Compliance and governance elevate data security, effective controls, and regulatory observance for managed service providers (MSPs).
Strike a balance between operational execution and overemphasising compliance; otherwise, you will create unwanted bottlenecks and stifle innovation. On the other hand, overlooking regulatory requirements leaves a firm open to security risks and substantial financial penalties.
Companies should consider working with an MSP to ensure the successful navigation of security compliance frameworks.
This compliance guide illuminates the path forward.
The Two Extremes of Governance and Compliance
With compliance needs and best practices, businesses often fall into one of two categories.
These are discussed below:
Over-Reliance on Compliance
Larger businesses that can staff a compliance department can overemphasise its importance. The compliance team must review every major decision or significant repositioning to seek approval.
Compliance requirements and the need for approval add a drag factor to any significant move. Excessive checks are made, adding days or weeks before a planned action clears the department.
Business agility is significantly reduced, especially compared to smaller firms that can swiftly grasp new opportunities.
Ultimately, it is necessary to streamline compliance and governance to avoid it being a constant barrier to progress.
Neglect Governance and Compliance
The opposite is also true. MSPs and the companies they represent may be inexperienced in offering a managed service and achieving compliance. To build trust, they may try to demonstrate compliance yet execute poorly because of a lack of experience.
An ad hoc approach to regulatory requirements and dealing with compliance regulations can result in an increased risk of cybersecurity blunders and data breaches.
Navigating compliance successfully requires creating scalable, easily understood governance frameworks. Compliance efforts are rewarded by making it simpler to execute and maintain.
Understanding What MSP Governance and Compliance Means
Businesses often rely either on a managed service provider (MSP) or a managed security service provider (MSSP) to ensure regulatory compliance.
Differences Between a Managed Service Provider versus a Managed Security Service Provider
An MSP has a broad IT mandate. They manage most or all aspects of IT infrastructure, security, data integrity, and access controls to keep businesses operating smoothly.
An MSSP is more narrowly focused on IT security. This includes intrusion detection and prevention, regularly scanning for vulnerabilities, Security Information and Event Management (SIEM), and rapid incident response. Their main remit is to pre-emptively prevent, subsequently identify, and eradicate security threats as they appear.
Governance, Policies, and Procedures
Overcome common compliance challenges through effective MSP governance policies, reliable systems, and by following established procedures.
An MSP has already performed proper compliance and governance for its own business, plus many of its clients. This informs its approach in compliance matters, making it well-positioned to offer these services to other clients.
Besides clients’ compliance needs, successful interpretation of compliance requirements avoids it becoming an impediment to smooth operations. An MSP must navigate these waters, which highlights potential compliance gaps that can occur. As such, they are better placed to ensure client compliance despite frequent regulatory changes.
Compliance with Legal and Industry-Relevant Regulations
Proper compliance includes adhering to various regulatory requirements and operating within industry regulations. Governance frameworks must consider both.
Here are a few regulatory bodies and compliance frameworks worth mentioning.
Cyber Essentials – an initiative from the UK government, Cyber Essentials and the more comprehensive Cyber Essentials Plus assist businesses in improving their cybersecurity. They provide a framework and certification requirements.
SOC / SOC 2 / SOC 3 – the Systems and Organisational Controls (SOC) framework governs how service providers, including MSPs, manage client data. The framework principles are security, processing integrity, availability, privacy, and confidentiality. Audits help businesses prepare to qualify for SOC 2 compliance.
GDPR – the EU’s General Data Protection Regulation (GDPR) confirms what is required around data collection, processing, and data storage for EU citizens. All MSPs and companies managing EU resident data must adhere to it, regardless of where they operate from. Hefty fines follow noncompliance.
NIST – suggested regulations for cybersecurity are published by the National Institute of Standards and Technology (NIST). These offer voluntary frameworks to follow, e.g. the NIST SP 800-63 refers to digital identities, data additions, authentication, and long-time user data management. Overlaps exist between NIST and other regulatory frameworks.
PCI DSS – the Payment Card Industry Data Security Standard (PCI DSS) is a set of global payment processing standards that refers to requirements for protecting cardholder information. It is broadly applicable across industries that accept payments directly or through third parties.
ISO – ISO 27001 establishes international standards for managing information security. It is a comprehensive standards framework that applies to businesses of all sizes and offers criteria to adhere to across many distinct areas. An experienced MSP can help a business fully comply with ISO 27001.
HIPAA – is a mandatory framework established under US law within the Health Insurance Portability and Accountability Act (HIPAA). These apply to healthcare operations of various sizes, including hospitals, clinics, insurers, and other related service providers. It covers patient information and medical records.
Common Misconceptions
The correct approach to compliance is as an enhancer to business operations, not an ongoing hindrance. Businesses avoid unintended snafus later by taking the correct approach from the start.
While compliance team members make recommendations, they never carry out the work. Therefore, IT and compliance teams must ensure such recommendations do not impede ongoing core business functions.
Talk with our security experts at Microbyte to improve your compliance approach.
Best Practices for Effective MSP Compliance
For effective MSP compliance, MSPs must follow best practices. Doing so makes it possible to gain a competitive advantage over other operators that fail to do so.
Prioritise Core Business Functions
Core business functions are at the centre of becoming compliant and remaining so. Service providers must prioritise core services over other concerns because everything flows from this point.
It is often beneficial to embrace automation to streamline compliance procedures. This reduces the need for constant manual oversight and reduces inefficiencies.
Implement a Risk-Based Approach
Effective risk management should avoid near-blind adherence to checklists. Proper risk assessments combine automation with manual oversight to keep high-risk concerns top of mind, with lesser concerns trickling down from there.
Compliance policies should follow the principle of ‘keep it simple, stupid’ (KISS) and emphasise business efficiency with compliance procedures that avoid complexity. This especially applies to areas determined to have a lower risk profile.
Create a Culture of Compliance Without Bureaucracy
Companies do better when they incorporate compliance within their culture. While a compliance department can promote consistency and adherence to regulatory requirements, it should not become an obstacle.
Employees must receive ongoing training to maintain effective governance. Internal audits run periodically help to isolate gaps in compliance and unexpected vulnerabilities.
Implementing Compliance Measures
The compliance posture can dictate what measures are taken. Through effective implementation, MSPs achieve strong results for clients.
Security and Infrastructure Upgrades
Security upgrades focus on improving endpoint security, resolving inferior patch management, and properly implementing multi-factor authentication (MFA) methods.
Unwanted data exposure is avoided by using role-based access controls. These restrict user access based on their established responsibilities within the business.
Monitoring and Reporting for Compliance
Monitoring is essential for better compliance and governance. Tracking security information and managing IT-based events avoids security missteps.
Incident response plans must address cybersecurity threats head-on. Following action taken, reporting to clients, stakeholders, or regulators, where necessary, is applicable for regulatory adherence. Failure to do so may incur significant financial penalties.
The Role of IT and Automation in Compliance
Achieving and maintaining compliance must not create a bottleneck for the business.
While compliance requires adherence to policies and procedures to avoid fresh difficulties down the road, it must not interfere with core business activities.
Benefits of Automation in Compliance
Automation is necessary for compliance to reduce human error. It is beneficial to perform audits and to use automation to follow regulatory documentation.
Real-time alerts inform staff when potential compliance violations are found. This prevents employees from getting bogged down with compliance checks at every step.
Automated Compliance Tools
Software tools are available for security monitoring, risk assessments, and auditing.
Risk management platforms generate reports on current and historical compliance records. Audit records, including results and subsequent actions, form part of these records.
Overcoming Common Compliance Challenges
Meeting compliance requirements involves overcoming obstacles and challenges. It is never easy for MSPs, but facing these challenges is part of their responsibility.
Balancing Compliance and Operations
Managing compliance is the bread and butter of what MSPs and MSSPs do. Balance compliance and governance appropriately to avoid hurting business efficiency.
Automating compliance tasks reduces the potential for future business disruptions.
Keeping Up with Changing Regulations
Multiple compliance changes within regulated industries are harder to manage. Some industries are constantly evolving. MSPs must remain active on their compliance journey by studying newsletters and reading periodicals.
Updating compliance training allows employees to follow the same path, proactively adjusting policies as regulatory requirements change. This avoids abrupt procedural overhauls that harm business operations.
Managing Limited Compliance Resources
Keeping current in an ever-changing compliance environment is challenging for businesses.
Where in-house compliance expertise is modest, outsourcing compliance management to an MSP or an MSSP is often best.
Striking the Right Balance – Key Takeaways
For better compliance, here are some suggestions:
Avoid extremes – too much or too little compliance creates different business risks.
Balance risk – ensure effective compliance in the high-risk areas and pay less attention to smaller risks.
Automation is your friend – automate compliance activities and monitoring to promote efficiency and reduce human error.
Part of the culture – compliance must be integrated into company operations, not a separate irritant to manage.
Avoid stagnancies – proper governance requires reviewing and updating policies to manage new regulations as they appear.
Conclusion
A balanced approach to governance and compliance is required. Avoid overcomplication; otherwise, it creates operational drag and resentment. Good compliance should accompany business growth. This way, the business expands while building on a strong foundation of excellence.
Assess your current governance and compliance strategies. Look for clear inefficiencies and approaches to reduce unnecessary complications.
We recommend looking at our managed service page at Microbyte. We offer three security packages: Starter, Enhanced, and Complete. The Enhanced package moves our customers towards Cyber Essential compliance, whereas our Complete package includes Cyber Essentials (not Cyber Essential Plus) as standard.
