SOC 2 Compliance: A Beginner’s Guide to Understanding Requirements in 2025

Data breaches are rising in both frequency and cost, putting pressure on organizations to prove they can protect client data. For SaaS providers, tech companies, and service organizations, SOC 2 compliance is no longer optional; it is essential.

In 2024, the global average cost of a data breach hit USD 4.9 million, a 10% increase from the previous year. This highlights the financial and reputational damage a breach can cause. SOC 2 compliance helps reduce these risks by ensuring that your data security practices meet industry standards.

This guide breaks down what SOC 2 compliance really means, how it works, and the steps your organization needs to take to get audit-ready. 

What Is SOC 2 Compliance?

SOC 2 (System and Organization Controls 2) is a framework developed to help service providers demonstrate their ability to manage customer data in a secure, confidential, and available manner.

This compliance standard is governed by the American Institute of Certified Public Accountants (AICPA). It is part of a broader set of reports designed to assess internal controls related to information systems.

When preparing for SOC 2 compliance, companies must choose between two types of reports. Each serves a different purpose depending on where you are in your compliance journey.

• Type I assesses whether the design of your controls meets the Trust Service Criteria at a specific point in time. It’s often the starting point for companies new to SOC 2.
  • Verifies that policies and procedures are in place
  • Demonstrates intent to protect data
  • Ideal for startups or companies preparing for their first audit
• Type II evaluates whether your controls operate effectively over a defined period, typically 3 to 12 months. It requires proof that processes are followed consistently.

• Proves control effectiveness over time
• Involves testing of evidence (logs, reports, audit trails)
• Essential for long-term vendor trust and regulatory scrutiny

Organizations early in the compliance journey and need fast validation for prospects usually choose Type I. Whereas, companies looking to build long-term client trust go for Type II, especially if they’re handling high-risk data or pursuing large enterprise deals.

Importance of SOC 2 Compliance 

Achieving SOC 2 compliance demonstrates a company’s commitment to maintaining high security standards and protecting customer information. Here’s why SOC 2 matters:

• Builds Trust with Customers: Achieving SOC 2 compliance shows customers that you take their data security seriously. It builds confidence, which is crucial in today’s data-driven economy where security breaches are common.
• Mitigates Security Risks: SOC 2 requires robust security measures, helping businesses identify vulnerabilities and prevent data breaches before they happen. It offers a proactive approach to risk management, which is vital in a rapidly evolving threat landscape.
• Enhances Business Reputation: SOC 2 compliance not only builds trust with customers but also enhances your company’s reputation in the market. It sets you apart from competitors who may not have the same level of commitment to security and transparency.
• Ensures Regulatory Compliance: For companies operating in regulated industries, SOC 2 compliance aligns with many regulatory requirements, such as HIPAA or GDPR, reducing the risk of penalties and legal issues.
• Improves Operational Efficiency: The process of becoming SOC 2 compliant involves refining internal controls and procedures, resulting in better organizational practices. It ensures that systems are secure, operations are streamlined, and data is consistently protected.

Also Read: How to Understand SOC 2 Compliance and Data Security Standards for EdTech

SOC 2 compliance not only strengthens your security posture but also creates a solid foundation for operational excellence. To fully understand what it takes to meet SOC 2 standards, let’s explore the five Trust Service Criteria (TSC) that form the core of SOC 2 compliance.

The 5 Trust Service Criteria (TSC) of SOC2

SOC 2 reports are built around five Trust Service Criteria defined by the AICPA. These criteria help evaluate how well an organization protects and manages customer data. While Security is mandatory for all SOC 2 audits, the remaining four are optional, selected based on the nature of the services provided.

1. Security

The Security criterion ensures that the systems and data of an organization are protected from unauthorized access. It includes key measures like access controls, intrusion detection, and employee training. Role-based access control (RBAC) and multi-factor authentication (MFA) are common practices that help ensure only authorized users can access sensitive information.

2. Availability

The Availability criterion ensures that systems are available and operational as promised in Service Level Agreements (SLAs). It includes systems for monitoring, failover capabilities, and a disaster recovery plan to ensure the business can recover quickly in the event of an issue. Real-time server monitoring and geographically redundant backups, for instance, help maintain uptime even during unexpected disruptions.

3. Processing Integrity

Processing Integrity focuses on ensuring that data is processed accurately, validly, and in a timely manner. This is essential for industries such as finance and e-commerce, where data errors can have serious consequences. Automated checks and real-time validation ensure that every transaction is properly processed before it’s finalized, reducing the risk of inaccuracies.

4. Confidentiality

The Confidentiality criterion is designed to protect sensitive data from unauthorized access. This includes implementing encryption and access controls to safeguard information from being exposed. 

For example, secure file-sharing platforms can restrict access to sensitive documents based on user roles, ensuring that only authorized individuals can view or edit confidential information.

5. Privacy

The Privacy criterion ensures that personal data is collected, stored, and disclosed in compliance with relevant privacy laws, such as the GDPR and CCPA. This includes implementing user consent prompts and data deletion protocols to ensure that personal information is used only for its intended purpose and removed when no longer needed.

Also read: AICPA SOC 2 Compliance: Key Trust Services Criteria & Latest Updates

Now, let’s explore how SOC 2 compares to SOC 1 and SOC 3 in terms of their focus and scope.

How is SOC 2 Different from SOC 1 and SOC 3

SOC 2, SOC 1, and SOC 3 are all part of the System and Organization Controls reports. But they serve different purposes and focus on various aspects of data security and organizational controls. 

Below is a breakdown of the key differences between these reports and the unique insights they provide.

SOC 1	SOC 2	SOC 3
Evaluates controls over financial reporting.	Evaluates security, availability, processing integrity, confidentiality, and privacy of data.	Provides a generalized summary of SOC 2 controls, for marketing purposes.
Focuses on financial reporting impact and controls that could affect clients’ financial statements.	Assesses data protection, how customer data is handled, and mitigates risks to privacy and security.	High-level overview of security and privacy practices without detailed testing.
Primarily for auditors of client companies reliant on the service provider’s financial data.	Clients, stakeholders, and others concerned with how data is secured and privacy is maintained.	Public, including potential customers or partners, as it is publicly available.
Detailed, including specific financial data and control evaluations.	Detailed, including control testing and assessment of security practices.	General, with no sensitive or proprietary information; provides a summary of SOC 2 controls.

Also read: Understanding Differences Between SOC 1, SOC 2 and SOC 3 Reports

SOC 2 Requirements and How to Prepare for Compliance

To achieve SOC 2 compliance, organizations must demonstrate that they have formalized, implemented, and maintained a set of internal controls aligned with the Trust Services Criteria. Below are some of the most common and critical requirements:

1. Define Your Scope

Identify which services, systems, and data fall under SOC 2. Define the boundaries of your audit, including applicable teams, vendors, and infrastructure. Focus on customer-facing systems handling sensitive data and determine which of the five TSCs apply to your business.

2. Policies and Procedures Documentation

Documented policies serve as the backbone of your compliance program. These cover areas like data handling, password protocols, acceptable use, and more. Auditors look for current, reviewed, and communicated policies that align with your trust criteria.

3. Conduct Risk Assessments

SOC 2 requires periodic assessments of potential threats that could affect data security or availability. This includes identifying internal and external risks, evaluating existing controls, and documenting mitigation plans.

Pro Tip: VComply’s Risk Management Software helps streamline recurring risk assessments and assign mitigation tasks across departments.

4. Access Control and Authentication

You need to show that access to systems and data is restricted based on role, necessity, and authorization. This includes multi-factor authentication, role-based permissions, and regular access reviews.

5. Incident Response

SOC 2 demands that organizations maintain a formal incident response policy, detailing how security incidents are identified, escalated, resolved, and documented. Teams must also retain logs and evidence of past incidents.

Related Read: How to Build an Effective Incident Management Process

6. Vendor Management

Auditors require proof that you evaluate and monitor the security posture of your third-party vendors. This includes onboarding checks, contractual safeguards, and ongoing reviews of vendor performance and risk.

Explore More: Vendor Risk Management Checklist

7. Train Employees and Stakeholders

• Conduct regular security training for all employees and stakeholders to ensure they understand their roles in protecting customer data.
• Ensure employees are familiar with escalation procedures and incident response protocols.

8. Gather Evidence and Maintain Audit-Ready Documentation

• Automate evidence tracking for logins, access changes, and compliance with SLA agreements.
• Store documents related to policies, incident logs, and risk assessments in an easily accessible, centralized system.

9. Select a Certified Auditor

• Choose a third-party auditor accredited by AICPA who specializes in SOC 2 audits.
• Provide the auditor with the necessary documentation, system details, and policies ahead of time.

10. Perform the SOC 2 Audit

The auditor will assess your controls and determine whether they meet the SOC 2 requirements. Address any findings and implement corrective actions as recommended by the auditor.

Challenges Faced During SOC 2 Audits and How to Overcome Them

SOC 2 audits are known for their rigor and demand for clear documentation, well-maintained controls, and audit-ready processes. Below are the most common challenges teams face.

• Incomplete or Outdated Documentation: If policies aren’t regularly updated or tracked with version control, they’re often out of sync with actual business practices, which creates confusion during audits.
• Misconfigured Access Controls: Without clear, structured access policies and continuous monitoring, organizations may find it difficult to demonstrate compliance with SOC 2’s access control requirements. This can lead to failed audits and security risks, as unauthorized personnel may have access to sensitive data.
• Manual Evidence Collection: Collecting evidence manually can be time-consuming, prone to inconsistencies, and error-prone. Teams often spend excessive time gathering documents like emails, screenshots, and meeting notes to prove compliance, which can delay audits and increase the risk of incomplete or inaccurate audit trails.
• Lack of Real-Time Monitoring: Without active monitoring, compliance gaps often go unnoticed until it’s too late, especially when systems are not being actively tracked for performance and effectiveness.
• Scalability Challenges: As organizations grow, managing compliance and risk management across an expanding team or third-party vendors becomes increasingly difficult. Onboarding new users or managing compliance manually becomes unsustainable and error-prone.

Also read: SOC2 Audit Assessment Readiness And GRC Platform’s Contribution

Here’s how you can overcome them.

SOC 2 Best Practices for Successful Compliance

Below are some of the best practices for managing and sustaining SOC 2 compliance:

• Centralize documentation in a system that supports version control, update logs, and clear ownership. Make sure policies are directly mapped to their respective controls and can be quickly retrieved during an audit.
• Define and enforce role-based access controls with clearly documented permissions. Maintain real-time logs of access changes and conduct periodic reviews as part of your security protocol.
• Automate control testing and evidence gathering whenever possible. Link proof of compliance directly to individual controls and store it in a structured, searchable format.
• Use dashboards to track control performance, missed deadlines, and unresolved risks. Regular status checks and automated alerts help identify issues before they escalate.
• Choose flexible systems that can scale with your organization. Make sure compliance processes like policy distribution, control assignments, and evidence tracking are repeatable across teams.

Adopting these best practices will streamline your SOC 2 compliance process and make it easier to maintain over time.

Simplify Your SOC 2 Compliance Journey with VComply

VComply’s ComplianceOps streamlines your risk and compliance management by centralizing everything in one platform. It eliminates manual processes and ensures timely action through automated alerts and customizable workflows.

Key Features:

• Dashboards and Reporting: Get real-time, customized dashboards and reports focused on your key compliance metrics. Improve accuracy and decision-making with tailored insights.
• Notifications and Alerts: Set up automatic alerts for timely actions and compliance deadlines. Stay on track with minimal manual effort.
• Evidence Management: Centralize all your compliance documents in one secure place, with role-based access to ensure you’re always audit-ready.
• Eliminate Manual Processes: Automate workflows and evidence collection, saving time for more critical compliance tasks.

Ready to reduce audit friction and gain visibility across your SOC 2 program? Request a Free Demo and see how VComply can streamline your audit preparation process.

Final Thoughts

SOC 2 compliance is not just about ticking boxes. It reflects your organization’s commitment to securing customer data and maintaining operational trust. However, achieving and sustaining compliance requires more than good intentions. It calls for coordinated processes, audit-ready documentation, and clear ownership.

VComply helps make this process easier. From assigning controls and tracking progress to generating real-time dashboards, it brings structure and automation to your compliance workflows.

Start your free trial today and see how VComply streamlines SOC 2 compliance from day one.