What is Cloud Compliance? Detailed Explaination

What is Cloud Compliance?

The practice of following the set agreement with regulatory standards of cloud usage per industry guidelines including local, national, and international laws is known as cloud compliance.
It is nothing more than a country having law and order. Like countries have laws; different industries need to follow different types of compliance standards to ensure the users and their data are safe and secure.

To make it more consumable; let us break them down into 3 parts.

Regulations: These are the rules set by the government or industry authorities (including but not limited to healthcare, fintech, edtech, etc) to ensure data privacy, security, and access control.
Cloud providers: They provide you with a platform (servers, storage, etc) to run your business. They are not entitled to guarantee that you are compliant with government laws and regulations.
Organization (You): You are responsible for staying in compliance by bringing the right tools and ensuring data safety.

Why is cloud compliance important?

By now, you must have understood what is cloud compliance. Let us understand why is it important.

Imagine you are navigating through a large cloud city where data is zipping around like cars and taxis. And this city does not have traffic signals, and no road signs; you will probably end up in an accident!
Compliance acts as traffic lights and rules for smooth flow and everyone’s safety - neglect them, and you will risk hefty fines, operational snags, lack of trust, and sometimes loss (financial and data). It is not about following rules, it is about building a cloud where everyone stays safe and secure. With this logic, let us help you understand why compliance matters.

Why does cloud compliance matter?

You as an organization need to understand that compliance is not just a checklist to tick box and forget. It is a continuous effort that requires commitment, proactive measures, and awareness. Here are the 5 reasons why cloud compliance matters;

Legal and financial penalties: if organizations fail to stay compliant with the rules set by regulations, they can face hefty fines and serious legal consequences. These consequences are significant enough to impact your bottom line or may even force businesses to shut down.
Reputational damage and loss of trust: Customers and partners expect the organizations they are dealing with to handle their information safely and responsibly. In case of non-compliance, it can lead organizations to erode trust, doubt business relationships, and damage reputation.
Business continuity: Compliance violations often lead to operational disruptions and restricted access to data or services. This directly impacts business continuity and productivity causing delays, employee downtime, as well as lost revenue.
Competitive advantage: Various types of industries require compliance proof to operate their businesses legally. By demonstrating compliance, businesses gain access to wider markets and opportunities and expand their potential.
Data security and privacy protection: Staying in compliance, organizations contribute to a safer digital environment and play their part in safeguarding individual privacy.

What is the difference between cloud governance and compliance?

Where cloud compliance focuses on meeting external regulatory requirements, cloud governance deals with internal oversight and management to make sure that the usage of the cloud supports the organization’s strategic objectives. We have broken down and simplified this concept for you; let us take a look at it.

Cloud Compliance

Area of operation: Cloud compliance primarily deals with external regulations, laws, and required industry standards such as HIPAA, GDPR, PCI-DSS, and others.
Concern: It ensures the organization’s cloud usage meets the legal requirements and standards relevant to the operating industry and geographic location.
Implementation: Compliance activities typically involve implementing measures to protect data privacy, security, and integrity in the cloud.
Responsibility: Compliance is often driven by regulatory departments from the organization with a goal to meet external obligations.

Cloud Governance

Area of operation: Cloud governance focuses on internal oversight and management of cloud usage of the organization.
Concern: It involves setting up policies, procedures, and controls to guide cloud adoption, usage, and management concerning business goals and objectives.
Implementation: These activities encompass defining roles and responsibilities, setting up a process for decision-making, and establishing accountability for cloud-related activities.
Responsibility: The governance of an organization is taken care of by entities like senior executives, board of directors, and IT leaders, who are also accountable for overseeing and directing cloud usage to support the organization’s strategic objectives.

Top 5 most common cloud compliance standards?

As we said in the beginning, cloud compliance standards differ based on the industry types. But, over the years we’ve observed that few cloud compliance standards are required by most of the industry types.

Here are our top 5 most common cloud compliance standards used; Including their scope, focus, and key requirements. Let us take a look at them one by one.

General Data Protection and Regulation (GDPR)

Scope: Applicable for organizations operating in the European Union (EU) or handling data of EU citizens.
Focus: Protects personal data privacy and individual rights.
Key requirements: Implementing data minimization, user consent, and strong security measures.

Payment Card Industry Data Security Standard (PCI DSS)

Scope: Mandatory for organizations accepting, transmitting, or storing credit card information.
Focus: Protecting sensitive payment card data from breaches and fraud.
Key requirements: Data encryption, strong access control, regular security assessment, and vulnerability management.

Healthcare Insurance Portability and Accountability Act (HIPAA)

Scope: Applies to healthcare organizations and their business associates handling protected health information (PHI) in the US.
Focus: Protecting patient's privacy and securing electronic health records (EHRs)
Key requirements: Implementing physical, administrative, and technical measures to protect PHI.

National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF)

Scope: This is a voluntary framework globally accepted by government agencies and private organizations.
Focus: Provides best practices for managing cybersecurity risks across five functions; Identify, Detect, Protect, Respond, and Recover.
Key requirements: Implementing risk management practices, security controls, and incident response plans.

International Organization for Standardization (ISO) 27001

Scope: Globally recognized standard for information security management system (ISMS)
Focus: Implementing a systematic approach to managing information security risks.
Key requirements: Implementing an ISMS based on risk assessment, defined security policies, and continuous improvement.

Remember that relevant standards might vary depending on the industry type and it's requirements. Consulting with your legal and compliance teams will get you the best insights and in return best results concerning your business goal.