Data Encryption for SOC 2 Compliance: Protecting Data at Rest and in Transit

Encryption guards sensitive information stored in cloud environments, business applications, databases and endpoint devices, as well as data transmitted between systems. Cybersecurity threats continue to evolve, causing organizations to rely heavily on encryption to reduce risk, support compliance efforts and demonstrate strong data protection procedures during a SOC 2 examination. A System and Organization Controls (SOC) 2 examination attests that organizations are compliant with the criteria laid out by the Association of Certified Public Accountants (AICPA).

Key Takeaways

• • • Protect sensitive data at rest and in transit with encryption.
    • Use AES-256 to secure stored data and TLS 1.2 or 1.3 to protect data in transit.
    • Strengthen cybersecurity risk management, customer confidence and SOC 2 compliance efforts through effective encryption.
    • Pair encryption with access management, monitoring, incident response and vendor risk management.
    • Incorporate encryption as one component of a complete security program.

What Is the Difference Between Data at Rest and Data in Transit?

Data at Rest

Data at rest is information stored and not actively moving through a network. Examples include:

• • • Databases
    • Cloud storage
    • Servers
    • Hard drives and mobile devices
    • Archived backups

Encryption at rest helps protect stored information from unauthorized access, theft or exposure.

Data in Transit

Data in transit moves between applications, devices, systems or users through the internet, cloud applications or internal networks. Encryption in transit protects sensitive information from interception or unauthorized access as it travels between these locations. Some examples are:

• • • Emails sent between users
    • Files uploaded or downloaded from cloud applications
    • Video or voice communications transmitted over the internet

Why Is Data Encryption Important?

Encryption converts readable information into an unreadable format that requires the appropriate encryption key to access. If an unauthorized party obtains encrypted data, the information is much harder to view or misuse without the proper key.

Encryption reinforces security by helping organizations:

• • • Protect sensitive data
    • Decrease cybersecurity threat exposure
    • Address regulatory and contractual obligations
    • Strengthen client confidence in data privacy procedures
    • Support compliance efforts, including SOC 2 examinations

Encryption at Rest: Protecting Stored Data

AES, or the Advanced Encryption Standard, is widely used to protect stored information. AES-256, in particular, is commonly used across cloud platforms, financial institutions and enterprise applications.

Encryption-at-rest capabilities are offered by many cloud providers. However, encryption alone is not enough. Organizations should also maintain effective key management, access controls, user permissions and data retention policies.

Common examples of data that may require encryption at rest include databases, cloud storage, backups, laptops, mobile devices and file repositories.

Encryption in Transit: Securing Data in Motion

Encryption in transit protects information as it moves between systems and locations.

Transport Layer Security (TLS) commonly secures these communications. TLS 1.2 can still provide strong security when properly configured, while TLS 1.3 offers heightened security and performance.

Transport Layer Security can help organizations:

• • • Secure website traffic
    • Protect application programming interface (API) communications
    • Encrypt cloud-based transactions
    • Reduce the risk of interception
    • Validate trusted server connections

How Does Encryption Support SOC 2 Compliance?

A SOC 2 examination evaluates controls related to the Trust Services Criteria established by the American Institute of Certified Public Accountants (AICPA).

Although encryption alone does not guarantee SOC 2 compliance, it can support controls related to security, confidentiality, access control and data protection.

Encryption, combined with controls such as asset management, monitoring, incident response and vendor risk management, can play an important role in preparing for a SOC 2 examination.

What Are Common Data Encryption Mistakes?

Even organizations using encryption can have gaps in security, including:

• • • Using encryption protocols that are out of date
    • Improperly managing encryption keys
    • Forgetting to encrypt backups
    • Enforcing encryption inconsistently
    • Overlooking third-party environments
    • Validating encryption configurations irregularly

Scheduling regular security evaluations and control reviews can help identify and close these gaps.

How Boulay Can Help

Securing sensitive company and customer data requires more than technology. Organizations need a comprehensive security program aligned with their operations, customer expectations and compliance requirements.

Whether your organization is pursuing SOC 2 compliance, evaluating cybersecurity controls or upgrading its risk management program, Boulay’s Risk Advisory team can help assess current practices and identify opportunities for improvement.

To learn more about data encryption, SOC 2 examinations and cybersecurity best practices, connect with Boulay’s Risk Advisory team.