Software-as-a-service (SaaS) compliance is all about how businesses manage cloud security and data protection. Meeting compliance rules is a straightforward goal with complex execution. Each new SaaS tool a company adds to its stack raises questions about risk and accountability against a backdrop of evolving regulations and security standards.

Below, you’ll learn about SaaS compliance requirements, how to best meet them, and how to evaluate SaaS vendors for your business.

What’s in this article?

• What is SaaS compliance?
  
• What’s required to meet common SaaS compliance standards?
  
• Why does SaaS compliance matter for businesses that build or use cloud software?
  
• How do organizations support compliance through security, data protection, and access management?
  
• What challenges do SaaS teams face when seeking compliance certifications?
  
• How should businesses evaluate SaaS vendors?
  
• How Stripe Identity can help
  

What is SaaS compliance?

SaaS compliance is the ongoing work of ensuring that a cloud-based product follows applicable data and security rules. While specific requirements vary depending on the region or industry, all products must safeguard personal information, prevent breaches, and be transparent about how they use data.

Current compliance frameworks include the EU’s GDPR, the US’s HIPAA, California’s CCPA, and security standards such as System and Organization Controls (SOC 2) or International Standards Organization (ISO) 27001.

All of these require businesses to prove they understand the following:

• What data they collect

• How they store data

• Who can access data

• How they protect data from misuse or unauthorized access

What’s required to meet common SaaS compliance standards?

SaaS compliance standards all ask for proof that a company knows about its data, keeps it secure, and maintains consistent access policies. To provide this proof, a business generally combines policy, documentation, and evidence that it follows its own rules.

Here are some specific compliance standards and what they require:

• Data privacy laws: Regulations such as GDPR and CCPA expect companies to manage personal data with precision. They require privacy notices, clear consent, retention rules, and workflows for honoring access and deletion rights. When data is sensitive (e.g., health information under HIPAA), organizations must restrict access, keep audit logs, perform formal risk analyses, and quickly announce any breaches.

• Security frameworks: Security standards require companies to demonstrate how they approach risk management, access control, and encryption. ISO 27001 standards require a fully documented, continuously improving Information Security Management System (ISMS), while SOC 2 sets standards for audits to evaluate whether controls work in practice over time. PCI DSS is a standard that adds more specific rules for handling payment card data.

• Industry and regional rules: Financial reporting standards, such as Accounting Standards Codification 606 (ASC 606) and International Financial Reporting Standards 15 (IFRS), govern how SaaS companies recognize subscription revenue. Businesses operating in regulated markets or in the public sector work might need SOC 1 reports, Federal Risk and Authorization Management Program (FedRAMP) authorization, or strict data-residency commitments tied to local laws.

Why does SaaS compliance matter for businesses that build or use cloud software?

SaaS compliance makes cloud products more trustworthy, resilient, and scalable. It’s influential on every level, from everyday security to long-term customer relationships. Here’s why it matters.

Security expectations are higher than ever

Regulators have set a high bar for how companies handle personal data. Laws such as GDPR and CCPA require tight control over how information is collected, stored, and shared. European regulators have issued multibillion-dollar fines for improper data transfers.

Compliance fuels customer confidence

Customers often expect proof that a SaaS provider understands security. Certifications such as SOC 2 or ISO 27001 show that a provider’s controls have been independently audited. For example, Stripe undergoes SOC 1 and SOC 2 Type II audits and publishes a SOC 3 report that anyone can read.

A strong posture makes you competitive

Teams with their compliance work in place can move through procurement pipelines much faster. Clients often require proof of standards from the very beginning of the evaluation process. Having it ready can send you to the front of the line.

Compliance protects business continuity

Strong compliance builds stability. Companies that manage risk well can spend less time addressing incidents and more time improving their products.

How do organizations support compliance through security, data protection, and access management?

Businesses can stay compliant by building security into their systems. That means integrating consistent habits and visibility into how data moves. Here’s how it works.

Control access tightly

At compliant companies, only certain people can touch sensitive systems and data. Role-based access, single sign-on, and multi-factor authentication keep accounts locked down, while “least privilege” gives access only when people need it. Automated provisioning and deprovisioning help eliminate forgotten accounts. The audit trails created by these processes are essential for meeting common standards such as SOC 2, ISO 27001, HIPAA, and GDPR.

Protect data everywhere

Compliance frameworks require encryption because they assume attackers can intercept or access data. Sensitive information is encrypted throughout the system. Privacy laws add another layer. Organizations must understand what personal data they collect, how long they keep it, and how it moves through internal and third-party systems.

Support resilience through monitoring

Strong compliance programs depend on ongoing monitoring. Companies track logins, administrative actions, and configuration changes. Alerts surface unusual behavior. If something breaks, there’s a plan for investigating and for notifying regulators and customers.

Reinforce systems with people

Policy reviews, security trainings, and background checks keep standards high. Documentation shows that the organization follows its own rules. As a result, good habits solidify year after year. Auditors look for this kind of security culture, which helps technical controls work as intended.

What challenges do SaaS teams face when seeking compliance certifications?

SaaS teams face challenges that span law, security, and culture. They must build systems that can handle a patchwork of difficult and ever-changing requirements.

Here are some of the hardest parts:

• Regulations overlap: A company handling data from multiple countries might need to satisfy GDPR, CCPA, HIPAA, and other obligations at the same time, each with its own expectations and enforcement patterns. That’s in addition to regional requirements and situational security standards.

• Rules shift quickly: The security landscape is ever-changing. Privacy laws evolve, security frameworks are updated, and regulators alter guidance in response to new risks. Teams must monitor and adapt, or risk compliance drift.

• Resources are stretched: Certifications require tooling and documentation. Annual or ongoing audits demand evidence that teams must produce repeatedly. It all takes time and costs money. Even with automation, the cycle can feel relentless.

• Culture and process must stay in sync: Introducing new controls, tightening permissions, or adding review steps can meet internal resistance, especially when people are already fatigued.

How should businesses evaluate SaaS vendors?

When you select a SaaS provider, you’re choosing a security partner. Whoever you work with needs to prove they take compliance seriously.

Ask about the following:

• Certifications and audits: Check for SOC 2 or ISO 27001 reports, along with PCI DSS validation for any service that touches payment data. Reputable vendors will be able to share recent reports. Some might publish SOC 3 summaries for broader visibility.

• Security and data-protection practices: Ask how the vendor encrypts data, manages access, handles incidents, and trains employees. Strong providers document their controls and can explain how they meet privacy laws.

• Contracts: Review the vendor’s service level agreement (SLA), data processing terms, and breach notification commitments. Look into how they manage subprocessors. These documents should clarify who owns the data, how it’s used, and what happens if something goes wrong.

• Product features: The product itself can show you whether it was built with governance in mind. Watch for granular roles, audit logs, and data export and deletion tools.

How Stripe Identity can help

Stripe Identity is a suite of verification tools that allows businesses to quickly and securely verify customer identities, helping them fulfill their Know Your Customer (KYC) obligations.
Stripe Identity can help you:

• Onboard customers faster: Offer a seamless, automated identity verification process that reduces friction and increases conversion during onboarding.

• Mitigate fraud risk: Use advanced fraud detection capabilities to identify and prevent malicious actors from creating accounts or making fraudulent transactions.

• Improve operational efficiency: Remove the need to manually verify identities, reducing the time and resources required to onboard new customers.

• Configure the experience: Easily integrate Identity into your existing user experience and configure your verification methods and fallbacks.

• Scale with confidence: Stripe Identity's robust infrastructure can handle high-volume verification requests as your business grows—without adding operational overhead.

Learn more about how Identity can help you onboard customers securely and easily, or get started today.