How Do I Choose Between SOC 2 and ISO 27001?

Satya Moutairou

18 Oct 2021

We’ve been asked this question so many times that we figured we should do a post on the subject. Before we go into the details of which is best suited for your business, let’s start by providing a brief overview of each one.

SOC 2 is the most widely adopted and requested compliance attestation for SaaS vendors in the United States. It is a framework that guides companies in providing a safe operating environment to manage sensitive data. If you’re wanting to dig deeper into SOC 2, have a read through our post “Introduction to SOC 2: The Only Guide You’ll EVER Need.”

ISO 27001 is a globally recognized framework, part of the ISO/IEC 27000 series, for governing an organization’s information security program by providing a clear set of requirements for an Information Security Management System (ISMS). If you’re wanting to learn more about ISO 27001, here’s a link to our post “Introduction to ISO 27001: The Only Guide You’ll Ever Need.”

What is an ISMS?
ISMS stands for Information Security Management System, and is a collection of documents including policies, processes, procedures, and controls that together implement an effective risk management process.

While there are major differences between the two, the reality is that both SOC 2 and ISO 27001 are recognized frameworks that help you showcase your commitment to data security. Interestingly, however, there is a fair amount of overlap in controls and policies, so completing one gets you closer or along the path to achieving compliance with the other. The SOC 2 report, for example, can be viewed as one of the outputs from ISMS implementation.

Let’s get back to the question at hand. You are, after all, wondering which framework your organization should pursue. The answer to that is quite simple: it depends.

The reality is that there are several considerations to factor into your decision. Let’s explore some of these…

Your Organization
SOC 2 was designed to be uniquely applied to service organizations from any industry.
Service organizations are defined as “the entity (or segment of an entity) that provides services to a user organization that is part of the user organization’s information system” Plainly put, SOC 2 requirements are best suited to technology companies that store client information in the cloud. So, if you are a SaaS provider, or a business that provides cloud services, SOC 2 may be the route to go.

ISO 27001 is designed for organizations of any size, type, nature, or industry. It is therefore applicable to companies of any size who are looking to ensure that the data they generate or store is secure.

The location of your current or prospective customer base is an important deciding factor in choosing between SOC 2 and ISO 27001. If you are looking to do business internationally and have an international customer base, pursuing an ISO 27001 would be more suitable. In Europe, ISO 27001 is more widely recognized than SOC 2.

If your sales efforts and customer base is more focused on the United States, you may find SOC 2 to be more beneficial.

If time is a factor (maybe because an important sales deal hangs in the balance or you’re wanting to get a product to market quickly), you might want to consider picking a framework that allows you to showcase something quickly while you work towards complying with more complex requirements.

It’s also important to understand the certification and preparation process if time is an important consideration. A SOC 2 Type I report can be achieved quite quickly because it demonstrates that a particular control is verified at a point in time, and is ideal if you’re needing to prove compliance quickly, while you work towards receiving a Type II attestation (the Type II report typically includes an observation period of 3 – 6 months).

ISO 27001 certification is a lengthy process and involves a 3-year commitment that includes a point-of-time audit in year one and surveillance audits in subsequent years. The point of time audit itself is a three stages process involving a Stage 1, Stage 2, and application for certification. In general, ISO 27001 requires more time than SOC 2.

If you’re using a compliance automation tool, you can cut down your preparation time significantly. We’ve helped many customers become audit-ready in 2 – 3 months, by auto-generating the controls, policies, and tests needed to showcase compliance. If you’re wanting to get a better understanding of how to prepare for an audit, you can check out our posts: How to Prepare for a SOC 2 Audit and How to Prepare for an ISO 27001 Audit.

Given the comprehensive nature of the requirements for ISO 27001, it typically costs 40% – 50% more than SOC 2.

Regardless of whether you decide to go with SOC 2 or ISO 27001, you will be demonstrating to all stakeholders that you are committed to providing a secure environment for your customers’ and employees’ data.