What is SOC 2 Compliance?
As businesses face growing security threats and data privacy concerns, SOC 2 (System and Organization Controls 2) compliance has become a key standard for proving strong security practices.
Created by the American Institute of CPAs (AICPA), this framework validates how well organizations protect customer data and manage sensitive information through an auditing process that examines both technical systems and organizational security measures.
SOC 2 was first published in 2011 and was mainly created due to the following needs:
1. Shift to Cloud Computing:
As businesses increasingly adopted cloud services and outsourced IT operations, traditional audit frameworks like SAS 70 (focused on financial reporting) were no longer sufficient to address the growing risks around data security and privacy.
2. Need for Data-Centric Controls:
Organizations needed a framework that specifically evaluated how service providers managed and protected customer data, focusing on areas beyond financial controls, such as security, availability, and privacy.
3. Addressing Third-Party Risk:
With the rise in data breaches and cybersecurity threats, companies needed a way to assess the risk posed by their vendors and partners. SOC 2 reports became essential for third-party risk management programs.
For SaaS companies, cloud providers, and data analytics firms, SOC 2 compliance often determines their ability to demonstrate organizational maturity, build client relationships, and win contracts.
With data breaches potentially costing millions in damages, SOC 2 certification shows stakeholders that an organization has invested in protecting their information, systems and processes through verified security controls and proven practices.
The Five Trust Services Criteria
SOC 2 certification centers on five key Trust Services Criteria, each addressing specific aspects of data security and system operations. Organizations can choose to be attested on any combination of these criteria based on their business needs and client requirements.
Security (Common Criteria)
The foundation of SOC 2, also known as the Common Criteria, focuses on protecting systems against unauthorized access. It covers network security controls, data encryption practices, access management systems, security incident handling, and regular monitoring with alerts.
This criterion sets the baseline for all SOC 2 audits and must be included regardless of which other criteria an organization chooses to pursue.
Availability
This criterion ensures systems remain operational and accessible as committed to users. Organizations must prove they maintain system performance monitoring, implement robust disaster recovery procedures, and manage backup systems effectively.
Processing Integrity
When organizations handle data processing, this criterion verifies that systems work as intended - processing data accurately, completely, and on time. It examines quality assurance processes, monitoring systems, and methods for detecting and correcting errors throughout the data lifecycle.
Confidentiality
Organizations handling sensitive information need strong controls to protect data meant for specific parties. This involves:
- Data classification methods
- Access restrictions
- Secure data transmission
- Confidential information handling
- Disposal procedures
Privacy
The privacy criterion addresses how organizations collect, use, retain, and protect personal information. It ensures companies follow their privacy notices and meet the AICPA's privacy principles.
This becomes particularly important for businesses handling customer data across different regions and regulatory frameworks.
Working Together
These criteria create a flexible framework that adapts to different business needs. For example, a SaaS startup might begin with Security and Availability, then add Processing Integrity as they scale.
SOC 2 Type I vs Type II
SOC 2 offers two types of reports: Type I assesses an organization's systems and controls at a specific point in time, while Type II examines these controls over a period (typically 6-12 months).
Think of Type I as a snapshot of your security practices and Type II as a video showing how well you maintain these practices over time.
Type I serves as a good starting point for companies beginning their compliance journey, letting them validate their security setup quickly. Meanwhile, Type II provides deeper assurance to clients, as it proves consistent, reliable security practices.
The choice between Type I and Type II often comes down to business needs and client requirements. Type I typically takes 2-3 months to complete and costs less, making it suitable for startups or companies needing to show basic compliance quickly. Type II, while requiring more time (6-12 months) and investment, has become the preferred standard for most enterprise clients.
The SOC 2 Certification Process
Preparing for SOC 2 compliance typically follows a structured path that begins well before the audit itself. Most organizations start with a readiness assessment—an internal review to evaluate their current security controls and identify any gaps. This early groundwork is essential to avoid surprises later and keep the audit process on track.
The audit itself unfolds in two main phases. First, auditors review your documented policies and procedures. Then they move to assess how those controls function in the real world—through team interviews, system walkthroughs, and evidence collection.
While the overall process is consistent across organizations, how it's handled can vary. For instance, Apono spent time upfront organizing their documentation and refining their security posture, which helped reduce their audit timeline from months to just a few weeks.
Benefits and Business Impact
SOC 2 compliance brings measurable value to organizations, going beyond basic security compliance. When SecuriThings achieved their compliance, they reported faster sales cycles and stronger client relationships, turning what could have been a bureaucratic hurdle into a business advantage.
Here are the key ways SOC 2 compliance drives business growth:
- Sales teams close deals faster as the compliance helps automate security questionnaires and answers requirements upfront. Aidoc cut their questionnaire response time by 92% after certification, streamlining what used to be a manual, time-consuming process.
- Trust becomes automatic with enterprise clients. Rather than providing security practices from scratch for each prospect, certified companies start conversations from a position of verified credibility.
- Risk management improves through structured security practices. The certification process helps identify and fix security gaps before they become problems, protecting both revenue and reputation.
- New market segments open up, particularly in regulated industries. Orca Security found that SOC 2 compliance gave them access to financial and healthcare clients who wouldn't have considered them otherwise.
- Vendor assessments become straightforward, as the certification provides a standardized way to prove security practices. This matters increasingly as companies face stricter requirements for their entire supply chain.
SOC 2 certification isn't just about meeting security standards—it's about transforming compliance into a competitive advantage.
Companies that invest in SOC 2 compliance often find it pays for itself through faster sales cycles, stronger client relationships, and access to new market opportunities. The right approach to compliance can turn security requirements from a burden into a powerful business driver.
Modern SOC 2 Compliance Management
Managing SOC 2 compliance has evolved from manual spreadsheets and scattered documents to smart, automated solutions. Today's tools help teams tackle the most time-consuming parts of compliance, from handling security questionnaires to tracking system changes in real-time.
Security teams often spend countless hours responding to questionnaires and managing documentation. Modern automation tools transform this process by streamlining responses to common security questions and centralizing evidence collection.
Organizations using these solutions have reduced their questionnaire response time from weeks to hours, freeing their teams to focus on core security tasks.
Modern compliance tools offer continuous monitoring capabilities that alert teams to potential issues before they affect compliance status. This proactive approach helps maintain certification year-round, rather than scrambling before audit time.
Through automated monitoring to track system changes and maintain compliance documentation, organizations make their annual SOC 2 assessments smoother and more predictable.
Taking Action on SOC 2 Compliance
SOC 2 certification plays a vital role in building trust and winning business in today's market. This framework, created by AICPA, has become essential for organizations handling customer data, particularly in the SaaS and cloud services space.
Through five key Trust Services Criteria—Security, Availability, Processing Integrity, Confidentiality, and Privacy—SOC 2 provides a structured approach to proving security practices.
Organizations can start with Type I certification for a point-in-time assessment before moving to the more comprehensive Type II certification. The process becomes streamlined with modern automation tools, and platforms like Vendict help teams cut questionnaire response times from weeks to hours while maintaining accuracy.
By automating routine tasks and providing continuous monitoring, SOC 2 certification transforms from a compliance checkbox into a business advantage that drives growth through faster sales cycles, stronger client relationships, and new market opportunities.
