What is Encryption at Rest

Encryption at rest represents a fundamental security control in third-party risk management, yet vendor implementations vary wildly in effectiveness. When assessing third-party vendors, you need concrete evidence of their encryption practices—not just checkboxes on questionnaires.

The control directly addresses data breach scenarios where attackers gain physical or logical access to storage systems. Unlike encryption in transit, which protects data during transmission, encryption at rest safeguards information residing on hard drives, SSDs, cloud storage buckets, backup tapes, and databases.

For GRC analysts mapping controls across frameworks, encryption at rest appears consistently: ISO 27001 control A.8.24.2, NIST SP 800-53 SC-28, SOC 2 CC6.1, and PCI DSS requirement 3.4. This crosswalk consistency reflects the control's criticality in protecting sensitive data throughout its lifecycle.

Technical Definition and Implementation

Encryption at rest employs cryptographic algorithms to transform readable data (plaintext) into an unreadable format (ciphertext) when stored on any persistent storage medium. The process requires:

1. Encryption algorithm: AES-256, AES-128, or approved alternatives
2. Encryption keys: Cryptographic keys that enable encryption/decryption
3. Key management system: Infrastructure to generate, store, rotate, and destroy keys
4. Access controls: Authentication mechanisms to prevent unauthorized decryption

Modern implementations typically use one of three approaches:

Approach	Description	Use Case	Key Management Complexity
Full Disk Encryption	Encrypts entire storage volume	Laptops, mobile devices	Low
Database Encryption	Encrypts specific databases or tables	Cloud databases, SaaS platforms	Medium
File-Level Encryption	Encrypts individual files	Document management systems	High

Regulatory Requirements and Framework Mapping

Multiple regulations mandate encryption at rest for specific data types:

GDPR Article 32(1)(a): Requires "appropriate technical measures" including encryption of personal data. While not explicitly mandating encryption at rest, Data Protection Authorities consistently interpret this as a requirement for high-risk processing.

HIPAA Security Rule 45 CFR §164.312(a)(2)(iv): Addressable specification requiring encryption and decryption of ePHI. Organizations must implement or document why alternative controls provide equivalent protection.

PCI DSS v4.0 Requirement 3.5.1: Mandates rendering Primary Account Numbers (PAN) unreadable using strong cryptography with associated key management processes.

SOC 2 CC6.1: Common criteria requiring logical and physical access controls, typically satisfied through encryption at rest for sensitive data storage.

Vendor Risk Assessment Applications

During vendor due diligence, encryption at rest verification requires more than attestation. Request specific evidence:

Documentation Requirements

• Encryption policy specifying algorithms, key lengths, and scope
• Key management procedures including rotation schedules
• Architecture diagrams showing encryption points
• Certificate of encryption (for cloud providers)

Technical Validation Points

1. Algorithm strength: Verify AES-256 or equivalent approved algorithms
2. Key storage: Confirm keys stored separately from encrypted data
3. Key rotation: Document rotation frequency (quarterly minimum for high-risk data)
4. Recovery procedures: Validate key recovery without compromising security

Red Flags in Vendor Responses

• "We use industry-standard encryption" without specifics
• Mixing encryption at rest with encryption in transit
• No documented key management procedures
• Reliance solely on cloud provider encryption without additional controls

Industry-Specific Considerations

Financial Services: FFIEC guidelines require encryption for customer information both in transit and at rest. Examiners specifically review encryption key management during audits.

Healthcare: Beyond HIPAA requirements, state laws like Texas HB 300 impose additional encryption mandates with specific breach notification exemptions for encrypted data.

Government Contractors: NIST SP 800-171 requires encryption at rest for Controlled Unclassified Information (CUI) using FIPS-validated cryptographic modules.

SaaS Providers: Multi-tenant architectures require tenant-specific encryption keys to prevent cross-tenant data exposure, even if the underlying infrastructure is compromised.

Common Implementation Gaps

Incomplete Coverage: Organizations often encrypt production databases but miss backups, logs, or temporary files containing sensitive data.

Weak Key Management: Storing encryption keys in the same system as encrypted data negates the control's effectiveness. HSMs (Hardware Security Modules) or dedicated key management services address this gap.

Performance Trade-offs: Database encryption can impact query performance by 5-15%. Vendors may disable encryption for perceived performance gains without documenting the risk acceptance.

Cloud Storage Oversights: S3 buckets, Azure Blob storage, and similar services require explicit encryption configuration. Default settings often leave data unencrypted.

Practical Validation Techniques

When evaluating third-party encryption at rest:

1. Request encryption certificates from cloud infrastructure providers
2. Review penetration test reports for encryption validation findings
3. Examine SOC 2 Type II reports Section IV for encryption control testing
4. Conduct technical interviews with vendor security architects
5. Perform configuration reviews during on-site assessments

Control Testing for Audit Trails

Effective encryption at rest testing produces clear audit evidence:

• Screenshots of encryption configuration settings
• Key management system audit logs showing rotation events
• Proof of separate key storage architecture
• Recovery test documentation demonstrating data accessibility
• Negative testing showing encrypted data remains unreadable without keys

Frequently Asked Questions

How does encryption at rest differ from encryption in transit?

Encryption at rest protects stored data on disks and databases, while encryption in transit secures data moving between systems via TLS/SSL. Both controls work together—data encrypted in transit often gets decrypted for processing, then re-encrypted at rest.

What encryption algorithm should vendors use for encryption at rest?

AES-256 remains the recommended standard, though AES-128 meets most regulatory requirements. Avoid vendors using DES, 3DES, or proprietary algorithms. FIPS 140-2 validated implementations provide additional assurance.

Can encryption at rest prevent all data breaches?

No. Encryption at rest prevents unauthorized access to stolen storage media but doesn't protect against compromised credentials, SQL injection, or authorized user misuse. Layer it with access controls, monitoring, and data loss prevention.

How should encryption keys be managed in cloud environments?

Use cloud-native key management services (AWS KMS, Azure Key Vault, Google Cloud KMS) with customer-managed keys (CMK). Enable automatic rotation, implement key access logging, and maintain separate keys per data classification level.

Does encrypting virtual machine disks count as encryption at rest?

Yes, VM disk encryption qualifies as encryption at rest for data within that VM. However, verify that backups, snapshots, and replicated volumes also receive encryption. Many VM backup solutions create unencrypted copies by default.

What's the performance impact of enabling encryption at rest?

Modern hardware acceleration reduces impact to 2-some for most workloads. Database encryption may show 10-a notable share of impact on complex queries. Vendors should provide performance benchmarks and demonstrate production environment testing.

How do we validate encryption at rest during vendor assessments?

Request configuration screenshots, encryption certificates, key rotation logs, and architecture diagrams. Include encryption validation in penetration testing scope. Review SOC 2 reports for control testing results and exceptions.