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Data privacy in SaaS: compliance and protection measures

Written by
Łukasz Warchoł
Published on
September 4, 2023

Ever wondered how giants like Google and Amazon faced data hiccups? Discover the essentials of data privacy in the SaaS landscape. From key challenges to best practices, arm yourself with knowledge that's crucial in today's digital age. Let's dive in!

Łukasz Warchoł
Content Manager
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Data protection laws have a direct impact on SaaS companies. These companie handle sensitive customer information and, therefore, need to regularly update their security standards in order to meet regulatory requirements.  Failure to comply with data protection and privacy laws can lead to significant financial losses and irreparable damage to a company's reputation.

For instance, Google Inc. was fined £50 million in 2019 for not meeting a GDPR requirement. Similarly, in 2021, Amazon Europe paid £746 million for a similar mistake. However, your SaaS company does not have to be the next on this list. The experiences of Google Inc. and Amazon warn global SaaS companies to prioritize compliance with SaaS requirements.

This article aims to provide an explanation of the fundamental challenges in SaaS Data Security and measures to protect your data and maintain high security.

Data protection laws

Prior to discussing data security in detail, it's important to understand the legislation in place due to international information security standards. Some states implement local laws and establish regulatory bodies. These authorities adhere to global standards and are more responsive to regional changes.

Here are some current laws and regulations from various nations:

  • GDPR: GDPR is the European regulation that safeguards personal data and applies to organizations worldwide if they handle the data of European residents. Global SaaS companies must comply with GDPR.
  • PIPL: PIPL regulates how organizations handle the personal information of Chinese citizens and residents, both within China and abroad. It includes provisions on sensitive information, cross-border transfers, individual rights, and liabilities.
  • ISO/IEC 27001: ISO/IEC 27001 is an internationally accepted standard for information security management. It provides SaaS companies with a certification to demonstrate compliance and ensure data security.
  • SOC 2: SOC 2 is a data reporting framework for SaaS companies, offering guidelines to strengthen data protection practices without being prescriptive.
  • HIPAA: HIPAA sets rules to safeguard patients' health information in medical facilities. SaaS companies must obtain consent for disclosure and prevent unauthorized use.
  • PCI DSS: PCI DSS provides requirements to secure credit card information, ensuring compliance for merchants, organizations, and software applications processing such data.
  • CCPA: CCPA regulates privacy between businesses and individuals in California. It covers companies meeting specific criteria and grants residents enhanced privacy rights, including the ability to opt out of information sharing and seek legal recourse for violations.

Challenges in SaaS data security

In the past, SaaS functionality and business innovation were prioritized over security. However, SaaS companies are now realizing the importance of reversing this trend. Inadequate SaaS security provisioning directly impacts regulatory reporting, including GDPR, CCPA, and SOC 2 Type II regulations.

Any cloud service provider or SaaS solution must adhere to these regulatory standards. To further illustrate the importance of data security, here are some additional examples of challenges to be aware of:

Security misconfiguration

An improper configuration of application components can lead to vulnerability and intrusion. These misconfigurations can be caused by human error or cybercriminals exploiting legitimate pathways and corrupting critical elements.

Also read: SaaS security in a nutshell - 10 best practices to protect client's data

Poor monitoring and logging

Effective logging and monitoring using Security Incident and Event Management (SIEM) are crucial for a SaaS company's Security Operations Centre (SOC). Weaknesses in these areas can make a network more susceptible to cyberattacks, especially with the increasing cloud migration of SaaS applications. Real-time monitoring of data streams becomes challenging, especially for organizations that must comply with privacy regulations and handle personal data.

Limited cloud usage & account hacking

When a SaaS company lacks visibility into the robustness of its cloud service usage and capabilities, it becomes vulnerable to severe cyber attacks. Unauthorized use of a cloud computing account, often through ransomware attacks, is a common and damaging form of cyber intrusion. Cybercriminals gain access to a target network and steal funds from businesses. Failure to comply can lead to data and intellectual property loss.

Shortcomings in cloud security architecture

If a company's cloud security architecture is compromised, it becomes highly vulnerable to cyber threats. All SaaS industry companies should develop a security architecture that integrates seamlessly with their cloud services provider.

By addressing these data security issues, companies can enhance their protection against cyber threats and safeguard their valuable assets.

Data security best practices for SaaS applications

When it comes to ensuring the security of your SaaS applications, several crucial steps need to be taken. Every aspect requires careful attention, from discovering and mapping your SaaS data to implementing encryption and aligning controls with risk levels. We will walk you through the best practices to protect your data and maintain high security.

Discovering and mapping your SaaS data

As a SaaS security expert, your first responsibility is to ensure the secure discovery, classification, and monitoring of all data in transit, in use, and at rest. By navigating and mapping your data, you can always know where it is and provide it with the highest level of security.

You may also like: Effective SaaS user management: tips and tricks

Implementing information encryption

Data encryption becomes crucial since cloud applications don't have traditional security measures like firewalls. By using techniques like Transport Data Encryption (TDE) and Transport Layer Security (TLS), you can protect your data in motion and secure data transfers. One effective measure to enhance encryption is to incorporate the use of a Virtual Private Network (VPN). A VPN creates a secure and encrypted connection between the user's device and the SaaS application server, effectively shielding data from unauthorized access.

Aligning controls with risk levels

Defining security controls that align with your acceptable risk levels is fundamental. However, it's important to strike a balance between security and system performance. SaaS providers must find the right approach to ensure data access, processing, and monitoring while minimizing any negative impact on performance.

Effective identity and access management controls

Identity and Access Management (IAM) tools play a vital role in verifying user identities and managing access. SaaS users should be able to integrate with these tools seamlessly, eliminating the need for multiple passwords. Advanced access control is also crucial to track user activities and ensure accountability within the system.

Logging and monitoring

Logging successful and unsuccessful access attempts and data modifications is essential for preventing unauthorized access and planning future security measures. These logs provide important insights and help detect any potential breaches.

Securely storing authentication credentials with key vault services

A reliable key vault service allows you to store and activate authentication credentials securely. These services also provide the capability to generate strong passwords and usernames for added security.

Prioritizing security in software development life cycle (SDLC)

Adopting a secure Software Development Life Cycle (SDLC) ensures that security measures are integrated throughout the development process. By incorporating threat modeling and penetration testing, you can further enhance the security profile of your SDLC.

Might be interesting: SaaS Delivery: ensuring reliable and secure software deployment

Managing SaaS security posture (SSPM)

SSPM is designed to address vulnerabilities that may arise during the SDLC proactively. This approach offers a comprehensive overview of the entire cloud environment, eliminating the need for multiple vendor-specific endpoints. SSPM controls and automates SaaS data security, reducing misconfigurations and speeding up the time-to-market.

By implementing these best practices, you can greatly enhance the security of your data in SaaS applications and mitigate potential risks effectively. Prioritizing data security is essential in today's digital landscape.


Data protection laws profoundly impact SaaS companies, necessitating compliance and robust data security measures. Prioritizing security, addressing data security challenges, and implementing best practices are crucial for enhancing data protection, mitigating risks, and preserving customer trust in the digital landscape.

Companies can proactively safeguard sensitive information by understanding SaaS providers’ unique challenges, such as security misconfigurations and limited cloud usage transparency. Taking steps like implementing encryption, aligning controls with risk levels, and adopting a secure Software Development Life Cycle (SDLC) can significantly bolster data security in SaaS applications. Protecting data is paramount in the ever-evolving world of technology.