How South Africa's Joint Standard 2 Changes the Data Compliance Landscape

South Africa’s Joint Standard on Cybersecurity & Cyber Resilience (JS2) is reshaping the regulatory landscape. Financial institutions must now rethink how they manage sensitive data. For data compliance leaders, this marks a critical shift where failing to adapt could bring serious consequences.

This blog will examine what JS2 means for your organization’s data compliance efforts. Then, discover how Perforce solutions can help you in building a resilient data compliance program.

What Is South Africa’s Joint Standard 2 (JS2)?

Joint Standard 2 is a regulatory rule that guides how financial institutions protect and manage sensitive data. It requires banks and other financial companies to implement strong data security measures. They are also required to regularly audit their systems and report any data breaches or security incidents.

JS2 was published by the Financial Sector Conduct Authority (FSCA) and the Prudential Authority (PA) on 17 May 2024. 

 With the JS2 compliance deadline of 1 June 2025 now behind us, South African financial institutions face a new era of strict regulatory oversight. Organizations must demonstrate cyber resilience through robust data protection measures. Implementing strong technical solutions is essential to avoid penalties and protect against evolving cybersecurity threats.

What Do Data Compliance Leaders Need to Know About South Africa’s Joint Standard 2 (JS2)?

JS2 marks a major shift in how South Africa regulates financial data. Protection of Personal Information Act South Africa (POPIA), the previous data protection law, was not always enforced consistently. But JS2 will be different. 

Banking regulators now have clear authority and are ready to issue severe penalties for violations. This is not just another item on a compliance checklist. It is a regulation with real consequences. Enterprise leaders will need to rethink both data privacy compliance strategies and technical systems to meet these new requirements.

Cybersecurity threats make JS2 compliance even more critical. While companies may trust their employees, compromised employee credentials remain a common route for hackers to access systems. Since 80% of database attack surfaces lie in non-production copies, these systems must be properly protected with data masking and pseudonymization. JS2's emphasis on comprehensive data protection across all environments directly addresses these vulnerabilities.

The EU’s Digital Operational Resilience Act (DORA) offers a useful frame of reference for understanding JS2. Both regulations emphasize data protection. Like JS2, DORA also emphasizes third-party risk management and requires businesses to maintain strong incident response strategies. Failure to do so results in hefty penalties. However, JS2 is specifically tailored to South Africa's financial sector.

Who Needs to Comply with JS2?

JS2 applies primarily to financial institutions that operate within South Africa. If your organization is based in South Africa or provides financial services in the country, you may be required to comply.

Your organization must follow JS2 regulations if it is one of the following:

• An insurer.
• An over-the-counter (OTC) derivatives provider.
• A collective investment scheme (CIS) manager.
• A retirement fund.
• A Category 1 financial service provider (FSP).

But compliance doesn't stop there. If a third party handles your data or systems, they must meet the same standards.

Third-party suppliers include:

• Cloud providers
• Fintech partners
• Outsourced IT vendors

JS2 is not necessarily enforced on entities in other countries. But you will still be responsible if your supplier does not have proper service-level agreements in place. Non-compliant South African entities could still face enforcement action.

How Can Your Organization Comply with JS2?

Getting compliant with JS2 requires action across four key areas.

Data Masking and Anonymization

Your organization must consistently discover and mask sensitive data such as PII (personally identifiable information) or PHI (personal health information). These should be used across all your development, testing, analytics, and AI environments. This step protects sensitive customer data while ensuring high-quality test results. It also maintains regulatory compliance and prevents data breaches in non-production systems.

Data Compliance Frameworks

You must establish clear policies for how you access, use, and retain data. These policies should align not only JS2 requirements, but also overlapping regulations like POPIA and DORA.

A solid framework includes:

• Data classification and retention schedules.
• Access controls based on user roles.
• Encryption for data at rest and in transit.
• Audit trails to demonstrate compliance.
• Defined roles, such as data stewards or compliance officers.

Review and update your framework regularly, ensuring it also covers third-party providers.

Third-Party Data Risk Management

Every vendor and data sharing agreement must meet JS2 standards. You're responsible for ensuring your partners protect data the same way you do.

To manage this risk effectively:

• Conduct due diligence and risk assessments before onboarding vendors.
• Ensure contracts include JS2-aligned data protection terms, audit rights, and breach notification clauses.
• Require vendors to implement controls like encryption, access restrictions, and audit logging.
• Monitor vendor compliance regularly through audits or automated tools.

Third-party risk isn’t static. Maintaining oversight is key to staying compliant and secure.

Incident Response

Under JS2, you will need rapid response plans for data breaches or other security incidents. If issues occur, you must be ready to act quickly to rectify the situation. You will also need to prepare documentation as proof.

This includes:

• Fast detection, containment, and recovery steps.
• Clear roles, escalation paths, and communication protocols.
• Regulatory reporting within required timeframes.
• Detailed documentation to prove actions taken and outcomes.

Test your plan regularly through simulations. Retain all incident reports, root cause analyses, and remediation actions as part of your compliance records.

Adapting Data Compliance Programs for JS2

JS2 goes beyond basic privacy protection. You will need to combine data protection with operational resilience. This means your data compliance program must do more than protect sensitive information. It also needs to ensure your business can continue operating during system failures, cyberattacks, or third-party service disruptions.

This means implementing:

• Real-time monitoring of all your systems to detect incidents when they happen.
• Automated compliance checks that run continuously.
• Detailed audit trails that support both regulators and your internal operations team.

The goal is to create a compliance program that protects sensitive data while keeping your business running smoothly.

What is at Stake Under JS2 Enforcement?

JS2 enforcement marks a new era of strict regulatory oversight in South Africa’s financial sector. Organizations face serious consequences if they fail to meet these heightened data protection standards.

What Should Data Teams Expect from Regulatory Authority and Enforcement?

Unlike with POPIA, regulators are actively enforcing JS2. Expect to see the following:

• Strict audits with heavy documentation requirements.
• Increased scrutiny of how you use data protection tools.
• Personal accountability for compliance officers.

Compliance Risk Management: What are the Organizational Consequences?

JS2 is intended to ensure that your business is resilient to cyber threats and that you establish provision for recovery as well as prevention. While there are no specific penalties defined for non-compliance to JS2, there are several risks that will directly impact your organization. 

These risks include:

• License suspension or withdrawal, which could shut down your operations entirely.
• Administrative fines that can reach substantial amounts based on recent enforcement patterns.
• Enforceable undertakings that legally bind your organization to specific compliance actions.
• Public warnings that damage your reputation and customer trust.
• Mandatory third-party audits of your data governance frameworks and technical controls.
• Operational delays that affect your analytics, AI initiatives, and digital transformation projects.

54% of Organizations Experienced a Data Breach in Non-Production

Why? It's likely related to data compliance exceptions granted by 86% of organizations we surveyed last year. 

Staying compliant under Joint Standard 2 can be challenging. It is especially difficult when sensitive data spreads across multiple non-production environments. These non-production areas are often overlooked, making them a common source of risk.

Data breaches remain an ever-growing threat. But many organizations continue to allow risky exceptions. So, how are they managing these compliance gaps — and why do the risks persist?

Get the answers in our State of Data Compliance and Security Report.

Get Insights for Stronger Compliance

3 Steps to Align JS2 Compliance with Business Strategy

Data compliance leaders must go beyond checklists. Success requires aligning JS2 mandates with your strategic objectives. These objectives may include operational resilience, digital transformation, and responsible AI adoption.

This executive-level roadmap outlines how to prioritize and lead organizational change.

Step 1: Define Strategic Compliance Priorities

You can start by mapping JS2 requirements to your existing business continuity and digital strategy goals. 

You will need strategic priorities that enable both compliance and innovation:

• Identify high-risk data environments, especially development, testing, and analytics systems.
• Implement adaptive masking solutions that provide high-quality data for AI and digital initiatives.
• Ensure masked data passes application and industry validation rules.
• Set enterprise-wide objectives for secure data access that do not compromise digital transformation goals.
• Align compliance goals with business values.

Step 2: Secure Cross-Functional Buy-In

Cross-functional ownership is critical in establishing effective JS2 controls. Siloed approaches will fail. 

Success requires partnerships that:

• Foster dialogue and shared objectives mediated by third parties and senior stakeholders.
• Establish clear leadership roles that bridge technical, business, and regulatory knowledge gaps.
• Create governance structures where security teams understand application requirements and business context.
• Ensure development teams have input on practical masking approaches that maintain system functionality.
• Get executive support for compliance initiatives that enhance business capability.
• Conduct collaborative workshops that unite security, development, and business stakeholders.

Step 3: Manage Change Across the Organization

The fastest way to compliance is to begin the journey now. Take stock of your existing tools and their limitations, and what you can achieve. Then set a broad agenda with an initial, objective timeline. 

Choose your first application based on:

• Your internal knowledge and expertise.
• Infrastructure and software you own with access to expert resources.
• Tooling that allows quick iteration and provides reusable building blocks for onboarding other applications.
• An application that is small in size but representative of your sensitive data landscape.

Assemble a small, dedicated team of capable individuals. This team should include key experts across your infrastructure, application, and data business landscape.

When executing your phased approach, be sure to:

• Run for a period. Be prepared to adjust and learn from your mistakes.
• Refine your standards and objectives based on lessons learned.
• Roll out systematically across all your applications.
• Apply workarounds for difficult applications and prioritize easier projects.
• Celebrate your successes and what it means for your business.

Throughout this process, be sure to:

• Allocate proper budget and resources for ongoing compliance investment.
• Define KPIs to track your compliance posture and maturity.
• Build flexible compliance frameworks that can adapt to future regulations and emerging AI technologies.
• Articulate how this effort links to your overall business and customer success.

Remember, JS2 compliance is not a destination but an ongoing journey. It will require continuous adaptation and improvement to stay ahead of evolving regulatory and business requirements.

Simplify JS2 Compliance with Perforce

Joint Standard 2 demands strict data protection, especially in non-production environments. The right tools can help you stay compliant without sacrificing development speed or quality.

Perforce Delphix for Fast, Secure, and Compliant Data

If you work with sensitive customer information, you will be subjected to strict data regulations like JS2. Perforce Delphix helps teams stay compliant by removing the risks tied to using real data in development, testing, and analytics. Instead of exposing sensitive data, Delphix replaces it with secure, masked data. Empower your teams to move fast without putting privacy at risk.

Address Core Data Compliance Challenges:

• Eliminate Data Risks: Automatically find and mask sensitive data across all your systems. With Delphix, 77% more data and data environments are masked and protected.*
• Remove Data Bottlenecks: Replace slow, manual work with automated tools that find and protect data. What used to take weeks or months can now be done in days, helping your team work quickly.
• Ensure Data Quality: Deliver high-quality, compliant data that stays accurate and useful, so your software works the way it should.

Key Capabilities:

• Advanced Sensitive Data Discovery (ASDD) uses customizable policy rules
• that can be tuned to your specific regulatory policies.
• Customizable masking frameworks with centralized policy management. It can be deployed globally across hybrid cloud environments.
• Audit-ready controls and secure data delivery pipelines for regulatory compliance.
• Role-based access controls and approval workflows for changes to masking rules.
• Comprehensive API integration with existing data governance and monitoring tools (ServiceNow, Collibra). API toolkit for seamless workflow automation.
• Enable enterprise-scale deployment with a distributed setup. Build masking algorithms centrally for consistency and control. Then deploy them to engines located near your data across global operations.
• Hyperscale processing capabilities for high-volume data masking requirements. Ensure fast performance even with large datasets.

Mask Data for SAJS2 Compliance

Puppet for Enforcing Infrastructure Compliance at Scale

Keeping your IT systems secure and meeting compliance regulations can be challenging, but Puppet helps make it easier. Puppet works with your existing tools and processes, so there’s no need to start from scratch. Puppet also supports key security standards like JS2, helping you automate updates and stay secure without extra effort.

With Puppet, you define how your systems should be configured — the settings and controls that bring your organization into compliance — and Puppet keeps them that way. It monitors your environment and automatically fixes any configuration issues it finds. You also get clear, easy-to-understand reports that show how your systems are following security rules for easier compliance audits. This helps protect your data and keeps everything running smoothly — so you can focus on what matters most.

Explore Puppet solutions for simplifying data security and compliance today.

Request a Puppet Demo

*IDC Business Value White Paper, sponsored by Delphix, by Perforce, The Business Value of Delphix, #US52560824, December 2024