The Importance of Compliance Assessment
Explore the significance of compliance assessment, including its triggers, challenges, and essential components
Imagine a healthcare company migrating its workloads to the cloud, an e-commerce platform expanding its operations abroad, or a start-up that fall victim to a massive data breach with thousands of customer’s data exposed. What do all of them have in common? They all experienced a significant trigger event that required a thorough assessment of compliance with regulatory requirements and cybersecurity standards, be it HIPAA, PCI DSS, GDPR, ISO 27001, or any other.
Specific trigger events such as adopting new technologies, contractual obligations, data incidents, or regulatory updates require a compliance assessment to ensure that under the new circumstances, businesses continue meeting applicable regulatory requirements and cybersecurity standards. Based on the assessment findings, the companies then adjust security controls to align with regulatory requirements and cybersecurity best practices.
However, it often occurs that organizations have more questions than answers when assessing their compliance. Some of the most frequently asked questions are:
- What is a compliance assessment?
- Why is the compliance assessment important?
- When to conduct the compliance assessment?
- Why the compliance assessment should become an ongoing routine?
These and other questions regarding the compliance assessment are covered in this article.
What is a Compliance Assessment
Compliance assessment is the process of evaluating an organization’s people, processes, and technologies to ensure they comply with applicable laws, regulations, and industry standards and can respond to environmental and operational changes affecting the security of your data and processes. The whole compliance assessment process is built on identifying the relevant regulations and standards applicable to the organization, such as PCI DSS, the Health Insurance Portability and Accountability Act (HIPAA), the General Data Protection Regulation (GDPR), or any other requirements based on the organization’s profile. The assessments are usually performed by compliance and security professionals familiar with the specific compliance requirements.
Compliance assessment is essential for organizations as it helps identify and mitigate risks, safeguard sensitive data, and protect against legal and financial consequences of non-compliance. By conducting regular compliance assessments, organizations can demonstrate their commitment, enhance trust with stakeholders, and mitigate the potential impact of security breaches or regulatory violations. Finally, compliance assessments help promote a culture of accountability and continuous improvement, enabling organizations to adapt to evolving regulatory landscapes and emerging threats effectively.
HIPAA compliance assessment
If you are operating in healthcare, you are probably familiar with a HIPAA compliance evaluation to ensure you maintain all necessary security policies, procedures, and technical safeguards reasonably and appropriately. HIPAA evaluation is not an additional recommendation or best practice to implement, but a requirement. As it is stated in the HIPAA Security Rule, the Evaluation Standard requires covered entities to: “Perform a periodic technical and non-technical evaluation in response to environmental or operational changes affecting the security of ePHI. Evaluation establishes the extent to which an entity’s security policies and procedures meet the requirements of the Security Rule.” A nice bonus of the HIPAA compliance evaluation is gaining an understanding of the current status of the covered entity’s operations and environment which raises confidence that the security of the e-PHI is not compromised.
PCI DSS compliance assessment
Organizations working with payment transactions must assess their compliance with PCI DSS. PCI DSS requirement 3.6. requires continuous monitoring of security controls to assess risks related to PCI DSS compliance. It states that: The fundamental step in building a continuous monitoring strategy is to develop processes for performing periodic reviews of all relevant security controls. PCI provisions the periodic compliance assessment process must be aligned with the organization’s business and security, cover all in-scope facilities and locations, consider any changes within the organization, and operating environment, and provide sufficient evidence to illustrate continued adherence to security requirements.
How Often Should the Compliance Assessment be Conducted
The frequency of compliance assessments may differ depending on factors such as the organization’s size, the industry in which it operates, and the relevant regulations. Nevertheless, conducting assessments annually or as mandated by the regulations is considered optimal. For example, the recommended frequency for HIPAA or PCI DSS compliance assessment is at least once a year. At any rate, it is crucial to periodically review the assessment frequency to maintain continuous compliance and manage changes to the environmental regulatory modifications effectively.
Aside from cyclical assessments, there are a number of events that may trigger an off-cycle compliance evaluation, including:
Specific events
Compliance assessments may be triggered by specific events such as changes in regulations. For example, PCI DSS 4.0. Updates added new control requirements such as stricter authentication and password, extended risk assessment, and new encryption demands, and organizations needed to reevaluate their PCI DSS compliance to see what controls were missing. Some of the other specific trigger events may include organizational restructuring, mergers or acquisitions, or significant technology upgrades.
New technologies
Before implementing new technologies, systems, or processes, organizations should conduct compliance assessments to ensure they meet regulatory requirements and cybersecurity standards. For example, compliance assessment is a must when moving your workloads to the cloud or changing a cloud provider. Different cloud providers may have varying levels of compliance with regulatory standards such as GDPR, HIPAA, or PCI DSS. Compliance assessments ensure that the chosen cloud environment meets or can be configured to meet the necessary regulatory requirements for handling sensitive data. Read more about this in one of our blog posts Cloud Security and Cmpliance.
Policy Updates
Whenever there are updates to organizational policies or procedures it’s important to conduct compliance assessments to ensure alignment with the new requirements. Imagine you implement a BYOD policy. Then you need to address access controls, audit logs, and other things related to mobile device security. Such policy update indisputably requires a thorough compliance assessment.
Contractual Obligations
Organizations may be required to conduct compliance assessments as part of contractual agreements with clients, partners, or vendors. For example, a company providing IT services to a healthcare organization may be required to adhere to the Health Insurance Portability and Accountability Act (HIPAA) regulations. As part of the Business Associate Agreement (BAA) between a covered entity and a business associate, the healthcare organization may require that the IT service provider undergo regular compliance evaluations to ensure HIPAA compliance.
Ultimately, the frequency of cybersecurity compliance assessments should be determined by the organization’s risk tolerance, regulatory requirements, and the dynamic nature of the technology and business landscape.
Key Challenges in Compliance Assessment
Compliance assessment can be a complex process. Let’s see what are the key challenges that companies face when assessing their compliance:
Regulatory complexity
The regulatory landscape is constantly evolving, making it difficult to stay updated on all relevant laws and regulations. The issue is especially sharp in heavily regulated industries such as healthcare or finances. In addition, regulatory changes and updates are a common practice, and organizations must adapt quickly to be ready to reassess their risk when necessary. For example, PCI DSS 4.0 Updates that came into effect on March 31, 2024, proposed many modified and completely new requirements, including straightened risk assessment and access controls requirements that the covered organization must be ready to address to remain compliant.
Diverse stakeholders and third-party vendors
Different departments, stakeholders, and third-party vendors might have varying compliance priorities and perspectives. Imagine a multinational corporation that operates in various regions, each with its own set of compliance requirements. The company relies on several third-party vendors located in different countries to provide essential services such as IT support, marketing, and logistics. In this scenario, the IT department may prioritize compliance with data protection regulations such as GDPR in Europe, while the marketing department focuses on adherence to advertising standards specific to each region. Additionally, vendors operating in regions with strict financial regulations may have different compliance priorities compared to those in less regulated areas. Aligning all the regulations and requirements can be challenging, especially in larger organizations.
Documentation and Reporting
Maintaining comprehensive documentation and reporting of the compliance assessment process and outcomes is crucial for demonstrating due diligence. However, documentation can be time-consuming and might not be a top priority for some teams.
Resource constraints
Performing thorough compliance assessments requires time, expertise, and resources. Think of a startup company in healthcare that is subject to HIPAA. Conducting a thorough compliance assessment to ensure adherence to HIPAA regulations and safeguard patient data is a must. However, the company operates with a limited budget and a small team, making it difficult to allocate sufficient resources to the compliance assessment process. Additionally, team members may lack specialized knowledge of healthcare regulations and risk management techniques required for conducting thorough assessments.
Lack of expertise
Industry expertise is required to determine specific processes and controls that have to be implemented to meet those requirements. Organizations often lack this expertise which makes overall compliance a challenging task. For example, cloud migration adds a layer of security and compliance complexity. With cloud data storage, you must remain aware of what data is in the cloud, what laws regulate that data, and how best to implement real-time protections.
The Compliance Assessment is a Continuous Process
Commonly, the organization’s compliance assessment includes three main components: initial assessment, ongoing assessment, and periodic assessment. Each of these components validates if the organization conducts its operations in a compliant and secure environment according to applicable laws and regulations.
The initial compliance assessment
The initial assessment involves reviewing policies, procedures, and technological safeguards the organization already has to satisfy the requirements of particular laws and regulations. Hence, by conducting a thorough review of operations and assessing areas responsible for maintaining compliance processes and controls, organizations evaluate their compliance and create a baseline for future assessments.
Ongoing compliance monitoring
Ongoing assessment for compliance maintenance is the second important activity in which organizations must assign authorized individuals to critical processes associated with technological and operational changes. Individuals accountable for the ongoing compliance monitoring should be key players in the organization’s change management processes.
Ongoing compliance monitoring allows performing systematic reviews of changes that affect compliance. These may include any technical (hardware, software, media), environmental (physical location, facilities), or operational (people, processes) changes. For instance, to respond to ongoing technological demands and increase business efficiency, businesses often decide to incorporate new technologies into their operations.
Periodic compliance assessment
Finally, in addition to the previous components, organizations should complete periodic compliance assessments regularly. Such assessments ensure that any changes in the organizational environment since the last assessment do not compromise regulatory compliance. The changes that may occur within the organization may be technical and non-technical as they relate to technological and physical environments as well as business operations. As we already mentioned, periodic assessments utilize the baseline information and evaluate all changes that may have affected the organization’s security.
How Planet 9 Can Support Compliance Assessment
Compliance assessment may be performed either internally or using external help. Covered entities are free to decide which option is more suitable based on their resources and operational capacity. Planet 9 offers compliance assessment services that are based on years of expertise experience and deep knowledge of cybersecurity laws and regulations in this area.
Contact Planet 9 to learn more about the cloud risk assessment.
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