of unintentional non-compliance when contracting out work to a third party. By continuing to maintain your company's compliance by carefully utilizing the tools your service provider provides, you can fight forgetfulness and carelessness.

 

Also Read | Top 10 Software as a Service (SaaS) companies of 2022


 

End Note: What to Take Into Account When Selecting a CaaS Provider?

 

The decision to seek CaaS for your company may offer you and your employees financial advantages and relief. Finding a service provider you can rely on to uphold compliance and protect your data is important because CaaS providers handle sensitive information about your company and your clients.

 

Even if some businesses provide "one-size-fits-all" cloud CaaS solutions, it's crucial to look for a provider that can accommodate your organization's particular requirements, particularly if you work in a specialized sector like banking or healthcare.

 

Consider the following inquiries while you browse the range of available choices:

 

  • Does this service provider know my sector? Select a CaaS service provider that provides solutions that are suited to your industry. A reputable provider will give you tools that are made to function with the particular regulations you need to follow. Ask the service provider how they adapt their offering to changing legislation and ask for recommendations from other companies in your sector.

 

  • Am I aware of how this Compliance functions in my capacity as a service provider? Before selecting a service, learn precisely how the company operates. Make sure you are aware of the location of data storage, the security measures taken by servers, the services they offer, and the ones they do not. The foundation of a solid relationship is complete openness.

 

  • Can this CaaS solution be customized to my company's needs? Your CaaS provider should be able to adapt solutions to your organization's particular demands in addition to meeting the compliance standards of your sector. Their data reporting and storage should be in line with your objectives and worries.

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