Data Security Practices for Compliant and Secure Software Development

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Efficient cybersecurity is critical for software development and IT operations. Nearly 80% of companies in 2022 had at least one public cloud environment. And, if LogicMonitor’s 2020 study is correct, data security, compliance, and privacy remain the most challenging aspects of managing the public cloud.

The costs of data breaches are rising across industries. According to IBM’s 2021 Cost of a Data Breach Report, the average losses from a breach in 2021 reached $4.24 million (up from $3.86 million a year before). Yes, a single successful cyberattack can cripple your company.

But it’s not like we’re all doomed — there are plenty of ways to secure software development. Allow us to show you the most practical security techniques and regulations. You’ll also learn how to find a reliable outsourcing company and make sure it keeps software development secure.

Importance of data security for businesses

Before examining the latest security solutions and regulations, we should introduce you to the basics.

Definition and elements of data security

Data security involves practices and tools that protect the IT ecosystem from unauthorized access, reduce the risk of file corruption, and ensure compliance with government regulations.

Based on this definition, we can distinguish four elements of data security:

1. Confidentiality — providing access to data only to authorized users and services

2. Integrity — storing files in a secure storage where third parties can’t modify them

3. Resiliency — backup and recovery tools to prevent loss of data

4. Availability — ensuring all of your data is readily available and visible

Now, let’s see why virtually every business needs to invest in data security and privacy technologies.

Why is security critical for companies?

According to the ITRC 2021 Data Breach report, data compromises in the US in 2021 reached 1862 and affected nearly 294 million people (a record high in the report’s history). Additionally, IBM’s 2021 Cost of a Data Breach Report saw an all-time high average data breach cost in 2021.

Industries that work with sensitive information are the biggest targets for hackers. For example, healthcare companies have had the biggest data breach losses in the last 11 years. The costs for the public sector increased by 78.7% compared to 2020. The banking and financial services are also highly targeted sectors, with an average loss of $5.72 million. Plus, manufacturing became the most attacked industry in 2021.

Not too encouraging, right? So, let’s see how implementing the latest security practices and policies can help mitigate the data security problem.

• Reduced data breach costs. According to IBM’s report, companies with zero-trust models, mature security tools, and access control lost an average of $3.28 million per data breach. At the same time, businesses without these tools lose an average of $5.04 million. In other words, implementing the latest data security practices can reduce data breach losses by 35%.
• Protect your reputation. Customer’s personally identifiable information (44%), intellectual property (27%), and employee data (26%) were the most common types of stolen data in 2021. If these data leaks, you can lose customers and have civil cases against you. You also risk exposing this information when outsourcing if you don’t work with a secure software development company.
• Fewer revenue losses. The lost reputation, cost of acquiring new customers, and business disruptions represent 38% of all data breach costs. Plus, industries like manufacturing suffer particularly heavily due to system downtime. That’s why companies that hope to maximize their revenue should invest in the latest security tools.
• Less legal troubles. Suffering a data compromise due to non-compliance with government regulations can lead to severe fines or legal responsibility. In healthcare, for example, infringement of data privacy laws can revoke your certification.
• Faster mitigation. It takes about 212 days to identify a data compromise for an average company. Imagine: during that time, hackers can repeatedly exploit the same vulnerability to mine sensitive data. Having reliable monitoring software lets you detect and remediate vulnerabilities until they cause too much damage.
• Reduces software development costs. Fixing security defects becomes more expensive as your product approaches the release stage. So, ensuring secure software development across the life can reduce the overall costs of your project.

Sounds promising. So, what kind of solutions help companies maintain their security?

Best data security practices and tools

Here are the main techniques to help you ensure a secure, compliant, and resilient IT environment for software development.

Authorization controls

Authorization and authentication controls are the cornerstone of cybersecurity. Authentication verifies the identity of a user or service, and authorization assigns a unique access token based on the privileges.

Companies can improve their cybersecurity by adopting a zero-trust model. It means the system doesn’t grant access to all entities from inside or outside the network perimeter by default.

Multi-factor authentication

Multi-factor authentication requires users to provide extra verification factors (one-time passwords, biometrics, etc.) in addition to their login and password. This method is proven to decrease the risks of cyberattacks (including ransomware, business email compromise, and server access).

Our advice is to also add a feature that automatically logs off users after some time. If an intruder gets access to your system, this function can prevent them from compromising more of your data.

Automated security tests

Validation tests and vulnerability scans should be a part of the secure software development pipeline. GitLab’s 2021 DevSecOps study shows that over 53% of developers run regular SAST (static application security testing) scans, and 44% perform dynamic application security testing (DAST) scans. Besides, over half of security professionals run regular dependency scans and license compliance checks.

Automation is a critical part of cybersecurity. According to IBM’s 2021 study, companies with security AI and automation lose 80% less for each data breach (compared to companies without these tools). Additionally, 75% of responders of the 2021 State of DevSecOps think manual data security and compliance checks slow down their time to market.

Monitoring and intrusion prevention

Companies should have systems that monitor their network for unusual traffic, changes to critical files, unsuccessful login attempts, and other malicious patterns. Larger organizations can benefit from the Security Information and Event Management platform that centralizes logs across the IT environment for the security teams.

Intrusion prevention systems take remediation measures after spotting potential threats. They can block suspicious traffic, isolate inflicted microservices, and reconfigure security settings to prevent repeated exploits.

Encryption

Data encryption means converting readable data into an unreadable format you can decipher with a security key. Advanced encryption algorithms make it nearly impossible to access your data for hackers, even if they manage to steal it.

You should also invest in encrypted communication systems so your employees can securely share confidential files. Depending on your company’s security requirements, you can also encrypt cloud servers and databases.

Tokenization (data masking)

Tokenization substitutes data with a generated number you can transform into a readable format only with a security token. The tokens are usually stored outside your company’s internal systems for extra security. Unlike data encryption, tokenization changes the values in files in a way that’s impossible to reverse-engineer.

Role-based access control

Role-based access control restricts access to your servers, applications, and data based on the user’s role and responsibilities. This method goes hand in hand with the Principle of Least Privilege — granting employees the minimal access rights needed to fulfill their duties.

This technique reduces the internal risks and lets companies quickly trace the origin of data breaches back to the perpetrator. It also makes it easier to set up new employees and manage user roles across platforms, operating systems, and services.

Backup and recovery

Data backup software regularly copies files and databases to secure cloud and physical environments to make them easily restorable. Doing so secures software development and business continuity if corruption, server crashes, or ransomware makes your files inaccessible.

Data classification

Organizations should classify their data according to its type, confidentiality, and value to the company. This lets you set up security measures for specific categories of files. For instance, your system can automatically encrypt and backup critical data, like intellectual property and customers’ personally identifiable information. Meanwhile, less sensitive data will be protected with less advanced mechanisms.

Your employees can classify files manually every time they create, edit, or release a document. A more time-efficient option is to make your system classify data automatically based on its content and context (metadata like the file’s author and creation directory).

Data erasure

Less sensitive data means fewer potential security liabilities. Industries like healthcare even enforce providers to destroy personally identifiable information and health data they haven’t used for more than six years. So, you should regularly erase data you no longer need for your business activities.

Data erasure doesn’t just delete files. It overwrites them with meaningless patterns and includes reformatting physical storage devices so that no one can recover the data.

Documented security policies

The security teams should regularly review your policies. It’s necessary to document all cybersecurity, privacy, risk tolerance, and mitigation rules and keep them up to date. Plus, your organizational scheme must outline stakeholders responsible for every service and business function.

You also need a clear application portfolio that displays your software’s capabilities, technical feasibility, and dependencies. It would help you understand who has access to each application, what permissions it has, and the security risks it poses.

Cybersecurity training

Compromised credentials are the most common attack vector responsible for 20% of data breaches in 2021. Adding to that, the 2022 Ponemon Cost report names employee negligence the reason for 56% of insider security incidents.

Organizations should conduct regular training to teach employees about the latest security practices and anti-fishing measures. We also recommend implementing BYOD (bring your own device) policies. For instance, Device Posture Check can prevent access to devices that don’t meet your system’s security standards. You should also ask employees to use VPNs and anti-malware software on their mobile devices.

Now that we’ve discussed the best practices for secure software development, it’s time to learn about the most popular regulations.

Common data security and privacy regulations

Compliance with regulatory requirements is difficult to navigate as it depends on your industry, company’s location, and customer’s residence. So, let’s look at the most significant and widely applicable laws.

GDPR

The General Data Protection Regulation (GDPR) obliges organizations to implement technical and organizational safeguards to protect the information of European Union’s users from unauthorized access. Among other things, it requires you to request consent when collecting data, anonymize confidential information, and notify users in case of a data breach.

GDPR retained its effects in the United Kingdom after Brexit. The UK GDPR shares the same principles as the original law but with several implications for cross-country data transfer and controlling establishments.

CCPA

California Consumer Privacy Act (CCPA) regulates how businesses can collect the personal data of California residents. It gives consumers the right to know the information you collect and lets them prohibit selling it to third parties. However, the law applies only to companies that possess data of at least 50,000 Californians or have over $25 million of yearly revenue.

HIPAA

The Health Insurance Portability and Accountability Act (HIPAA) defines the security and privacy requirements for managing personally identifiable health data. It applies to healthcare providers (clinics, pharmacies, doctors, and others), insurance companies, and other entities that process US patients’ data. Violation of this law can lead to severe penalties, including fines of up to $1.5 million and criminal charges.

SOX

The Sarbanes-Oxley Act (SOX) requires public organizations and private companies to maintain secure financial reporting control to prevent inaccuracies and fraud. To ensure compliance, you must validate their security configurations and implement access management mechanisms. The law also requires you to audit changes that impact financial data, transactions, and compliance processes.

ISO/IEC 27001

ISO/IEC 27001 is an international standard for maintaining, establishing, and improving data security. This certification is not specific to any industry and is not obligatory. Still, ISO 27000 shows that a company follows the best practices for secure software development and data management.

PCI DSS

Payment Card Industry Data Security Standard (PCI DSS) applies to all businesses that process credit or debit card transactions. Some essential safeguards you need to apply to get certified include encrypted transmissions, network monitoring tools, and secure access to cardholder data.

FISMA

The Federal Information Security Management Act of 2002 (FISMA) applies to federal agencies and organizations that provide them with IT systems. Under this law, you should have advanced data classification systems and access controls.

You may need to follow other regulations based on your type of software and target markets. But if you cooperate with experienced software development vendors, they will keep everything in check.

How outsourcing companies can help you

Hiring a reputable software development outsourcing provider is the easiest way to create secure and compliant software. Here are the reasons why you should consider this form of cooperation:

• Efficient data security tools. Seasoned providers integrate the latest data security, privacy, and risk mitigation techniques into software development. This usually includes access control, automatic scans, encryption, and compliance checks. They also separate development, testing, and operational environments to reduce risks of unauthorized access.
• Shift-left approach to development. Professional teams use a combination of DevOps and shift-left methodologies to perform security evaluations early in the development life cycle. This helps you patch as many vulnerabilities as possible before the release and improve your code quality.
• Culture of shared responsibility. Nearly 40% of developers in DevOps teams feel responsible for software development. So, you can expect every member of an outsourcing team to follow the most efficient data breach prevention practices.
• Regulatory compliance. Outsourcing companies can add compliance checks to the development process, preventing misconfigurations from reaching production. Some providers offer due diligence and compliance audits to ensure your services adhere to security and privacy requirements.

But even the best outsourcing companies can’t guarantee secure software development without your contribution.

Security practices for software development outsourcing

Outsourcing your project to another company is no excuse for the lack of security practices on your part. You still need to follow these essential data exchange and management requirements:

• Encrypt your files and communication. Always encrypt the files you exchange with the outsourcing company to eliminate the risk of data leaks. Your team should also use secure communication protocols (like SSH, FTP, or SFTP) to transfer files and discuss confidential information. Plus, it would help to use business-grade VPNs to conceal your traffic from intruders.
• Protect your confidentiality with agreements. An airtight NDA is mandatory to secure your intellectual property and corporate secrets during development. The provider should also explicitly describe the security mechanisms, remediation plans, alerting processes, and other critical details in the service-level agreement (SLA).
• Implement digital hygiene practices. Your employees should follow essential cyber hygiene practices, like using unique complex passwords and two-factor authentication for different accounts. It also helps if they don’t use personal accounts to access corporate resources or tools.
• Document security measures. The project’s documentation must outline the tech stack and methodologies for the development. So, ensure the provider uses reliable cloud services, programming frameworks, tenant isolation strategies, and risk management policies.
• Study data security laws. Have your legal team study the security and privacy regulations in the provider’s outsourcing market. Most legislation requirements overlap, but it’s still necessary to know about possible complications before development starts.
• Share minimal possible access and data. The outsourcing provider should access as few systems and data as possible for development. It’s advisable not to share any personally identifiable data about your customers or employees unless necessary.

Another way to strengthen security and prevent other outsourcing risks is to work with a professional vendor with a proven track record.

Ensure data security and compliance with Acropolium

For two decades, Acropolium has been delivering high-grade solutions for companies in fintech, healthcare, logistics, HoReCa, and other industries. Clients often hire us for several projects, and many have worked with us for over ten years.

Acropolium has an ISO 9001:2015 certification for quality management systems. This certification means we comply with regulatory requirements, have role-based access management, and tight control over the software development life cycle. It also shows we uphold the international quality standards across all projects.

Working with us gets you a transparent development process with 24/7 tracking of your project and direct access to our vetted engineers. Unlike many companies, we offer Single Sign-On (SSO) as a part of our outsourcing services to help clients securely manage and track project data.

Security and stability are our top priorities. Our team continues supporting your product long after release, taking care of uptime monitoring and security upgrades. You also get a warranty for any bugs you report to us.

Conclusion

Data security is critical for all organizations that manage customer information, intellectual property, and other restricted data. Not prioritizing it during software development can have devastating consequences for any company. Even a seasoned outsourcing provider can’t guarantee secure software development if you neglect essential security practices.

We can assess your IT infrastructure, patch the vulnerabilities, and help you adopt the latest security tools before starting development. Our company also provides a full range of development services with the SDaaS (Software Development as a Service) model for a fixed monthly fee.

If you need to safeguard your software development and IT infrastructure, reach out to us so we can talk business.