Cloud Compliance – The Legally Compliant Cloud

We therefore look at what it takes to ensure complete cloud compliance—i.e., compliance with all relevant legal requirements—in the cloud.

What is Cloud Compliance?

The term cloud compliance refers to a process designed to ensure that all regulatory requirements are met when using cloud services. These include general legal regulations such as the GDPR or HIPAA, industry-specific standards, and internal company guidelines.

The aim is to ensure the protection of sensitive data (of employees and customers). A credible commitment to cloud compliance also helps to minimize liability risks for companies and strengthen their customers' trust in the services they offer. 

In practice, SaaS providers should proactively provide their customers with important information to demonstrate compliance with all key requirements. At the same time, it also makes sense from the customer's perspective to actively request such evidence or to be familiar with the relevant regulations and standards themselves.

Regulations & Standards – Cloud Compliance in Practice

The topic of cloud compliance is quite complex. This is mainly due to the wide range of requirements and regulations that must be complied with to ensure maximum compliance. In addition, there are essential standards whose compliance should be considered “best practice”:

• General Data Protection Regulation (GDPR)
  This EU regulation forms the legal basis for the protection of personal data. Under this regulation, companies must clearly state what data is processed, for what purpose, and on what legal basis. The GDPR also requires extensive documentation and verification obligations.

  For cloud providers and customers, this means that all data-related processes must be documented and secured by appropriate technical and organizational measures (TOM). The rights of data subjects (access, erasure, data portability, etc.) must also be preserved when using cloud services.

• IT Security Act
  This law applies in particular to operators of so-called critical infrastructures (KRITIS), i.e., companies in sectors such as energy, health, finance, and transportation. It requires the implementation of special security standards and the reporting of significant IT disruptions to the Federal Office for Information Security (BSI).

  Cloud services used in these sectors are therefore subject to particularly high requirements in terms of availability, integrity, and confidentiality. The act also requires regular security checks, penetration tests, and the use of certified technology.

• HIPAA (Health Insurance Portability and Accountability Act)
  HIPAA regulates the handling of health data in the US and imposes strict requirements on its confidentiality, integrity, and availability. For cloud services used by healthcare providers in the US, this means that they must also operate in compliance with HIPAA as so-called “business associates.” 

  This includes technical safeguards such as access controls, encryption, and secure transmission methods. In addition, HIPAA requires contractual agreements between service providers and data protection authorities that specify exactly how data is processed, stored, and restored in an emergency. For international cloud providers, it is essential to demonstrate HIPAA compliance transparently, for example through appropriate audit reports or certifications.

• ISO/IEC 27001
  This international standard specifies requirements for an information security management system (ISMS). Companies that obtain ISO 27001 certification demonstrate that structural measures in the area of information and cyber security are systematically planned, implemented, and continuously improved within the company.
• ISO/IEC 27018
  As a supplement to ISO 27001, this standard focuses on the protection of personal data in the cloud. It defines requirements for providers who process personal data on behalf of their customers. These include regulations on user consent, data deletion, transparency toward customers, and non-disclosure to third parties without consent.

Depending on the customer's field of activity or the cloud provider's specialization, individual regulations (such as HIPAA) may play a more or less important role. It is crucial that customers choose SaaS solutions from partners who can demonstrate the necessary cloud compliance in their field of business.

Challenges in Implementing Cloud Compliance

It is not only the sheer volume of regulations that can pose a significant hurdle to the practical implementation of cloud compliance. In fact, there are a number of stumbling blocks in everyday life:

• Transparency and control over data processing
  When outsourcing IT processes to SaaS solutions, companies “lose” direct access to and control over their data. This data is no longer stored on their own servers, but is provided by a third-party provider. This requires both a high degree of trust in the integrity of the provider and extensive consultation and coordination.
• Multi cloud and hybrid IT environments
  The combination of different cloud platforms (hybrid cloud/multi cloud) and local IT systems leads to complex structures in which compliance measures are difficult to control centrally. The more numerous the structures or providers involved in the processes, the more difficult it becomes to demonstrate and maintain cloud compliance under these conditions.
• Lack of expertise and internal resources
  Implementing regulatory requirements requires expertise in IT, law, and data protection—something that is hardly realistic for individual companies to achieve today, especially given the constantly evolving conditions and legal situations. To comply with regulatory requirements—especially in complex cloud structures—it makes sense to work with specialized providers. 

• Regional differences
  International cloud providers are subject to different legal regulations, some of which may conflict with each other. It is particularly challenging to balance European data protection standards with US law, especially with regard to laws such as the CLOUD Act. 

  This act, for example, entitles US authorities to request data from US companies that is stored abroad (e.g., in the EU). However, this data is also subject to the strict requirements of the GDPR.

In fact, this is only a small selection of the various challenges in the field of cloud compliance. However, they already give a good impression of the complexity of the subject as a whole. In the following section, we will address the question of how companies and providers ensure the security of their cloud structures. 

Technical and Organizational Measures (TOMs)

Technical and organizational measures are a central pillar of data protection and thus also of cloud compliance. By defining and implementing appropriate measures, companies and SaaS providers can (and must) ensure that information is handled in compliance with data protection regulations. 

Technical Measures

Technical protection mechanisms should include the following points:

• Encryption: Both stored data (data at rest) and transmitted data (data in transit) must be secured against reading and unauthorized access using strong encryption.
• Access control: There must be strict rules governing which employees have access to which data. We recommend both a “least privilege access (LPA)” approach (users/software) and a “zero trust” concept (clients/end devices).
• Logging & monitoring: All security-related events within the network must be logged and continuously monitored. This enables both the preventive detection of possible attacks and subsequent analyses to reconstruct data leaks or compliance violations.

Organizational Measures

The following measures help with data protection in terms of organization and structure:

• Role and authorization concepts: A clear distribution of roles reduces the risk of unauthorized access. Responsibilities and competencies must be documented and reviewed regularly. In general, it is advisable to develop a role-based authorization concept.
• Documentation requirements and audit trails: Compliance with compliance requirements must be comprehensively documented. This includes, for example, data processing directories, access logs, risk analyses, and change and approval processes. Digital audit trails are helpful for providing evidence to authorities or customers upon request.
• Training and awareness: Regular and target group-specific training for employees, especially on data protection, phishing, cybersecurity, password management, and safe behavior in the cloud, can often prevent violations of cloud compliance requirements. 

All these measures should be accompanied by internal controls and, ideally, external audits. This enables SaaS providers to authentically prove (to their customers) that their security commitments actually deliver what they promise.

Cloud Compliance – The Role of the SaaS Provider

Ultimately, the (data) security of your own cloud—and thus also the question of compliance—stands or falls with the selection of the right provider. Customers should be able to expect the following aspects from a provider of their choice.

Transparency in Cooperation

A trustworthy SaaS provider proactively informs its customers about:

• Security and data protection measures (TOMs) in place
• Data storage locations (e.g., data centers in the EU)
• Existing certifications and audit results
• Emergency plans and recovery strategies

Support in Compliance Matters

In addition to simply providing customers with information, good providers should also actively support compliance with individual compliance requirements, for example through the following services:

• Option to select the data center location (e.g., Germany or EU)
• Provision of contract documents such as AV contracts and data protection impact assessments
• Transparent service level agreements (SLAs) on availability and response times
• Access to audit reports, certifications (such as ISO/IEC 27001) and security documentation 

Important: These points do not exclusively determine the quality of a provider. On the other hand, a good SaaS partner should provide at least all of these features or services in order to be considered for collaboration.

Cloud Compliance – Together With GFOS

Always on the safe side – GFOS is your partner for compliance in the cloud. With our GFOS knownCloud and our broad portfolio of SaaS services, we support our customers worldwide in making their own IT fit for the future. From Industry 4.0 to modern HR processes, we help you reap all the benefits of cloud computing while retaining full control over your data.

Secure yourself and your IT successfully – by working with an experienced and ISO 27001-certified SaaS provider who will deliver the right solution for your individual requirements. Feel free to contact us for a personalized consultation.