What is a SOC 2 Report? A Beginner’s Guide

When you choose a financial platform for your business, you’ll usually have to hand over employee names, bank credentials, vendor lists, payment histories, and in many cases the same data your tax accountant and auditors will need at year end. It can feel a bit spooky to give this information up. Many may wonder, “How does this provider actually protect our company’s data?”.

That is the exact question a SOC 2 report can answer. SOC 2 stands for System and Organization Controls 2, and it is one of the most widely used compliance frameworks in the United States for evaluating how a service provider handles customer data. A SOC 2 report is a detailed, independent audit produced by a CPA firm that documents the controls a provider has in place and tests whether those controls are working. For B2B fintech, healthcare technology, and SaaS, it has become a standard part of vendor due diligence.

In this guide, we explain what a SOC 2 report includes, outline the Trust Services Criteria, and show you how to evaluate a SOC 2 report yourself. We also cover how Slash’s controls align with the types of operational security that SOC 2 examines. With an integrated financial dashboard and an AI agent, Twin, your team gets enforced policies at the cardholder, account, and transfer levels, along with a real time view of activity across your accounts.¹

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What Is a SOC 2 Report?

A SOC 2 report is the result of an independent audit performed by a CPA firm using the AICPA’s Trust Services Criteria. It explains how a service organization’s system is designed, outlines the controls in place to protect it, and provides the auditor’s opinion on whether those controls are properly designed and, in some cases, operating effectively over time.

Organizations share this report with stakeholders to provide independent validation that their systems are properly secured. It shows that specific controls have been designed and tested to protect customer data, prevent unauthorized access, and ensure the service operates as intended. For customers, the report acts as evidence that the organization’s security practices are not just claimed, but verified.

A SOC 2 report typically includes:

A description of the service organization's system, including the services it provides and how it is structured
The Trust Services Criteria the audit evaluated
The controls in place to meet each criterion
The auditor's tests of those controls and the results
Management's assertion about the controls
The auditor's opinion (unqualified, qualified, adverse, or disclaimer)

Unlike a public certification or a stamp of approval, a SOC 2 report is a long form document, often 50 pages or more. The report is meant to be read by users who are evaluating whether the provider's control environment is safe enough to protect their data.

What Are the Five Trust Services Criteria?

SOC 2 reports are scoped against one or more of the Trust Services Criteria. Each criterion represents a category of controls the auditor evaluates. Every SOC 2 report must include Security. The other four are optional and depend on what the company says its system is responsible for. Here’s what each one covers:

Security

Security focuses on whether the system is protected from unauthorized access, both external and internal. This includes controls like authentication, user access management, network protections, and incident response. Every SOC 2 report includes this because it establishes the baseline for trust in the system.

Availability

Availability examines whether the system is reliably accessible as promised. This goes beyond uptime percentages and looks at the processes behind reliability, including system monitoring, capacity planning, infrastructure redundancy, and more. For a buyer, this criterion helps answer whether the product will consistently be there when your team needs it, and how the company prepares for outages or disruptions.

Processing Integrity

Processing Integrity focuses on whether the system processes data correctly from start to finish. This is especially important for platforms that move money, calculate balances, or transform data, where small errors can have real consequences. It gives you confidence that the system is not just secure, but also functioning as intended.

Confidentiality

Confidentiality covers how the organization protects sensitive information that is not meant to be publicly disclosed. This typically includes customer data, financial information, or proprietary business data defined as confidential in contracts. Confidentiality carries more weight for companies that handle sensitive documents and business data on a regular basis.

Privacy

Privacy applies specifically to personal information and how it is handled across its lifecycle. This includes how data is collected, used, shared, stored, and ultimately deleted, in line with the organization’s privacy policy and AICPA guidelines. Unlike confidentiality, which focuses on protecting sensitive business information, Privacy is about how user data is handled and whether those practices align with what the company tells users and regulators.

SOC 2 Type I vs Type II: What Is the Difference?

SOC 2 reports come in two types, with each asking a different question: are you looking at how controls are designed, or whether they have actually worked over time?

SOC 2 Type I: A Type I report evaluates controls at a single point in time. The auditor reviews how the system is designed and determines whether the stated controls are capable of meeting the Trust Services Criteria. However, it does not test whether those controls are consistently followed after the fact.
SOC 2 Type II: A Type II report includes everything in a Type I, but goes further by testing how controls performed over a defined period, usually six to twelve months. The auditor samples real activity, such as access reviews, approvals, or incident responses, and verifies that the controls were actually followed and operated as intended.

A Type I report gives you a snapshot of control design. A Type II report shows whether those controls were consistently executed. For that reason, most procurement and security teams treat Type II as the gold standard, especially for providers that handle sensitive financial or operational data.

Why Does a SOC 2 Report Matter When Choosing a Fintech Provider?

When your business connects a fintech platform to its bank accounts, payroll, AP system, and accounting platform, that provider becomes part of your operational footprint. A control failure on their side can directly affect your books, your reporting, and your customer or vendor relationships. SOC 2 reports give you a structured way to assess that risk before signing.

A few practical reasons SOC 2 matters for fintech evaluation:

Independent verification: The audit is performed by a third party CPA firm, not by the provider itself.
Coverage of operational controls: Beyond the technology, SOC 2 examines hiring practices, onboarding, access reviews, vendor management, and incident response. These controls often determine whether a security event becomes a breach.
Period of time evidence: A Type II report shows that controls have been operating consistently over many months, which is far more useful than a snapshot.
Common vendor risk language. SOC 2 has become a near universal vocabulary in vendor risk assessments, which makes it easier to compare providers on equal footing.

For regulated businesses, including those subject to HIPAA, GLBA, or state privacy laws, a SOC 2 report from a key fintech provider may also help support your own compliance obligations by giving auditors evidence that you have evaluated the provider's controls.

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Slash goes above with better controls, better rewards, and better support for your business.

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How to Read and Evaluate a SOC 2 Report

Most SOC 2 reports are pretty dense, but they’re approachable if you know what you’re looking for. Here’s a practical 5 step approach:

Identify the report type and scope: Find the auditor's opinion letter at the front. Confirm whether the report is Type I or Type II, which Trust Services Criteria are in scope, and what audit period the report covers.
Read the auditor's opinion: An "unqualified" opinion doesn’t mean your auditor is an amateur. “Unqualified” is essentially a passing grade, as it means the auditor found that the organization’s controls are designed correctly. A "qualified," "adverse," or "disclaimer" opinion means various issues may have been found.
Understand the system description: Read the system description (often Section 3 of the report) to understand what services and infrastructure are in scope. Make sure the services you plan to use are actually covered by the audit.
Review the control activities and test results: In a Type II report, check the control matrix for any places where the auditor noted exceptions. A small number of exceptions may be normal, while a pattern of recurring exceptions is probably a bigger issue.
Consider complementary user entity controls: SOC 2 reports usually include a section describing the controls you, as the customer, are responsible for (often called CUECs). Make sure your team is set up to handle those controls.

What Should You Look for in a Fintech Provider's Controls?

When reading the report through a fintech lens, the following control areas tend to matter most:

Access management: Single sign-on, role-based access, multi factor authentication (MFA), and timely deprovisioning when employees change roles.
Vendor management: The provider's own due diligence process for sub processors. A fintech is only as strong as its weakest material sub processor.
Monitoring and incident response: Logging of key events, alerting on anomalies, and a tested incident response plan. The report should describe how incidents are detected, fixed, and communicated to customers.
Change management: Documented change processes and the segregation of duties between developers and production deployment. This affects whether unauthorized changes can reach systems that hold your money.
Business continuity and disaster recovery: Backups, recovery time objectives, and tested failover. This is especially relevant for platforms that hold operating cash.
Customer side controls (CUECs): The controls you are expected to operate as the customer. Common examples include reviewing user access, approving outgoing transfers, and setting up MFA on every user account.

At the end of the day, SOC 2 reports are voluntary, meaning they aren’t legally required. Not every fintech company will have one available for review. If they don’t, you may examine its features to see if they align with SOC 2 compliance guidelines.

How Slash's Operational Controls Map to Fintech Compliance

Slash is a SOC 2 Type II certified financial provider, meaning our controls are not only designed appropriately but have been tested and verified over time.

Security and operational control are central to the platform. Every Slash account supports SSO, multi-factor authentication, role-based permissions, and detailed audit logging. You can also enforce controls directly through features like device management, ACH authorization rules, and transfer approval rules, which define who can move money, from where, and under what conditions.

We also provide real time visibility into account activity, including who has access, what actions were taken, and how funds are moving. This makes it easier to monitor controls continuously and maintain a clear audit trail. Other helpful Slash features include:

High-yield treasury: Earn up to 3.83% annualized yield on idle funds with money market investments from BlackRock and Morgan Stanley, managed directly within your Slash account.⁶
Accounting & ERP integrations: Sync transaction data with QuickBooks Online, Xero, or Sage Intacct to streamline reconciliation, reporting, and month-end close.
Native cryptocurrency support: Hold, send, and receive USD-pegged stablecoins USDC and USDT across eight supported blockchains for faster, lower-cost global payments.⁴
Diverse payment methods: Slash supports a wide range of payments, including card spend, global ACH, international wire transfers to over 180 countries via SWIFT, and real-time domestic payments through RTP and FedNow.
Global USD: The Slash Global USD Account is designed as an alternative for foreign founders who want access to USD without forming a US entity.³ Balances are backed by Slash’s USDSL stablecoin, which is matched one-to-one in value with the US dollar.

If you’re looking for a business banking platform that can streamline your financial operations while keeping your data safe, Slash might be exactly what you need.

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Frequently Asked Questions

Is SOC 2 a certification or a regulation?

Neither, technically. SOC 2 is an attestation report produced under an AICPA standard, not a certification or a government regulation. There is no "SOC 2 certified" status. A service provider engages a CPA firm to audit its controls and produce the report, and the report itself is the deliverable.

How long is a SOC 2 Type II report valid?

A SOC 2 Type II report covers a defined audit period (typically six to twelve months). There’s no official validity period, but many security teams treat a report as relevant for about twelve months from the end of the audit period. Some providers commit to an annual cycle so that a current report is available at all times, sometimes paired with a bridge letter that covers the gap until the next report is issued.

What is a SOC 3 report?

A SOC 3 report is a public-facing, high-level summary of an organization’s internal controls regarding security, availability, processing integrity, confidentiality, or privacy, based on AICPA Trust Services Criteria. Unlike detailed, restricted-use SOC 2 reports, SOC 3 reports are general-use, making them ideal for marketing security compliance to the public and potential customers.