Data Privacy Laws and Compliance in SaaS

For every organisation, its customer is its priority. What most concerns an organisation today is the privacy of its customers.

As the digital age advances, the heap of customer data being stored and processed is increasing daily and is a primary concern for consumers and businesses. Things have gotten direr following the emergence of software-as-a-service.

SaaS providers also collect and store vast amounts of sensitive data. The SaaS industry must have that data to provide customer service. So it’s imperative that they take steps to ensure compliance and data privacy law to protect their customer data.

Why must SaaS providers be worried about data privacy and compliance?

SaaS has become a notable target for threat actors to intrude on an organisation. Cyber attacks on third-party applications like Microsoft 365, Zoom, and Dropbox have only increased. Since its customers devote sensitive information to such services, SaaS providers are responsible for safeguarding customer data by making their solutions free from vulnerabilities for hackers to exploit.

For example, Microsoft 365  automatically permits to modification/deletion of data. If cyber attackers get a chance to intercept the network, its customer’s data will become highly vulnerable. With attacks increasing over these apps, every SaaS provider must be keen on protecting their applications.

SaaS and Data Privacy

SaaS companies must have strict data privacy policies and procedures to safeguard the volume of sensitive data they manage. A robust access control system, data encryption, regular vulnerability assessments, and penetration testing can be used to identify and eliminate security vulnerabilities.

Transparency is another important aspect when it comes to data privacy. SaaS providers must make their data collection and storage process transparent to the public. This includes providing clear and concise privacy policies to its customers. It should explain the practices a SaaS provider follows regarding data handling and must obtain information from a customer by gaining consent to collect and process their data.

SaaS and Data Privacy Laws

A SaaS company’s reputation is maintained by complying with specific data privacy laws, refraining from legal repercussions, and safeguarding customer data.

SaaS providers must abide by numerous data privacy laws and compliance standards. The following is a list of data privacy regulations and compliance requirements a SaaS solution must satisfy, which a company should verify before selecting a SaaS solution.


General Data Protection Regulation is a privacy law for individuals under the European Union. GDPR governs collecting, processing and storing personally identified data (PII). SaaS providers that deal with the sensitive information of EU residents must abide by the GDPR’s requirements by obtaining their consent, ensuring data security and responding promptly to data subject requests.

Likewise, there are different laws for residents of other countries.


If a SaaS business is dealing with the sensitive information of a Canadian resident, they must ensure that their company policies comply with Personal Information Protection and Electronic Documents Act (PIPEDA). It outlines how companies should handle personal data and protect your privacy.

SaaS providers must obtain the consent of the concerned individuals before collecting and processing the data.


According to the California Consumer Privacy Act (CCPA), SaaS providers should allow their customers to access, delete, and prevent the sale of their personal information. This law applies only to Californian residents and to businesses that collect personal information from Californian residents.

Another law that SaaS providers must follow to protect the payment card information of individuals is PCI DSS.


PCI DSS or Payment Card Industry Data Security Standard, is a global security standard brought forth by major credit card firms, including Visa, Mastercard, American Express and Discover.

PCI DSS ensures your personal and financial information is secure and helps in combatting credit card fraud.

SaaS companies that accept credit card payments must set up strict access controls, encrypt cardholder data, and frequently test the security procedures and systems.


In conclusion, companies who offer or opt for a SaaS solution must make checking and validating privacy laws a mandatory policy.

SaaS companies must therefore be aware of the data privacy laws and compliance of the countries they will work with. Having a clear-cut idea of their policies will ensure the compactness of the organisation’s reputation. It will help a SaaS company to build more intact privacy policies that blend well with the customer’s policies.

Consumers using SaaS solutions must always ensure the privacy laws of the SaaS company helps secure the data from cyber-attacks.