ISO 27001 Compliance in AWS for SaaS: Why It’s Just the Beginning

Many SaaS companies see ISO 27001 compliance in AWS as the finish line. They pass the audit, earn certification, and assume their cloud security is solid. The reality is that compliance is just a starting point. ISO 27001 provides a structured framework for managing security risks, but it does not address real-world cloud threats like misconfigured IAM policies, overprivileged access, or advanced attack vectors.

Even after the ISO 27001:2022 update, companies are not required to conduct white-box penetration testing, enforce strict runtime security monitoring, or fully harden IAM configurations. This means that even a certified company can still be vulnerable to data breaches, unauthorized access, or privilege escalation attacks.

For SaaS businesses running on AWS, moving beyond compliance means implementing real security best practices. This requires improving identity and access management, strengthening encryption, enabling advanced monitoring, and proactively testing defenses. Below, we’ll break down key AWS security controls and explain why they matter—not just for compliance but for building a truly secure cloud environment.

Logging and Monitoring: The First Layer of Security

Security starts with visibility. Without logging and real-time monitoring, there is no way to detect, investigate, or respond to security incidents.

CloudTrail: The Foundation of AWS Security Auditing

AWS CloudTrail logs every API call made within an AWS account. This includes user logins, changes to IAM policies, and modifications to cloud resources. Without CloudTrail, unauthorized access and privilege escalation attempts could go undetected.

For added security, log file integrity validation should be enabled. This prevents attackers from modifying logs to cover their tracks, ensuring that security teams can trust the audit trail.

VPC Flow Logs: Network Traffic Monitoring

While CloudTrail records API activity, VPC Flow Logs capture network traffic within an AWS environment. This is critical for detecting unauthorized connections, potential lateral movement, and unexpected data transfers. Many companies enable CloudTrail but overlook VPC Flow Logs, missing a key layer of network visibility.

Long-Term Log Retention for Incident Response

Security incidents are not always detected immediately. If logs are deleted after short retention periods to save costs, security teams may struggle to investigate breaches that occurred months earlier. Best practice is to retain logs for at least 365 days, ensuring historical data is available for forensic analysis.

Identity and Access Management (IAM): Eliminating Static Credentials

IAM is one of the biggest security challenges in AWS. Many companies still rely on IAM users with long-lived access keys, which can be exposed in code repositories, phishing attacks, or supply chain compromises.

Migrating to AWS IAM Identity Center (AWS SSO)

Instead of managing IAM users and passwords, companies should migrate to AWS IAM Identity Center. This allows authentication via federated login providers such as Okta, Google Workspace, or Azure AD. Unlike IAM users, Identity Center enforces short-lived session credentials, reducing the risk of credential leaks.

The Risk of Directly Attached IAM Policies

Many AWS environments contain IAM users with policies attached directly to their accounts. This creates a risk of excessive permissions, making it difficult to audit access. A more secure approach is to assign permissions through IAM groups and roles, ensuring that access is centrally controlled.

Why the Root Account Should Never Be Used

The AWS root account has unrestricted access to all resources and should never be used for daily operations. Multi-factor authentication (MFA) should be enforced, and the account should remain locked down, accessed only under emergency conditions.

Data Encryption and Secure Storage

ISO 27001 mandates that data should be encrypted, but it does not specify best practices for key management or access control. AWS offers multiple layers of encryption that SaaS companies should leverage.

Encryption at Rest and In Transit

Sensitive data should always be encrypted, whether it is stored in databases, object storage, or backups. AWS Key Management Service (KMS) provides centralized control over encryption keys, ensuring that only authorized services can decrypt data.

Securing Amazon S3: Preventing Public Data Exposure

S3 bucket misconfigurations remain one of the most common cloud security issues. While AWS provides the S3 Block Public Access feature, many companies still expose data due to misconfigured access control lists (ACLs) or overly permissive IAM policies.

Beyond blocking public access, S3 server access logging should be enabled to track read and write operations. This helps detect unauthorized access attempts and unusual data transfer patterns.

Compute Security: Hardening EC2, RDS, and Serverless Applications

Enforcing Secure Metadata Access on EC2

AWS EC2 instances provide an Instance Metadata Service (IMDS) that applications use to retrieve credentials and instance details. IMDSv1, the older version, is vulnerable to server-side request forgery (SSRF) attacks, allowing attackers to steal IAM credentials from an instance. IMDSv2 should be enforced across all EC2 instances, as it requires session-based authentication and prevents unauthorized access.

Restricting Public Access to EC2 and RDS

Exposing EC2 instances or RDS databases to the internet is a common security risk. Instead of allowing public SSH or RDP access, AWS Systems Manager Session Manager should be used for secure remote access.

For databases, strict network controls should be enforced. RDS instances should only be accessible from approved application servers, preventing external attackers from attempting brute-force login attempts.

Monitoring AWS Lambda for Serverless Threats

Serverless functions introduce unique security challenges. If an AWS Lambda function starts failing unexpectedly, this could indicate an attempted injection attack. Monitoring error rates and execution logs helps detect potential exploitation before attackers can escalate their activities.

Penetration Testing: The Missing Compliance Requirement

Despite its importance, ISO 27001 does not require penetration testing. This means that companies can be fully compliant while still having major security vulnerabilities.

White-Box Penetration Testing for AWS

Unlike black-box testing, where external security testers probe systems without prior knowledge, white-box testing simulates an insider attack. This allows security professionals to identify IAM misconfigurations, overprivileged roles, and potential privilege escalation paths that external attackers might not immediately discover.

Regular penetration testing should be a core part of any AWS security strategy, ensuring that new vulnerabilities are identified and mitigated before they can be exploited.

Real-Time Threat Detection and Response

Many compliance frameworks focus on preventive security measures but ignore real-time detection. AWS provides several services to monitor and respond to security threats in real time.

AWS GuardDuty: AI-Powered Threat Detection

GuardDuty continuously analyzes API calls, network activity, and IAM behavior to detect suspicious activity. This includes:

• Unusual API calls from unauthorized locations
• Compromised IAM credentials being used
• Connections to known malicious IP addresses

Security Hub: Centralizing Security Findings

AWS Security Hub aggregates data from multiple sources, including GuardDuty, IAM Analyzer, and AWS Config, providing a unified view of security risks. This helps security teams quickly identify and respond to active threats.

Employee and Vendor Security

Deprovisioning AWS Access for Departed Employees

One of the most overlooked security risks is failing to revoke access when employees leave a company. Former employees often retain access to AWS accounts long after their departure, creating potential security gaps. ISO 27001 recommends periodic access reviews, but best practice is to immediately disable access when an employee exits the company.

Enforcing Secure Authentication for Vendors

Third-party vendors should never use static IAM credentials. Instead, they should authenticate using federated login methods. Vendor access should be reviewed regularly, ensuring that they are not retaining unnecessary permissions beyond what is required for their role.

Conclusion

Achieving ISO 27001 compliance is an important milestone, but it should not be mistaken for real security. Many AWS SaaS companies remain vulnerable due to misconfigured IAM policies, insufficient monitoring, and a lack of proactive security testing.

To move beyond compliance, SaaS companies must:

• Replace IAM users with AWS IAM Identity Center
• Enforce strict logging, monitoring, and real-time threat detection
• Conduct regular white-box penetration testing
• Continuously review IAM policies and employee/vendor access

Security is an ongoing process. Compliance is a milestone, but true security requires continuous improvement, proactive testing, and a deep understanding of cloud threats.

ISO27001 for your SaaS is just the starting point