What is SOC 2? Types, Trust Criteria & Process

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SOC 2 helps companies prove they handle customer data securely. Learn what it is, who needs it, and how to get certified.

by Maitham Al Lawati

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What is SOC 2? Types, Trust Criteria & Process
Table Of Contents−

Key Takeaways

  1. SOC 2 is a security standard developed by the AICPA to evaluate how service providers manage customer data.
  2. SOC 2 Type I reviews controls at a specific point in time, while Type II assesses how well those controls work over several months.
  3. SOC 2 is based on five principles: security, availability, processing integrity, confidentiality, and privacy.
  4. SOC 2 reports can help businesses build trust, improve internal systems, and stand out in security-focused industries.

Businesses often rely on third-party vendors for services like cloud storage, payroll processing, customer support, or data analytics. But while a company can hand off certain tasks, it can’t hand off the responsibility. If a vendor mishandles sensitive data or fails to follow proper protocols, the consequences still fall on the business that hired them.

That’s why companies need evidence that the right controls are in place to protect data and maintain trust. The Service Organization Control (SOC) framework helps with this. Among the different types of SOC reports, SOC 2 is particularly relevant for companies offering tech-driven or cloud-based services.

What Is SOC 2?

SOC 2 is a voluntary compliance standard developed by the American Institute of Certified Public Accountants (AICPA). It helps service organizations prove they can be trusted with customer data and is especially important for technology companies and cloud-based providers that store or process data on behalf of others.

SOC 2 answers a simple but critical question: Can this company be trusted to protect information as it claims to? To do that, SOC 2 evaluates how a company’s internal controls align with five key areas, known as the Trust Service Criteria (TSC).

The 5 SOC 2 Trust Service Criteria

SOC 2 reports are built around how well an organization protects customer data based on these five trust principles:

Security

Security is the foundation of SOC 2 and centers on protecting your systems from unauthorized access, like a hacker trying to break into your servers or an intruder entering a restricted physical space. Companies need to show they’ve put up the right defenses, like firewalls, two-factor authentication, encryption, and physical locks.

The goal is simple: only the right people should be able to access sensitive data and systems.

Availability

Availability focuses on whether a company’s systems work when they’re supposed to. If a business promises 24/7 access to a service or platform, clients expect it to be reliable.

This part of SOC 2 checks if companies have plans in place to keep services running smoothly, manage traffic loads, and recover quickly from outages. It involves the use of backups, redundancies, and monitoring systems to minimize downtime and protect customer access.

Processing integrity

Processing integrity ensures that data is handled properly. That means no missing information, no duplicated transactions, and no unexpected delays. If a system processes payments, for instance, this criterion checks that each transaction is accurate, happens only once, and is completed on time.

Confidentiality

Confidentiality covers how a company safeguards information that’s meant to stay private. This could include internal reports, customer contracts, source code, or intellectual property. The focus here is on restricting access. Therefore, SOC 2 looks at how well the organization controls who can access what, whether through encryption, permissions, or secure storage.

Privacy

Privacy entails how an organization deals with personal information, like names, email addresses, financial details, or health records. SOC 2 checks whether the company collects, uses, stores, and deletes that data in ways that align with its stated policies and privacy laws.

Not every SOC 2 report covers all five areas as companies pick the ones that fit their services. But security is always included since it’s the foundation for every other principle in the framework.

SOC 2 Type I vs. Type II

There are two types of SOC 2 reports, and while they’re based on the same trust criteria, the way they assess a company’s controls is quite different.

SOC 2 Type I looks at whether the right systems and processes are in place at a single point in time. It’s mainly about design, not performance. Type I is often the first step for companies new to SOC 2 because it’s faster and less demanding, as well as helps demonstrate that the foundational structure exists.

SOC 2 Type II, by contrast, reviews how those controls actually function over an extended period of time, usually between three and twelve months. Instead of just describing what should happen, it checks whether the company consistently follows its own policies in everyday operations.

SOC 2 Type I SOC 2 Type II
Focus Design of controls Design and performance of controls
Timeframe Single point in time Over a period of 3 to 12 months
Purpose Shows controls are in place Shows controls are followed consistently
Effort Faster, less complex More in-depth, requires ongoing monitoring
Common Use Often the first step for new SOC 2 efforts Preferred for demonstrating long-term reliability
Trust Level Basic assurance Higher level of trust and credibility

Most organizations start with Type I to lay the groundwork, but Type II is the one that truly builds trust. That’s because it provides stronger evidence: not just that controls exist, but that they actually work.

Who Needs SOC 2 Compliance?

Businesses that handle customer data, especially in the cloud, are typically the ones that need SOC 2 compliance. Companies that offer software-as-a-service (SaaS), cloud infrastructure, or other tech solutions are often trusted with storing, processing, or transmitting sensitive data. That includes everything from login credentials and billing information to personal user details.

SOC 2 compliance helps businesses prove that they can be trusted to keep that data safe. For this reason, SaaS companies, cloud service providers, cybersecurity platforms, and other vendors offering cloud security solutions often pursue SOC 2 certification. They do so not because the law requires it, but because customers expect it.

In B2B sales, especially, SOC 2 has become a standard part of vendor security assessments. When enterprise clients are deciding which service provider to work with, they often ask for a SOC 2 report. Without one, the procurement process slows down, or, at times, stops entirely.

Benefits of SOC 2 Compliance

soc2

SOC 2 compliance is a stamp of approval and a way to strengthen your business from the inside out. It can help build trust and credibility, both with customers and partners. When clients see that you’ve passed an independent audit, they’re more confident in your ability to protect their data.

A SOC 2 report helps simplify business operations. It can accelerate vendor approvals by making security reviews and procurement processes more efficient. Preparing for certification also improves internal systems by identifying gaps in risk management, documentation, and incident response, allowing companies to strengthen their operations and reduce vulnerabilities.

In certain cases, SOC 2 reports can even create a competitive edge, especially in industries where security is a top priority. Naturally, in a market full of choices, clients are more likely to pick the company that can prove its safeguards are working.

How to Get SOC 2 Certified

At PowerDMARC, we’ve been through the SOC 2 certification process ourselves because we believe our customers deserve full confidence in how their data is handled. Our email authentication SaaS platform is SOC 2 certified (for both Type I and Type II), a result of our ongoing commitment to security and compliance.

If your organization is working toward SOC 2, the certification process typically involves:

  1. Initial review of your current controls to identify gaps in meeting SOC 2 requirements.
  2. Remediation to address those gaps by updating policies, improving system security, or formalizing internal procedures.
  3. Audit by a certified CPA firm to evaluate whether your controls meet SOC 2 standards, at a single point in time for Type I, or over several months for Type II.
  4. Report generation by the auditing firm, providing official documentation that can be shared with clients and partners under a non-disclosure agreement.

Common Challenges and How to Overcome Them

Nowadays, data security isn’t optional but expected. However, that expectation comes with pressure. Building the kind of systems and processes that pass a SOC 2 audit can be challenging, especially for smaller teams or growing startups.

Some of the most common issues companies face include:

  • Incomplete or outdated documentation
  • Missing internal processes or controls
  • Unclear ownership of security responsibilities across teams
  • Limited resources

To work through these challenges, start by putting someone in charge. Assign a person or a small team to lead your SOC 2 efforts so the process stays organized. For documentation, keep things simple: use clear templates for policies and make sure important records are easy to find and update.

If you’re missing key internal controls, focus on the basics first, like who has access to what, how you respond to security incidents, and how you monitor systems. And if you’re working with limited time or staff, look into tools that can automate parts of the process or consider bringing in a consultant to help you stay on track.

The Bottom Line

SOC 2 compliance gives you an immediate edge. As vendor-customer networks continue to grow and data security remains central to those relationships, a SOC 2 report has become a defining standard of trust. It signals that your business takes security seriously, operates with integrity, and meets the expectations of modern clients.

At PowerDMARC, we stand by our deep commitment to privacy, integrity, system reliability, and strong internal controls. We’ve done the work, so our clients don’t have to second-guess their security.

If you’re looking for a partner that takes compliance seriously, book a demo today and see how PowerDMARC helps secure your communications.

Frequently Asked Questions (FAQs)

How long does SOC 2 compliance take?

Most organizations complete the process in 6 to 12 months. However, it depends on how prepared they are and whether they’re going for Type I or Type II.

Is SOC 2 mandatory by law?

No, it’s not legally required, but many customers and partners expect it before doing business.

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