Choosing the right security and compliance framework is a critical decision for businesses handling sensitive data. SOC 2 and ISO 27001 are two of the most widely recognized frameworks for demonstrating security and compliance, but they serve different purposes and audiences.
Understanding the differences between SOC 2 and ISO 27001 can help you determine which one aligns best with your organization’s needs. This guide breaks down their key differences, benefits, and use cases to help you make an informed decision.
SOC 2, or Service Organization Control 2, is a compliance framework developed by the American Institute of Certified Public Accountants (AICPA). It focuses on how service providers handle and protect customer data based on five Trust Services Criteria:
SOC 2 is designed for cloud-based service providers, SaaS companies, and technology vendors that handle customer data. Many B2B customers require vendors to be SOC 2 compliant before entering into contracts.
Compliance is verified through an independent audit conducted by a CPA firm. There are two types of SOC 2 reports. A SOC 2 Type I report evaluates the design of security controls at a single point in time, while a SOC 2 Type II report evaluates the effectiveness of controls over a period of time, usually three to twelve months.
Since SOC 2 audits are customized based on the five Trust Services Criteria, no two SOC 2 reports are exactly the same. Organizations choose which criteria to include based on their specific business model and customer expectations.
ISO 27001 is an international standard for Information Security Management Systems (ISMS), developed by the International Organization for Standardization (ISO). It provides a structured framework for managing and improving security across an organization.
ISO 27001 is built around a risk-based approach to information security. Organizations that follow ISO 27001 must define security policies, identify security risks, conduct risk assessments, implement security controls to mitigate risks, and continuously monitor and improve security practices.
ISO 27001 is ideal for companies operating in global markets, including financial institutions, healthcare organizations, large enterprises, and government contractors. Unlike SOC 2, which is primarily a U.S.-centric framework, ISO 27001 is recognized worldwide, making it a better choice for organizations with international clients.
Certification requires an external audit by an accredited ISO certification body. The certification is valid for three years, with periodic surveillance audits to ensure ongoing compliance.
SOC 2 focuses on customer data security and trust, while ISO 27001 provides an organization-wide security management system. SOC 2 is common among SaaS, tech, and cloud providers, while ISO 27001 is widely used across industries such as finance, healthcare, and government.
Geographically, SOC 2 is primarily recognized in the United States, while ISO 27001 is accepted globally. The SOC 2 framework allows companies to choose which Trust Services Criteria to include in their audit, whereas ISO 27001 follows a structured ISMS approach.
The audit process also differs. SOC 2 compliance is evaluated by a CPA firm and must be renewed annually, while ISO 27001 certification is conducted by an accredited ISO auditor and remains valid for three years with annual surveillance audits.
SOC 2 is the right choice if you are a SaaS company, cloud provider, or technology vendor that handles customer data. If your customers require SOC 2 compliance as part of vendor security requirements, it is the more practical option. SOC 2 is also better suited for companies that operate mainly in North America and need a security audit that aligns with U.S. business expectations.
ISO 27001 is the better choice if your company operates in global markets or regulated industries like finance, healthcare, or government. It provides a structured, organization-wide security framework beyond just customer data protection. Businesses that require a long-term security management strategy with a three-year certification cycle will benefit more from ISO 27001.
Some companies choose to pursue both SOC 2 and ISO 27001 to satisfy different customer and regulatory needs. If you serve both U.S. and international clients, having both certifications may provide a competitive advantage.
Both SOC 2 and ISO 27001 demonstrate a commitment to security, trust, and compliance. Choosing the right one depends on your industry, customer expectations, and geographic market.
Investing in compliance strengthens customer relationships, reduces legal risk, and enhances your competitive advantage. If you need help navigating SOC 2 or ISO 27001 compliance, working with a compliance expert can streamline the process and ensure a smooth audit experience.