A Quick Overview of Compliance Framework

We’ve all been there—trying to manage multiple business challenges at once without a proper roadmap. Keeping up with industry and state regulation is a necessary hurdle to success. Thankfully, compliance frameworks, like a pre-packed solution; help you put pieces of the regulatory challenge together.  

In this article, we understand what a compliance framework is, the key elements, and how to implement it. 

What is a compliance framework?

Compliance framework refers to a set of structured guidelines, controls, and practices that ensure organizations manage their systems and processes to meet regulations, industry standards, and business objectives.

Why are compliance frameworks important for an organization?

Compliance management frameworks provide a systematic approach to navigating regulatory requirements and integrating them with organisational goals. The frameworks provide a starting ground for identifying existing risks and foster a culture of continuous improvement.

Compliance frameworks are important to:

• Identify gaps in the security posture to reduce incidents, ensure business continuity, 
• and stay compliant to applicable compliance frameworks. 
• Keep track of new technologies added to the system, changes to existing systems, and issues and document it.
• Strategically deploy human and capital resources to improve efficiency. 
• Boost operational efficiency by using a holistic approach that combines process, people, and technology. 

4 key elements of a compliance framework

Key elements of a successful compliance framework interconnects policies, processes, people, systems, resources, and training programs to meet the necessary requirements. Compliance management framework is not a one-size-fits all kinda deal—it should be tailored keeping factors like type of data, industry regulatory requirements, budget, and more in mind. 

Here are the four key elements of a compliance framework:

Compliance Policy

A compliance policy outlines key objectives, goals, and approach you want to implement to meet the obligations of a framework. Compliance policies help establish adherence benchmarks, serve as a guiding tool for implementation and set a culture of security and accountability.

Typically, a compliance policy should address the following: 

• Roles and responsibilities: Employees are assigned activities along with an expected delivery date.
• Governing requirements: The clause or subclause of the regulation applicable for each activity.
• Standard Operating Procedures (SOPs) for implementation: A set of processes to identify new compliance requirements, implement relevant technology to meet those obligations, and monitor the incorporated controls.
• Monitoring and reporting mechanisms: Methods to continuously audit and evaluate the effectiveness of compliance activities.
• Management reviews: A set frequency for management oversights and review of progress
• Communication of updates: Process and frequency for policy revisions and communication channels for notifying the updates

Sprinto has built-in compliance policy templates that can be tailored as per organization’s needs. The platform also enables you to centrally manage all policy acknowledgements and sends alerts for any pending approvals.

Compliance Plan

While a compliance policy sets the tone of framework implementation, a compliance plan is a more comprehensive and structured blueprint. The plan addresses the risks associated with each compliance area, resources and budgeting, training plans, documentation strategies and more.

A compliance plan talks about:

• The type, complexity, and objectives of the controls. 
• How achievable are your control metrics and how well they align with the policy and processes. 
• If there is a clear alignment between the selected controls and framework requirements. 

A good practice to ensure timely delivery and visualization of the plan ahead is to use a compliance calendar. This helps all concerned parties understand their tasks, framework requirements, internal dependencies, and external dependencies better.

If you are stuck with planning your compliance budget – here is the complete guide

Compliance automation

Compliance automation is the use of technological solutions to streamline compliance processes.
Bringing spreadsheets, calendars, and task-based accountability together is not easy but works for some organizations. Most, however, find it challenging to execute everything flawlessly. At this point, many consider compliance automation solutions to manage processes and reduce manual efforts. 

Compliance automation tools like Sprinto help with:

• Regulatory mapping: Automated tools map regulatory requirements and relevant controls for businesses to easily identify compliance gaps
• Integrated risk assessments: The tools automate the process of identifying and evaluating risks as well as initiating corrective actions
• Streamlined workflows: Compliance automation tools reduce administrative overheads by automating repetitive tasks
• Policy Management: These tools enable centralized creation, distribution and tracking of policies.
• Training: Tools like Sprinto have in-built training modules to raise employee awareness
• Continuous monitoring: These tools help establish a continuous monitoring mechanism and track compliance activities in real-time

Also check out: Compliance automation tools

Independent audit

Independent Audits review your controls against the requirements of the framework policy. It helps the management understand where the minor gaps or major non-compliance lies so that it can be fixed to avoid legal issues and ensure business continuity.

Generally, audits are performed by independent bodies to leave no room for a biased review. Once complete, the auditor will provide you with a detailed report on gaps, suggest corrective actions, and compile other useful observations. 

Depending on the industry, number of controls, and nature of organization, it may take months to prepare for an audit. For example, the audit process for SOC 2 differs in many aspects from the ISO 27001 auditing process. 

Sprinto has an independent auditor dashboard to make it easy to collaborate with a network of Sprinto approved auditors. It also captures and presents evidence in an audit-friendly manner to expedite the certification process.

Must check out: List of Compliance audit software

List of compliance frameworks

Compliance framework applicability is industry specific and one business may be subject to multiple regulations. While there are several compliance frameworks that exist, here is a compliance framework list that you must be aware of:

Service Organizations Control or SOC 2

Systems and Organization Controls or SOC 2 is a report that evaluates the design and operating effectiveness of an organization’s controls based on five trust criteria. The criteria are established and maintained by American Institute of Public Accountants (AICPA) and  include security, availability, processing integrity, and confidentiality. While security is a compulsory criteria,  the others are applicable based on the industry or type of data processed. 

The 5 Trust criteria for SOC 2:

Security: It ensures that the information assets are protected from unauthorized access.

Availability: Availability criteria ensures that the systems are up and running to make the required information accessible to the right users.

Processing integrity: This criteria validates the accuracy and completeness of information

Confidentiality: Confidentiality criteria ensures that sensitive information is protected against disclosure and from unauthorized users.

Privacy: Privacy criteria caters to personal information and ensures that it is protected and properly disposed of.

SOC 2 applicability: It is applicable to cloud hosted companies that process, manage, and transmit customer data. SOC 2 is not a compulsory but voluntary compliance program that helps service organizations demonstrate trust. 

Types of SOC 2 reports: There are two types of SOC 2 reports: Type 1 and type 2. SOC 2 TYpe 1 evaluates the design of controls at a point in time while SOC 2 is a more comprehensive and insightful report that evaluates eddectiveness of internal controls for 3-6 months. If you are embarking your SOC 2 journey, you must start with SOC 2 Type 1 and then move to Type 2.

Health Insurance Portability and Accountability Act (HIPAA)

The Health Insurance Portability and Accountability Act of 1996 standardizes the flow of information in healthcare and protects sensitive patient health care information (PHI). HIPAA is a federal law that applies to any individual or service in the US who meet the definition of Covered Entity (CE) or Business Associate (BA). 

Covered entities and business associates: Covered entities include healthcare providers, health plans and healthcare clearinghouses that directly deal with PHI or ePHI (electronic PHI). Business associates are third-party service organizations, contractors etc. that handle ePHI on behalf of covered entities.

HIPAA rules: HIPAA consists of various rules that govern the use and disclosure of PHI and grants certain rights to individuals regarding their personal information. Major HIPAA rules include privacy, rule, security rule, enforcement rule, omnibus rule and breach notification rule. 

Enforcement: HIPAA is enforced by the Office for Civil Rights (OCR) under the Department of Health and Human Services (HHS) in the U.S.

Certification: There is no formal certification for this regulation, but if you fail to comply, civil and criminal penalties can be levied against you. 

General Data Protection Regulation (GDPR)

The General Data Protection Regulation is probably the most difficult and comprehensive regulation. It applies to any business that processes personal data of individuals in the European Union (EU) or European Economic Area (EEA).

10 key requirements: GDPR comprises of 10 key requirements including

• Lawfulness, fairness and transparency: There must be a legal basis for data collection and usage.
• Purpose limitation: The purpose of data collection must be legitimate and there must be clarity of intent.
• Data minimization: The data collected must be adequate for intended purpose and any unnecessary information must not be collected.
• Accuracy: The collected data must be error-free and serve as a single source of truth.
• Storage limitation: Organizations must have data retention policies in place and the data must be deleted or anonymized after the specified time.
• Integrity and confidentiality: The collected must be protected against unauthorized access or any compromise by way of modification, tampering etc.
• Accountability: Organizations must take ownership for protecting collected data and maintain records of any processing activities
• Rights of data subject: Individuals have certain rights such as the right to access data, right to object processing of data etc.
• Data breach notification: Data breaches must be notified to the relevant authority not later than 72 hours of the incident.
• International data transfers: International data transfers are subject to ‘adequacy’ decisions.

You can get GDPR certified by an accredited body to demonstrate compliance. 

Payment Card Industry Data Security Standard (PCI DSS)

The Payment Card Industry Data Security Standard is applicable to merchants that accept, store or process customer payments through credit or debit card. Its goal is to prevent card related fraud using a set of recommended baseline security measures. 

PCI SSC: The Payment Card Industry Security Standards Council (PCI SSC) is the regulating body responsible for developing and maintaining PCI standards. It is established by major credit card companies including American Express, Visa, Mastercard, Discover and JCB.

PCI DSS levels: There are 4 PCI DSS compliance levels based on transaction volume.

• Level 1: Merchants processing over 6 million transactions annually.
• Level 2: Merchants processing 1 million to 6 million transactions per year.
• Level 3: Merchants processing 20000 to 1 million transaction on an annual basis
• Level 4: Merchants processing fewer than 20000 transactions per year.

PCI DSS requirements: There are 12 PCI requirements that every vendor, irrespective of the number of transactions they process, must implement. If you fail to comply, lawsuits and heavy penalties may apply against your business. These 12 requirements are:

• Installing and maintaining a firewall
• Not using default or vendor supplied security parameters
• Protecting cardholder data
• Encrypting cardholder data
• Installing and updating antivirus regularly
• Developing and maintaining secure applications
• Blocking access to cardholder data
• Assigning unique identification 
• Blocking physical access to cardholder data
• Tracking and monitoring cardholder data and network resources
• Testing all security systems and processes
• Maintaining information security policy

International Organization for Standardization (ISO) 27001

ISO 27001 provides guidelines and best practices around which organizations can effectively manage, improve, and create their Information Management Security System (ISMS). It is published by the International Organization for Standardization and helps demonstrate sufficient measures and controls to identify, detect, and mitigate risks to information systems.

The latest version of ISO 27001 is ISO 27001:2022 and has 93 controls with 11 new control additions and certain mergers of controls. The previous version which was the 2013 version had 114 controls divided into 14 categories.

Broadly, ISO 27001 requires organizations to

• Define the scope of ISMS
• Identify existing gaps in control implementation
• Establish management commitment to building a strong ISMS
• Conducting risk assessments and implementing risk treatment plan
• Monitoring the performance of ISMS and ensuring ongoing improvement.

National Institute of Standards and Technology (NIST)

The NIST framework is developed by the U.S. Department of Commerce that promote industrial innovation and competitiveness. NIST has developed a Cybersecurity Framework (NIST CSF) to help businesses manage their cybersecurity risks.

Key Components of NIST CSF:

Core functions: According to NIST CSF, 5 core functions constitute every cybersecurity program:

• Identify: Understanding the assets and data in the environment
• Protect: Implementing controls to safeguard critical assets
• Detect: Continuously detecting any cybersecurity events 
• Respond: Developing a response mechanism for security incidents including containment, communication etc.
• Recover: Restoring services to normal business operations.

Implementation tiers: The implementation tiers range from tier 1 to tier 4 depending on the security maturity of the organization.

Profile: Framework profile assists organizations in creating current and desired profiles and working towards risk-based improvement.

California Consumer Protection Act (CCPA)

CCPA is a privacy law that protects the personal data of California customers and grants them certain rights to know what kind of information is being collected and even opt-out. Businesses under the purview of CCPA must implement appropriate security measures to protect personal information from unauthorized access or tampering.

Applicability CCPA applies if businesses match any of the following criteria:

• Revenue threshold: Annual gross revenue is $25 million or more
• Data collection: If the business buys, sells or receives data from a minimum of 50000 California residents, households or devices annually.
• Business type: If 50% of business revenue comes from selling personal information.

Sprinto caters to all the above frameworks and more (15+). The platform helps you scope out compliance gaps and builds a tightly integrated pipeline of controls to ensure airtight security and continuous compliance. You can also expand the scope of your compliance program or drive scalability by leveraging common control mapping. This helps you get multiple certifications in less time.

How to implement a compliance framework?

Implementing compliance frameworks and industry standards involves a systematic and structured approach to establish or update internal policies to align them with applicable regulatory requirements and ensure continuous improvement.

Understanding the applicability

The first step to implementing a compliance framework is to choose the right for your organization. As previously outlined, it boils down to the type of data you process and the industry regulations applicable to you. 

For example, if you are a service organization that processes customer data, SOC 2 is beneficial. If you store or process patient health records in the US, HIPAA is compulsory. 

GDPR is compulsory if you collect personal information of those residing in an EU state and PCI DSS is a must if you process cardholder data. In many cases, more than may apply; if you collect personal data of EU residents and process payment cards, you should be PCI DSS and GDPR compliant. 

Control Mapping

Once you have finalized the framework, sort the regulatory requirements. This entails identifying the relevant controls mandated by the framework. If your framework is SOC 2, implement controls based on applicable trust principles. The ISO offers a family of guidelines that help businesses address specific security concerns. 

Regulatory requirements also include necessary activities around it such as reporting, working up a delivery estimate, setting up a budget, and more. It is a good practice to document the plans and activities. Updating changes, new requirements, and processes – especially areas of high risk, must be an ongoing activity. 

Gap analysis and framework implementation

Everywhere gap, gap. And you won’t know it exists until you conduct a risk assessment. A proactive risk management and monitoring program should include:

• A process to categorize all assets, wherever it is deployed into the level of vulnerability.
• A system to identify the types of risk that threaten the integrity of the assets.
• Gain clarity into the granularity of functions, processes, workflows, and interdependencies to identify gaps. 
• Analyze the impact of these risks and vulnerabilities.
• Implement controls and systems to identify, remediate, and mitigate vulnerabilities.
• Assign the owner to handle each vulnerability. 
• Continuously patch systems and deploy new tools as required to manage continuously evolving threats. 

How can Sprinto help?

Sprinto automatically maps the relevant controls and helps in identifying gaps. It runs automated checks to ensure effective implementation of controls and displays live status of compliance on the health dashboard. It features built-in policy templates, training modules, role-based access controls, integrated risk assessments, automated evidence collection and other key features to expedite the process.

Also read: Components of the compliance management system

How much does implementing compliance cost in general

The average cost of implementing compliance can range from a few thousand dollars to hundreds of thousands of dollars and can go up to $5 million. These costs can depend on your choice of implementation method. A GRC tool can cost you approximately $150000 for 3 years and $450000 for 5 years. Then there are costs of training, technological infrastructure and other compliance essentials. Tools like Sprinto can reduce this cost from anywhere to $8000-$25000 for a year and help you stay compliant while remaining within budget.

Compliance costs can also vary based on factors such as business size and complexity, scope of requirements, current security maturity, external consultation and more. Note that compliance is an ongoing process so the costs extend beyond the initial implementation.

You can utilize our compliance calculator to get a fair idea for a particular framework.

What are the penalties if you are non-compliant?

There can be varying levels of consequences in case of non-compliance. From fines and civil penalties to severe criminal penalties and lawsuits, the repercussions depend on the regulations that apply. 

For example, 

• Pertaining to GDPR, less severe violations can attract penalties up to €10 million or 2% of annual revenue of the organization. For more severe violations, the penalties go up to €20 million or 4% of the global annual revenue.
• HIPAA violations can result in civil penalties and range from $100 to $50000 per violation with a maximum of $1.5 million per year. It can also result in imprisonment upto 10 years in case of serious violations.

Get Compliant across 15+ frameworks with Sprinto

Compliance is challenging, hard, and costly. But at the same time, it is crucial and in many cases, compulsory.  Many businesses grapple with understanding the requirements and interpreting them as per business context. Implementation takes months and requires hundreds of man hours causing the revenue cycle to slow down because of lack of certification. That’s where compliance automation tools like Sprinto precisely play their part.

Sprinto, as a compliance automation platform helps you get compliant across 15+ frameworks at lightning speed, a fraction of cost, and minimal manual effort. The platform’s streamlined workflows put the compliance programs on autopilot and features like automated evidence collection save engineering bandwidth. Focus on business-critical tasks while Sprinto helps you get audit-ready in weeks.

Talk to an expert today and learn how you can expedite the certification process.

FAQs

What are the components of the compliance framework?

The four elements of a compliance program are choosing the right framework:

• Choosing the right framework
• Sorting out the controls specific to your business needs
• conducting a risk assessment
• fixing the gaps

What are the four types of compliance?

Four major types of compliance include:

• Financial compliance
• It compliance
• Health and safety compliance
• Legal compliance specific to industry or government.

What is the purpose of the compliance framework?

A compliance framework helps organizations mitigate security risks, operationalize existing processes, avoid penalties due to non-compliance, and gain customer trust. 

What is the difference between compliance and framework?

Compliance can be compared to law set by industry specifications or government legislation – it is mandatory to abide by these to avoid legal actions. Frameworks on the other hand offer a set of best practices and guidance that help organizations ensure safety and gain customer trust. In most cases, you will be subjected to legal trouble if you fail to comply.