MSP compliance is no longer optional—it’s a business-critical responsibility. As Managed Service Providers, we’re entrusted with securing clients’ IT systems, protecting sensitive data, and ensuring that operations meet a growing list of cybersecurity and privacy regulations.
Whether it’s NIST, ISO 27001, HIPAA, or GDPR, aligning with compliance frameworks isn’t just about avoiding penalties—it’s about building trust and demonstrating accountability.
Think of it like the time travel rules in Back to the Future: just as Doc Brown gave Marty strict guidelines to avoid catastrophic outcomes, compliance frameworks set clear rules to prevent serious risks—data breaches, legal issues, or loss of client confidence.
In this guide, we’ll break down what MSP compliance really means, explore the most important regulations and certifications, and give you actionable steps to stay ahead of today’s cybersecurity expectations.
What is MSP compliance?
MSP compliance refers to the process by which Managed Service Providers follow cybersecurity frameworks, regulations, and industry standards (like NIST, HIPAA, or SOC 2) to protect client data and ensure regulatory alignment. MSP compliance also involves managing and maintaining compliance data for each client to meet diverse regulatory requirements. A strong compliance posture is essential for demonstrating regulatory alignment and building client trust. When it comes to SOC 2, processing integrity is one of the trust service principles assessed during audits, ensuring that systems process data accurately, completely, and reliably.
What's the difference between regulations and certifications?
When it comes to compliance and IT regulations, it’s important to understand the difference between regulations and certifications. Regulations are legal requirements set by governing bodies that enterprises must adhere to in order to operate within the law. These requirements are established and enforced by regulatory bodies responsible for overseeing compliance across various industries.
Certifications, on the other hand, are voluntary standards that organizations can adopt to demonstrate their commitment to industry best practices. Many certifications are based on voluntary frameworks, such as NIST SP 800-63, which organizations can choose to implement to enhance their cybersecurity posture.
Some key differences between regulations and certifications include:
- Regulations are typically bound by the law, while certifications are usually industry-imposed
- Compliance with regulations and certifications is often verified through audits or inspections
- Regulations are updated and revised by the governing body, while certifications are updated and revised by the certifying body, we’ll briefly talk about some of them below
- Non-compliance with regulations can result in severe penalties or legal action, while non-compliance with certifications only leads to the loss of the certification, with subsequent damage to the reputation of your organization
Selecting and implementing the most relevant frameworks is essential to streamline compliance efforts and ensure regulatory adherence.
Which governing bodies update and revise regulations?
Now, as we just promised, here are a few examples of regulatory bodies (also known as governing bodies) that update and revise regulations. These are regulatory authorities or government agencies that are responsible for overseeing and enforcing regulations related to various industries or activities.
- The International Organization for Standardization (ISO): ISO is a regulatory body that develops and updates international standards related to quality management, information security, and other areas that impact MSP compliance.
- European Commission: The European Commission is the executive branch of the European Union (EU) responsible for proposing legislation, implementing decisions, upholding the EU treaties, and managing the day-to-day business of the EU. In relation to the General Data Protection Regulation (GDPR), the European Commission drafted and proposed the regulation, which was adopted by the EU Parliament and the Council of the European Union. The Commission also oversees the implementation and enforcement of the GDPR by EU member states as a key regulatory body.
- The National Institute of Standards and Technology (NIST): NIST develops and updates cybersecurity standards and guidelines for the United States government and private sector organizations. NIST’s Cybersecurity Framework is a popular compliance framework for MSPs and other IT professionals, and NIST acts as a regulatory body in setting these standards.
Which certifying bodies update and revise certifications?
Certifying bodies are organizations that create and maintain certifications. Many certifications are based on voluntary frameworks, which are non-mandatory guidelines that organizations can choose to adopt to enhance their compliance posture. There are many certifying bodies related to IT and MSP compliance, and here are three examples of known certifying bodies that update and revise certifications:
- CompTIA: CompTIA is a nonprofit trade association that offers vendor-neutral IT certifications. CompTIA certifications, such as Security+ and Network+, are widely recognized in the IT industry and are regularly updated to reflect changes in technology and best practices.
- (ISC)²: (ISC)² is a nonprofit organization that specializes in cybersecurity certifications, including the Certified Information Systems Security Professional (CISSP) and the Certified Cloud Security Professional (CCSP). (ISC)² updates its certifications regularly to ensure they remain relevant and reflect the latest trends in cybersecurity.
- PCI Security Standards Council: The PCI Security Standards Council is responsible for developing and maintaining the Payment Card Industry Data Security Standard (PCI DSS), a set of security requirements for organizations that process credit card transactions. The council updates the standard periodically to address emerging threats and changes in the payments industry.
A compliance audit reviews an enterprise’s adherence to regulatory requirements, including security policies, user access controls, and risk management.
Certifications & frameworks on the MSP business
Certifications and frameworks are useful tools that MSPs can leverage to ensure compliance with industry best practices and regulations. Certifications offer a way for MSPs to demonstrate their expertise in certain areas or prove their commitment to specific standards. By attaining certifications, MSPs can differentiate themselves from their competitors, gain more trust from their clients, and improve the quality of their services.
Frameworks, on the other hand, are structured approaches to addressing specific challenges or achieving specific goals. They provide a set of guidelines, best practices, and standards that MSPs can follow to achieve compliance, improve their processes, and enhance their security posture. Frameworks assist MSPs in managing information security and regulatory compliance. Additionally, frameworks help MSPs automate and streamline compliance processes, making it easier to meet regulatory requirements efficiently. Frameworks can be used in a variety of contexts, such as cybersecurity, risk management, or compliance management.
We will use both terms interchangeably in this article.
Some common frameworks include:
- NIST Cybersecurity Framework: The NIST Cybersecurity Framework is a comprehensive, widely adopted set of guidelines that helps organizations identify, protect against, detect, respond to, and recover from cybersecurity threats.
- CIS: The Center for Internet Security (CIS) controls are a set of best practices for securing IT systems and data. The controls cover areas such as access control, network security, and incident response.
- ISO: The International Organization for Standardization (ISO) 27001 is a standard for information security management systems (ISMS). It provides a framework for managing and protecting sensitive information.
Regulations
MSPs must comply with various regulations that impact their operations. These regulations are often designed to protect the privacy and security of sensitive information, such as personal data or healthcare information. Non-compliance with these regulations can result in significant penalties, legal action, or damage to reputation.
For example, the General Data Protection Regulation (GDPR) is a regulation that applies to any organization that processes the personal data of European Union citizens. It requires organizations to obtain explicit consent for data collection, provide access to collected data, and report data breaches. Ensuring data privacy and complying with data privacy laws like GDPR is essential to meet legal requirements and client expectations. Failure to comply with GDPR can result in fines of up to €20 million or 4% of global annual turnover, whichever is greater.
Some common regulations include:
- GDPR: The General Data Protection Regulation is a European Union regulation that sets guidelines for the collection and processing of personal data. It requires organizations to obtain consent for data collection, provide access to collected data, and report data breaches. Data privacy is a core focus of GDPR, and organizations must implement measures to comply with these data privacy requirements.
- HIPAA: The Health Insurance Portability and Accountability Act (HIPAA) is a US regulation that governs the handling of sensitive health information. HIPAA is specifically designed to protect protected health information (PHI) and requires organizations to implement strict security measures to safeguard patient data and report breaches.
- CCPA: The California Consumer Privacy Act (CCPA) is a California regulation that gives consumers the right to know what personal data is being collected about them and to request that their data be deleted. It applies to businesses that collect personal data from California residents and emphasizes the importance of data privacy compliance.
By understanding the difference between regulations and certifications and adopting common frameworks and regulations, MSPs can achieve compliance and maintain industry best practices, while mitigating compliance challenges. Ongoing efforts are required to maintain compliance with these evolving regulations and ensure continued protection of sensitive information.
The importance of regulatory compliance for MSPs
Compliance is a critical aspect for Managed Service Providers (MSPs) as they are responsible for managing the IT infrastructure and data of their clients. Non-compliance can result in significant risks and consequences for both MSPs and their clients. Therefore, MSPs should prioritize compliance with industry regulations and standards.
Compliance offers numerous benefits for MSPs, including increased trust from customers, reduced liability, and the ability to differentiate themselves from competitors. By demonstrating their commitment to industry standards and regulations, MSPs can build trust with their customers and establish a loyal customer base. Compliance can also help MSPs minimize the risk of security breaches or data loss, reducing the liability for both MSPs and their clients.
Other benefits of compliance include:
- Improved security and data protection: Compliance helps MSPs establish and maintain robust security measures, protecting data from potential breaches or cyber-attacks. Implementing effective compliance measures also enhances an organization's overall security posture.
- Reduced likelihood of data breaches and cyber-attacks: Compliance enables MSPs to identify and mitigate security risks, reducing the chances of data breaches or cyber-attacks.
- Enhanced business reputation and credibility: Compliance demonstrates MSPs’ commitment to industry standards and regulations, establishing a positive reputation and credibility with customers.
- Increased efficiency and productivity: Compliance helps MSPs implement standardized processes and procedures, reducing inefficiencies and improving productivity. Balancing compliance with operational efficiency is essential to ensure that governance requirements do not hinder business productivity.
- Improved risk management and governance: Compliance ensures MSPs comply with legal and regulatory requirements, reducing the risk of penalties or fines and ensuring good governance.
Ensuring compliance is crucial for businesses to avoid costly penalties and reputational damage. Conducting regular compliance audits can help identify potential risks and weaknesses in your organization’s security and risk management procedures. Remember, compliance is an ongoing compliance journey that requires continuous adaptation to evolving regulations and proactive improvement.
Common compliance challenges for MSPs
Achieving compliance can be a significant challenge, especially for small businesses or IT teams with limited resources. Managing numerous compliance tasks across multiple clients adds to the complexity, as MSPs must balance regulatory requirements with operational efficiency. Small businesses may lack the resources to implement robust security measures while changing regulations can add complexity to compliance efforts.
One common challenge for MSPs is keeping up with changing regulations. IT regulations are continually evolving, making it challenging for MSPs to keep up with new requirements and ensure ongoing compliance. Additionally, small IT teams may not have the time or resources to dedicate to compliance efforts, increasing the risk of non-compliance. Finally, compliance requirements can be complex and difficult to understand, especially for those who lack experience or expertise in the area.
Here are five common challenges MSPs face and some possible solutions:
- The complexity of regulations: Compliance can be challenging for MSPs due to the complexity of regulations. Endpoint security is a critical area MSPs must address, as securing endpoints through patch management and multi-factor authentication is essential for compliance. To streamline the process, MSPs can work with a compliance consultant or invest in compliance management software.
- Lack of resources: Limited resources can make it difficult for MSPs to dedicate the necessary time and personnel to compliance. To address this, MSPs can consider outsourcing compliance management to an MSSP.
- Changing regulations: The constantly evolving nature of regulations can make it challenging for MSPs to keep up. MSPs must also stay vigilant against evolving cybersecurity threats by implementing incident response plans and security controls. MSPs can invest in ongoing compliance training and education for IT staff to stay up-to-date.
- Limited understanding of regulations: Many MSPs may not fully understand the regulations they need to comply with, which can lead to potential compliance gaps. MSPs can work with a compliance consultant or attend industry events and conferences for education and training.
- Cost of compliance: Compliance can be costly, especially for small IT teams with limited budgets. MSPs can leverage cloud-based compliance tools and services to reduce costs.
The role of employee training in compliance
Employee training is a cornerstone of maintaining compliance for managed service providers. In today’s rapidly evolving regulatory landscape, ongoing training and education are essential to ensure that every team member understands the latest compliance regulations and the specific regulatory requirements that impact their daily work. Effective compliance training empowers employees to recognize and respond to potential compliance violations before they escalate into serious issues, such as data breaches or other security incidents.
By investing in regular security training, MSPs can significantly reduce the risk of accidental or intentional breaches of sensitive data. Well-trained employees are better equipped to follow best practices, identify suspicious activity, and adhere to internal policies designed to ensure regulatory compliance. This proactive approach not only helps in maintaining compliance but also fosters a culture of accountability and vigilance throughout the organization.
Ongoing training is especially important as compliance regulations and cyber threats continue to evolve. By keeping staff up-to-date with the latest developments, managed service providers can adapt quickly to new compliance requirements and minimize the risk of non-compliance. Ultimately, prioritizing employee training is a critical component of any successful compliance program, helping service providers protect sensitive data, avoid costly compliance violations, and maintain the trust of their clients.
Building client trust through compliance
For managed service providers, building and maintaining client trust is fundamental to long-term success—especially in regulated industries where data security and compliance are non-negotiable. Demonstrating a commitment to compliance efforts and implementing robust security measures sends a clear message to clients: their customer data is in safe hands.
By aligning business operations with established compliance frameworks, such as HIPAA compliance for healthcare providers, MSPs can ensure they are meeting all relevant regulations and compliance requirements. This not only helps in protecting customer data but also positions the MSP as a reliable partner capable of navigating complex compliance challenges. Addressing common compliance challenges—like identifying compliance gaps or mitigating potential compliance violations—shows clients that the MSP is proactive about risk management and dedicated to continuous improvement.
Embracing compliance as a core part of business operations also provides a competitive advantage. Clients are more likely to choose service providers who can demonstrate compliance with industry standards and who have a strong compliance program in place. Effective compliance solutions help MSPs differentiate themselves, build lasting relationships, and foster client trust by consistently delivering on data security and regulatory obligations.
In summary, prioritizing compliance is not just about avoiding penalties—it’s about building a reputation for excellence, reliability, and trustworthiness in the eyes of clients, especially in sectors where protecting customer data is paramount.
MSP compliance checklist
Use this checklist to ensure your MSP remains compliant across diverse client environments, reduces liability, and strengthens trust.
1. Conduct a Comprehensive Risk Assessment
- Identify vulnerabilities in client infrastructure
- Evaluate third-party/vendor risks
- Prioritize risks by impact and likelihood
- Document findings to guide mitigation strategies
2. Define and Enforce Security Policies
- Establish acceptable use, access control, and data handling policies
- Include incident response, backup, and disaster recovery procedures
- Align policies with frameworks like NIST or ISO 27001
- Review and update policies regularly
3. Implement Access Controls & Data Encryption
- Apply role-based access controls (RBAC)
- Require strong authentication (MFA/SSO)
- Encrypt data at rest and in transit using modern protocols
- Restrict administrative privileges to essential personnel
4. Train Staff on Compliance and Security Protocols
- Conduct regular cybersecurity awareness training
- Include phishing simulations and data handling practices
- Ensure all users understand regulatory obligations (e.g., HIPAA, GDPR)
- Maintain training records for audit purposes
5. Monitor Systems and Maintain Compliance Documentation
- Use SIEM or endpoint monitoring tools to track activity
- Log access, changes, and incidents in real time
- Store audit logs securely and in compliance with retention policies
- Maintain a compliance evidence trail (e.g., risk reports, control documentation)
6. Perform Internal and External Compliance Audits
- Schedule regular internal audits and gap analyses
- Conduct third-party audits or assessments when required
- Review audit outcomes and implement corrective actions
- Track audit results and improvements over time
7. Stay Informed and Adapt to Changing Regulations
- Subscribe to updates from regulatory bodies (NIST, PCI, HHS, etc.)
- Join industry associations (e.g., MSPAlliance)
- Regularly review framework revisions (e.g., SOC 2 updates, ISO 27001:2022 changes)
- Adjust policies and technical controls to meet evolving requirements
Steps to Achieving Compliance
Achieving compliance is critical for Managed Service Providers (MSPs) to build and maintain trust with their customers, avoid costly fines, and protect their reputation. However, navigating the complex landscape of regulations and frameworks can be challenging, especially for small IT teams with limited resources. The compliance journey for MSPs is an ongoing process that requires continuous adaptation to evolving regulations and proactive policy updates. Throughout this process, MSPs must address both their own and their clients compliance needs to ensure comprehensive governance and security. In this section, we will discuss the key steps to achieving compliance, including risk assessment, policy development, and ongoing monitoring.
- Conduct risk assessments
A risk assessment is a critical first step in achieving MSP compliance, as it involves identifying cybersecurity threats and evaluating potential security threats and vulnerabilities. By conducting a risk assessment, MSPs can gain a better understanding of their security posture and identify areas that require improvement.
The NIST Cybersecurity Framework can be used to guide risk assessments, helping organizations systematically identify, protect against, detect, respond to, and recover from cybersecurity threats.
- Develop policies and procedures
Once potential risks have been identified, MSPs can begin developing policies and procedures to mitigate those risks. Policies should be comprehensive, clearly defining acceptable use, access controls, data retention and destruction, and incident response. Policies should also address processing integrity to ensure that data is handled accurately and reliably throughout all organizational processes. Effective policies are essential for managing information security and regulatory compliance. Additionally, policies should be regularly reviewed and updated to ensure they align with changing regulations.
- Advice the hire of an MSSP service
MSPs can work with a compliance consultant or partner with a managed security service provider (MSSP) to navigate compliance challenges. MSSPs specialize in managed security services such as compliance management, threat detection, incident management, and response. These experts offer guidance and support throughout the compliance process, helping MSPs navigate complex requirements and implement effective security measures. MSSPs help MSPs improve their compliance posture through expert guidance, ensuring that compliance measures are effectively selected and implemented. Additionally, MSSPs assist in identifying and implementing relevant frameworks, which are essential for meeting regulatory requirements and building client trust.
- Implement robust security measures and controls
Policies and procedures should be supported by appropriate technical and administrative controls. Examples of controls include firewalls, intrusion detection and prevention systems, access controls, encryption, and endpoint security. By implementing appropriate controls, MSPs can better protect their clients’ data and systems. Implementing effective compliance measures is also essential for regulatory adherence.
- Document and evidence
Documenting policies, procedures, and controls is essential for demonstrating compliance. MSPs should document and maintain compliance data for each client to address varying regulatory requirements and support detailed reporting. It is also important to document compliance processes, as this is essential for demonstrating regulatory adherence. MSPs should maintain comprehensive records of all compliance-related activities, including risk assessments, policy development, and control implementation. Additionally, evidence of compliance should be regularly reviewed and updated to ensure it remains accurate and up-to-date.
- Ongoing monitoring
Achieving MSP compliance is an ongoing process that requires continuous monitoring to maintain compliance with industry regulations and security standards. MSPs should regularly monitor their security posture, review and update policies and procedures, and assess the effectiveness of controls. Additionally, ongoing monitoring ensures MSPs remain aware of any changes to regulations or security threats, allowing them to proactively adapt their compliance efforts. It is also important to focus on balancing compliance with operational efficiency, so that compliance requirements are met without hindering business productivity.
FAQs
What is MSP compliance?
MSP compliance refers to how Managed Service Providers align their operations and security practices with industry regulations and cybersecurity frameworks. It ensures they protect client data, maintain legal and contractual obligations, and meet standards like NIST, HIPAA, or SOC 2.
What frameworks do MSPs need to follow?
MSPs commonly follow frameworks such as NIST Cybersecurity Framework, SOC 2, ISO 27001, and CIS Controls. The choice depends on client industry, data sensitivity, and regulatory environment (e.g., HIPAA for healthcare or GDPR for EU data handling).
Is MSP compliance mandatory?
MSP compliance is mandatory when servicing regulated industries like healthcare, finance, or government. Even when not legally required, compliance is strongly recommended to mitigate risk, build client trust, and meet contractual security expectations.
How can MSPs simplify compliance?
MSPs can simplify compliance by:
- Conducting regular risk assessments
- Standardizing policies and procedures
- Using compliance management tools
- Partnering with MSSPs or consultants
- Staying updated on changing regulations
Automation and documentation also streamline audit readiness.
What’s the difference between SOC 2 and ISO 27001?
SOC 2 is an audit report focused on how a company handles customer data based on five trust principles (e.g., security, privacy), while ISO 27001 is a global standard that certifies a full information security management system (ISMS). SOC 2 is common in the U.S., while ISO 27001 is internationally recognized.
Takeaways
As technology advances, the importance of compliance for MSPs continues to grow. Achieving compliance can be a daunting task, but the benefits are undeniable. It can increase customer trust, reduce liability, and demonstrate a commitment to cybersecurity best practices.
With ongoing training, effective documentation, and a commitment to continuous improvement, MSPs can ensure they are meeting the requirements of industry regulations and frameworks. As we look to the future, it is clear that compliance will continue to be a key factor in the success of MSPs, and those that prioritize it will have a competitive advantage.
