Cloud compliance consists of the procedures and practices that ensure that a cloud

environment complies with governance rules. In other words, when you build a
compliant cloud environment, your environment conforms to one or more specific sets
of security and privacy standards.

Those standards could be established by a government agency, as is the case with

compliance frameworks like the European Union General Data Protection Regulation
(GDPR) or the California Privacy Rights Act (CPRA). They could also be an industry
standard, like the Payment Card Industry Data Security Standard (PCI DSS). Or, they
could be internal governance policies that a company establishes for itself.

The frameworks that affect a given business are determined by factors such as the
jurisdiction in which your business operates, the industry or sector of the business, and
the number of users the business has. For example, the GDPR applies to most
businesses that process data owned by or associated with residents of the E.U.,
regardless of which industry the company operates in or whether the company has a
physical presence in the European Union. In contrast, the PCI DSS standard affects
only companies that process payments.

Each compliance framework contains a unique set of rules. In general, however, the
requirements include mandates such as ensuring “reasonable security” for workloads,
encrypting sensitive data, and demonstrating that your organization performs regular
audits to identify and address potential security issues.

Compliance and governance are a bit more complicated in the cloud than they are on-prem
because public cloud providers operate according to a shared responsibility model. Under this
model, cloud providers are responsible for managing some aspects of security, such as securing
the physical servers that host VM instances and storage buckets. They also usually perform
regular audits of their systems, as required by a variety of government and industry compliance
standards.

How Cloud Compliance Works

Although the specifics of cloud compliance will depend on the types of workloads you
are hosting in the cloud and the compliance rules that your business needs to meet,
most cloud compliance workflows can be broken down into a few basic steps.

Assess Compliance Needs

The first step is determining what the compliance requirements actually are with regard
to your cloud workloads. Most compliance frameworks describe compliance rules in
relatively generic terms. The GDPR requires “reasonable security” to protect sensitive
data, for example, but it does not specify the exact tools or settings that businesses
need to implement to achieve reasonable security.

That means it’s up to the business to assess compliance requirements and determine
how to translate them into specific tools and processes.

Define Compliance Rules

 After determining how your business will implement the tools and practices necessary to
meet cloud compliance requirements, you should define specific rules that will help you
track the enforcement of those requirements.

For example, a cloud compliance rule could state that user data must never be stored in
your cloud environment in unencrypted form. Or, you could establish a rule stating that
SSH access will be disabled by default for cloud VMs.

Perform Compliance Audits

After defining compliance rules, you should perform audits to check whether the rules
are being followed.

You can do this manually, of course, by evaluating your cloud workload configurations
and determining whether they align with the rules you have established.

But it’s much more efficient to automate compliance by using auditing tools that
automatically scan cloud configuration files, logs, and other data sources to detect
compliance violations based on the rules you have established.

What is GRC?
Governance, Risk, and Compliance (GRC) is a structured way to align IT with business goals while managing risks and meeting all industry and
government regulations. It includes tools and processes to unify an organization's governance and risk management with its technological innovation
and adoption. Companies use GRC to achieve organizational goals reliably, remove uncertainty, and meet compliance requirements.

What does GRC stand for?

GRC stands for governance, risk (management), and compliance. Most businesses are familiar with these terms but have practiced them separately in
the past. GRC combines governance, risk management, and compliance in one coordinated model. This helps your company reduce wastage,
increase efficiency, reduce noncompliance risk, and share information more effectively.

Governance
Governance is the set of policies, rules, or frameworks that a company uses to achieve its business goals. It defines the responsibilities of key
stakeholders, such as the board of directors and senior management. For example, good corporate governance supports your team in including the
company's social responsibility policy in their plans.

Good governance includes the following:

 Ethics and accountability

 Transparent information sharing

 Conflict resolution policies

 Resource management

Risk management
Businesses face different types of risks, including financial, legal, strategic, and security risks. Proper risk management helps businesses identify these
risks and find ways to remediate any that are found. Companies use an enterprise risk management program to predict potential problems and
minimize losses. For example, you can use risk assessment to find security loopholes in your computer system and apply a fix.
 Compliance
Compliance is the act of following rules, laws, and regulations. It applies to legal and regulatory requirements set by industrial bodies and also for
internal corporate policies. In GRC, compliance involves implementing procedures to ensure that business activities comply with the respective
regulations. For example, healthcare organizations must comply with laws like HIPAA that protect patients' privacy.

Why is GRC important?

By implementing GRC programs, businesses can make better decisions in a risk-aware environment. An effective GRC program helps key
stakeholders set policies from a shared perspective and comply with regulatory requirements. With GRC, the entire company comes together in its
policies, decisions, and actions.

The following are some benefits of implementing a GRC strategy at your organization.

Data-driven decision-making
You can make data-driven decisions within a shorter time frame by monitoring your resources, setting up rules or frameworks, and using GRC software
and tools.

Responsible operations
GRC streamlines operations around a common culture that promotes ethical values and creates a healthy environment for growth. It guides strong
organizational culture development and ethical decision-making in the organization.

Improved cybersecurity
With an integrated GRC approach, businesses can employ data security measures to protect customer data and private information. Implementing a
GRC strategy is essential for your organization due to increasing cyber risk that threatens users' data and privacy. It helps organizations comply with
data privacy regulations like the General Data Protection Regulation (GDPR). With a GRC IT strategy, you build customer trust and protect your
business from penalties.

What drives GRC implementation?

Companies of all sizes face challenges that can endanger revenue, reputation, and customer and stakeholder interest. Some of these challenges
include the following:

 Internet connectivity introducing cyber risks that might compromise data storage security

 Businesses needing to comply with new or updated regulatory requirements

 Companies needing data privacy and protection

 Companies facing more uncertainties in the modern business landscape

 Risk management costs increasing at an unprecedented rate

 Complex third-party business relationships increasing risk

These challenges create demand for a strategy to navigate businesses toward their goals. Conventional third-party risk management and regulatory
compliance methods are not enough. Hence, GRC was introduced as a unified approach to help stakeholders make accurate decisions.

How does GRC work?

GRC in any organization works on the following principles:

Key stakeholders
 GRC requires cross-functional collaboration across different departments that practices governance, risk management, and regulatory compliance.
Some examples include the following:

 Senior executives who assess risks when making strategic decisions

 Legal teams who help businesses mitigate legal exposures

 Finance managers who support compliance with regulatory requirements

 HR executives who deal with confidential recruitment information

 IT departments that protect data from cyber threats

GRC framework
A GRC framework is a model for managing governance and compliance risk in a company. It involves identifying the key policies that can drive the
company toward its goals. By adopting a GRC framework, you can take a proactive approach to mitigating risks, making well-informed decisions, and
ensuring business continuity.

Companies implement GRC by adopting GRC frameworks that contain key policies that align with the organization's strategic objectives. Key
stakeholders base their work on a shared understanding from the GRC framework as they devise policies, structure workflows, and govern the
company. Companies might use software and tools to coordinate and monitor the success of the GRC framework.

GRC maturity
GRC maturity is the level of integration of governance, risk assessment, and compliance within an organization. You achieve a high level of GRC
maturity when a well-planned GRC strategy results in cost efficiency, productivity, and effectiveness in risk mitigation. Meanwhile, a low level of GRC
maturity is unproductive and keeps business units working in silos.

What is the GRC Capability Model?

The GRC Capability Model contains guidelines that help companies implement GRC and achieve principled performance. It ensures a common
understanding of communication, policies, and training. You can take a cohesive and structured approach to incorporate GRC operations across your
organization.

Learn
You learn about the context, values, and culture of your company so you can define strategies and actions that reliably achieve objectives.

Align
Ensure that your strategy, actions, and objectives are in alignment. You do so by considering opportunities, threats, values, and requirements when
making decisions.

Perform
GRC encourages you to take actions that bring results, avoid those that hinder goals, and monitor your operations to detect sudden changes.

Review
You revisit your strategy and actions to ensure they align with the business goals. For example, regulatory changes could require a change of
approach.

What are common GRC tools?

GRC tools are software applications that businesses can use to manage policies, assess risk, control user access, and streamline compliance. You
might use some of the following GRC tools to integrate business processes, reduce costs, and improve efficiency.
 GRC software
GRC software helps automate GRC frameworks by using computer systems. Businesses use GRC software to perform these tasks:

 Oversee policies, manage risk, and ensure compliance

 Stay updated about various regulatory changes that affect the business

 Empower multiple business units to work together on a single platform

 Simplify and increase the accuracy of internal auditing

You can also combine GRC frameworks on one platform. For example, you can use AWS Cloud Operations to govern cloud and on-premises
resources.

User management
You can give various stakeholders the right to access company resources with user management software. This software supports granular
authorization, so you can precisely control who has access to what information. User management ensures that everyone can securely access the
resources they need to get their work done.

Security information and event management

You can use security information and event management (SIEM) software to detect potential cybersecurity threats. IT teams use SIEM software
like AWS CloudTrail to close security gaps and comply with privacy regulations.

Auditing
You can use auditing tools like AWS Audit Manager to evaluate the results of integrated GRC activities in your company. By running internal audits,
you can compare actual performance with GRC goals. You can then decide if the GRC framework is effective and make necessary improvements.

What are the challenges of GRC implementation?

Businesses might face challenges when they integrate GRC components into organizational activities.

Change management
GRC reports provide insights that guide businesses to make accurate decisions, which helps in a fast-changing business environment. However,
companies need to invest in a change management program to act quickly based on GRC insights.

Data management
Companies have long been operating by keeping departmental functions separated. Each department generates and stores its own data. GRC works
by combining all the data within an organization. This results in duplicate data and introduces challenges in managing information.

Lack of a total GRC framework

A complete GRC framework integrates business activities with GRC components. It serves the changing business environment, particularly when you
are dealing with new regulations. Without a seamless integration, your GRC implementation is likely to be fragmented and ineffective.

Ethical culture development

It takes great effort to get every employee to share an ethically compliant culture. Senior executives must set the tone of transformation and ensure that
information is passed through all layers of the organization.

Clarity in communication
 The success of GRC implementation depends on seamless communication. Information sharing must be transparent between GRC compliance teams,
stakeholders, and employees. This makes activities like creating policies, planning, and decision-making easier.

How do organizations implement an effective GRC

strategy?
You must bring different parts of your business into a unified framework to implement GRC. Building an effective GRC requires continuous evaluation
and improvement. The following tips make GRC implementation easier.

Define clear goals

Start by determining what goals you want to accomplish with the GRC model. For example, you might want to address the risk of noncompliance to
data privacy laws.

Assess existing procedures

Evaluate current processes and technologies in your company that you use to handle governance, risk, and compliance. You can then plan and
choose the right GRC frameworks and tools.

Start from the top

Senior executives play a leading role in the GRC program. They must understand the benefits of implementing GRC for policies and how it helps them
make decisions and build a risk-aware culture. Top leaders set clear GRC-driven policies and encourage acceptance within the organization.

Use GRC solutions

You can use GRC solutions to manage and monitor an enterprise GRC program. These GRC solutions give you a holistic view of the underlying
processes, resources, and records. Use the tools to monitor and meet regulatory compliance requirements. For example, Netflix uses AWS Config to
make sure its AWS resources meet security requirements. Symetra uses AWS Control Tower to quickly provision new accounts that fully adhere to
their corporate policy.

Test the GRC framework

Test the GRC framework on one business unit or process, and then evaluate whether the chosen framework aligns with your goals. By conducting
small-scale testing, you can make helpful changes to the GRC system before you implement it in the entire organization.

Set clear roles and responsibilities

GRC is a collective team effort. Although senior executives are responsible for setting key policies, legal, finance, and IT personnel are equally
accountable for GRC success. Defining the roles and responsibilities of each employee promotes accountability. It allows employees to report and
address GRC issues promptly.

How can AWS help with GRC?

AWS Cloud Operations optimizes cloud resources with business agility and governance control. You can manage dynamic resources on a massive
scale and reduce costs.

For example, with AWS Cloud Operations, you can perform the following tasks:

1. Govern, grow, and scale AWS workloads in one place

2. Ensure your risk management process stands up to an audit

3. Automate compliance management to remove human error

What Is Regulatory Compliance?
Regulatory compliance is the process of adhering to laws, regulations, standards, and
other rules set forth by governments and other regulatory bodies. It is an important
aspect of doing business, as companies are required to follow certain laws and
regulations to maintain their operations.

Regulatory compliance helps ensure that companies do not engage in unethical or

illegal practices, and can be used to protect both their employees and customers, often
by protecting their data, namely personally identifiable information and protected health
information (PII/PHI). These compliance standards are specific to industries and
locations and can result in large penalties if not followed correctly.

What Benefits Can Organizations Gain by Ensuring

Regulatory Compliance?
There are many benefits to an organization for achieving or demonstrating regulatory
compliance. A major benefit is business continuity and improved trust in the industry
and among customers. Some other benefits include:

1. Improved Operational Efficiency: Adhering to regulatory compliance can help

organizations ensure all operations are conducted efficiently and in accordance
with the set regulations. This, in turn, helps organizations streamline procedures
and processes, leading to improved operational efficiency and reduced costs.
2. Reduced Risk and Liability: Regulatory compliance helps organizations stay up
to date with the changing laws and regulations and abide by them, thus reducing
the risk of penalties, fines, and other forms of liabilities.
3. Improved Public Image: Organizations that comply with regulations gain a
positive public image, as they demonstrate a commitment to safe and ethical
operations. This can lead to improved public trust and increased confidence,
which can lead to increased brand value.
4. Greater Resilience: Organizations that are compliant are more resilient to
changing regulations, as they already have systems in place to meet regulatory
demands. This helps organizations plan better for future change, promoting
greater business continuity.
5. Increased Efficiency: By establishing clear procedures, processes, and
systems to ensure regulatory compliance, organizations can become more
efficient in the way they operate, which leads to improved productivity and cost
savings.
How Does Regulatory Compliance Work?
In any industry, there are regulations, and organizations operating in those industries
must comply with these regulations. Compliance can cover a variety of different
practices, processes, and operations within an organization. An organization will likely
have more than one area of compliance.

Some of the different kinds of compliance include the following:

 Financial Compliance: Organizations must maintain fair, transparent financial

records and refrain from unethical or illegal financial practices that harm
stakeholders or consumers.

Examples of such regulations are the Federal Deposit Insurance Corporation

(FDIC) rules for consumer protection and the Sarbanes-Oxley Act (SOX) that
requires financial reporting and transparency for corporations to mitigate fraud.

Additionally, Service Organization Control 2 (SOC 2) compliance is an attestation

to investors and insurers regarding the security of systems holding customer
data. It is administered by the American Institute of Certified Public Accountants.

 Cybersecurity Compliance: Cybersecurity regulations focus on the security and

privacy of data in IT systems, including regulations covering the implementation
of encryption, firewall security, network controls, breach prevention, and
remediation efforts.

Many modern regulations include cybersecurity requirements,such as Health

Insurance Portability and Accountability Act (HIPAA) regulations, the Federal
Risk and Authorization Management Program (FedRAMP), and Payment Card
Industry Data Security Standard (PCI DSS).

 Regulatory Compliance: This unique form of compliance emphasizes the legal

obligations an organization faces as part of its operation. Regulations are a legal
form of governance that is predicated on legislation and oversight, typically from
a governmental or adjacent regulatory body.

This form of regulation can often overlap with the others. Compliance usually
includes financial, IT, reporting, and audit logging requirements in many cases.

Because there are significant overlaps between different types of regulations, it is

essential to understand where such laws come from. For example, HIPAA is a
regulatory requirement for all healthcare providers, insurance companies, and
associated vendors instituted and administered by federal and local governments.
HIPAA, however, contains several provisions for cybersecurity and financial protection.
Conversely, SOC 2, while containing several provisions governing data management,
security, and privacy, is not a regulatory requirement. It is not governed by law and is
not required as part of any industry standards.

What Are Some Regulatory Compliance Regulations?

Different industries will typically include unique regulations. Some regulations will
transcend industry and apply to a wide swath of common organizational types.

Some of the common regulations include:

Organizations Organization Areas of

Requirements
Applies To Governed By Coverage

Covered
Protecting
entities
Health Private
(hospitals, Department of
Insurance Health Cybersecurity controls;
doctors, Health and
Portability and Information physical and administrative
insurance Human Services
Accountability (PHI) from privacy controls
companies) and (HHS)
Act (HIPAA) unauthorized
their business
disclosure
associates

Requiring Corporations must implement

U.S. Securities
Sarbanes- transparency security, transparency, and
Publicly traded and Exchange
Oxley Act in corporate accountability into financial
corporations Commission
(SOX) financial reporting to stakeholders and
(SEC)
reporting the government

All businesses Protecting Businesses must implement

General Data The EU
collecting consumer privacy, security, and
Protection Information
consumer data information in consent controls to protect
Regulation Commissioner’s
in the European EU consumer data from
(GDPR) Office (ICO)
Union jurisdictions disclosure or abuse

Protecting Businesses must implement

California Midsize and California
consumer privacy, security, and
Consumer large Privacy
information in consent controls to protect
Privacy Act businesses in Protection
California consumer data from
(CCPA)* California Agency (CPPA)
jurisdictions disclosure or abuse

Federal Risk Cloud service The Joint Securing CSPs must implement NIST
and providers Authorization cloud 800-53 and other controls to
Authorization working with Board (JAB) and systems used meet minimum standards
Management federal Program by federal
Program agencies Management agencies
(FedRAMP) Office (PMO) through third-
 party vendors

Digital Securing
Cybersecurity contractors defense- Contractors must implement
Maturity Model working with The Department related IT NIST 900-171 and NIST 800-
Certification Department of of Defense systems in 172 controls to work in the
(CMMC) Defense the DoD supply chain
agencies supply chain

* As of January 1, 2023, the CCPA was amended into the California Privacy Rights Act
(CPRA) with expanded regulations and controls.

Additionally, several standards are not required or governed by law but apply
specifically to either industry practices or optional adoption by a company:

Organizations Organization Areas of

Requirements
Applies To Governed By Coverage

American Organizations must

Service Data security,
Institute of meet minimum security
Organization Any who adopt privacy,
Certified Public and privacy standards
Control (SOC) the standard confidentiality,
Accountants and undergo regular
2 and integrity
(AICPA) audits

International Organizations design,

International
Organization for Data and IT develop, implement, and
Any who adopt Organization for
Standardization infrastructure maintain Information
the standard Standardization
(ISO) 27000 security Security Management
(ISO)
Series Systems (ISMS)

Payment Card
Industry Payment processors and
Payment Card Retailers and
(including credit merchants must
Industry Data merchants Credit card
card companies implement security
Security accepting and payment
like Visa, practices to secure
Standard (PCI credit card information
Mastercard, payment information
DSS) payments
American from theft
Express, etc.)