What's Inside

Recent data shows that 34% of companies have lost business due to a missing certification. This underscores the competitive edge that security frameworks like SOC 2 and ISO 27001 can provide.

Today, we’ll take an in-depth look at these two globally recognized standards, which play a pivotal role in safeguarding sensitive data and establishing robust security practices. We’ll explore the key aspects of both ISO 27001 and SOC 2 and examine their objectives, scopes, and methodologies. Along the way, you’ll discover how each framework fits different organizational needs—whether you’re a cloud-based SaaS in the U.S. or a global enterprise navigating multiple regulatory requirements.

By the end of this article, you will have a thorough understanding of the advantages and applicability of both ISO 27001 and SOC 2. This knowledge will enable you to make well-informed decisions about which standard best matches your organization’s specific needs and objectives. This could include complying with regulatory requirements, bolstering customer confidence, or safeguarding critical data assets.

What is SOC 2?

SOC 2 (System and Organization Controls 2) is an attestation report that evaluates how a service organization manages customer data based on five key principles:

• Security

• Availability

• Processing integrity

• Confidentiality

• Privacy

These are collectively known as the Trust Services Criteria (TSC). This framework was developed by the American Institute of Certified Public Accountants (AICPA) and is commonly used by SaaS companies and cloud service providers to demonstrate strong security practices.

While not legally required, many businesses require SOC 2 reports from vendors before signing contracts. It has become a key factor in building trust and winning new customers because a SOC 2 audit independently verifies that an organization has effective internal controls in place to safeguard data and mitigate risks.

What is ISO 27001?

ISO 27001 is an internationally recognized standard for establishing, maintaining, and continuously improving an Information Security Management System (ISMS).

Developed by the International Organization for Standardization (ISO) and the International International Electrotechnical Commission (IEC), this framework provides a risk-based approach to managing information security that helps organizations systematically assess and reduce threats to confidentiality, integrity, and availability of data.

Unlike SOC 2, which focuses on assessing security controls, ISO 27001 requires companies to proactively identify risks and implement a continuous improvement process to strengthen security over time. It’s especially valuable for international companies and enterprises handling large-scale data, like fintech and healthcare organizations.

SOC 2 and ISO 27001: Similarities

The SOC 2 report and ISO 27001 certification have the following similarities:

• They provide independent assurance about all the controls of the organization offering a service for which they were designed and implemented to meet a specific set of requirements or criteria.

• They help organizations meet regulatory and industry requirements, like GDPR, HIPAA, PCI DSS, and NIST.

• They allow a service company to gain a significant advantage over its competitors.

• They require ongoing compliance and continuous improvement.

SOC 2 and ISO 27001: Differences

Despite these similarities, the SOC 2 report and ISO 27001 certification exhibit distinct differences in several key areas.

Compliance Requirements

The SOC 2 examination reviews the internal controls over the system, which may include one or more services offered by the company. It specifically assesses policies governing the systems, procedures, system security measures, and change management practices to determine how well an organization protects customer data. Compared to ISO 27001, which certifies an entire security framework, SOC 2 reports are tailored to the specific services and systems an organization wants to audit.

Meanwhile, ISO 27001 certification considers the relevant control activities in terms of the support they receive and focuses on greater risk in terms of information security across various domains, including:

• Physical security

• Human resources

• Asset management

• Supplier relations

This is because ISO 27001 is built around an ISMS, requiring organizations to continuously assess, manage, and improve security risks.

Another core part of the ISO 27001 compliance process is defining a Statement of Applicability (SoA), which is a document outlining the selected Annex A controls that address key information security risks.

Target Market

SOC 2 compliance is widely recognized in North America, particularly among SaaS companies, cloud service providers, and technology firms that handle customer data. While SOC 2 is not a certification, the SOC 2 Type 1 and Type 2 attestation reports assure enterprise clients and regulators that an organization maintains effective security controls aligned with the TSC.

For startups and scale-ups looking to expand their market presence in the U.S., SOC 2 compliance is often a prerequisite for securing B2B contracts and partnerships. Read our guide on SOC 2 compliance for startups to learn why startups need SOC 2.

Meanwhile, ISO 27001 certification can typically be shared freely with external parties, as it demonstrates an organization’s compliance with international standards for information security management. This makes ISO 27001 particularly valuable for organizations operating in global markets where formalized security frameworks are essential for regulatory requirements, vendor assessments, and enterprise partnerships.

This certification signifies that the organization has implemented robust security measures and processes, and it can be used to build trust with clients, partners, and stakeholders. Many businesses in Europe, Asia, and other international regions require ISO 27001 certification to prove strong information security management and risk management practices.

Audit Scope

The SOC 2 examination reviews the internal controls over the system, which may include one or more services offered by your company. It specifically looks at the policies governing the systems, along with procedures, system security measures, and change management practices.

You can choose to undergo a SOC 2 Type 1 audit (assessing controls at a single point in time) or a SOC 2 Type 2 audit (evaluating how controls operate over a period of time). This means SOC 2 audits are flexible in scope, so you can decide which services, processes, or data systems to include based on your customer requirements and business needs.

Because of this flexibility, SOC 2 compliance is often pursued by SaaS providers and cloud-based service organizations that want to demonstrate data security for specific products or platforms.

In contrast, ISO 27001 certification evaluates an entire organization’s ISMS to ensure a holistic approach to risk management rather than focusing on individual services.

Instead of auditing only specific controls, ISO 27001 certification requires companies to assess and improve their entire security posture. The audit process includes a risk assessment that determines which Annex A controls apply to the business, documented in a Statement of Applicability.

For companies managing complex IT environments or working with third-party vendors, aligning ISO 27001 risk assessments with SOC 2 controls can streamline compliance. Learn more about risk management best practices in our guide to IT risk management.

Timeline

ISO 27001 certification requires renewal every three years, with ongoing audits to verify compliance. These annual surveillance audits ensure your continued adherence to ISMS requirements. Every three years, a recertification audit is required to maintain compliance and demonstrate continual improvement in security controls. This structured timeline helps organizations identify vulnerabilities, refine risk management strategies, and strengthen security posture over time.

Conversely, SOC 2 evaluates how effectively controls operate over a review period, ensuring continuous adherence to security standards. A SOC 2 Type 1 audit provides a snapshot assessment of security controls at a specific point in time, while a SOC 2 Type 2 audit evaluates how well those controls function over several months to a year.

Since SOC 2 does not require recertification, organizations typically undergo annual SOC 2 Type 2 audits to maintain a continuous record of compliance and demonstrate operating effectiveness to customers and stakeholders.

Cost

The cost of SOC 2 and ISO 27001 audits depends on audit firm fees, internal resource allocation, and security tool investments.

SOC 2 audits can range from $20,000 to $100,000, depending on audit scope, the number of Trust Services Criteria included, and whether it’s a Type 1 or Type 2 audit. You can find a more detailed breakdown of SOC 2 audit costs on our blog.

ISO 27001 certification costs vary but generally fall between $30,000 and $150,000, including risk assessment costs, internal ISMS setup, and third-party audit fees. Ongoing compliance costs include annual surveillance audits and continuous ISMS improvements.

Organizations can reduce compliance costs by leveraging automation to track security measures, perform risk assessments, and manage internal controls.

Type of Report

ISO 27001 certificates do not provide details of an environment or the controls related to it, but the SOC 2 report provides details about the controls and the environment that may be useful to customers.

In practical terms, an ISO 27001 certificate confirms that your ISMS meets the standard’s requirements, including the implementation of Annex A controls. It doesn’t disclose the specifics behind each control or your day-to-day security practices.

On the other hand, SOC 2 reports are often considered confidential documents. While service organizations undergo assessments to obtain SOC 2 compliance, the detailed contents of the SOC 2 report—including specific controls and findings—are typically shared only with the organization’s clients and other authorized parties.

A SOC 2 attestation offers a more granular look at risk management processes, operating effectiveness, and the TSC. Because these reports can reveal sensitive information about your internal controls and data protection measures, most organizations keep them confidential and only share them with existing or potential customers, partners, and regulators.

Which Framework is Right for You?

To choose the right security framework, look at more than cost and complexity. Let’s explore how to determine whether SOC 2, ISO 27001, or both are the best fit.

Assess Your Market and Clientele

Identify your customers’ locations and what security standards they recognize or require. This will help you choose the most relevant framework and avoid any unnecessary compliance hurdles.

If your primary market is in the United States and your clientele is U.S. companies, SOC 2 might be more relevant due to its wide recognition in the U.S. For global operations or if your clients are international, ISO 27001 may be more suitable due to its international recognition. If you plan to expand into Europe or Asia, ISO 27001’s international credibility can boost your standing with prospective customers who expect globally recognized certifications.

Here’s how to evaluate these factors:

• Review your top clients’ RFPs: Look at current or past requests for proposals and see which security certifications are explicitly requested or preferred. This helps you pinpoint which framework resonates most with your existing clientele.

• Check competitor benchmarks: Research how similar businesses in your market handle security compliance. If you notice many of them prioritize SOC 2 or ISO 27001, that’s a strong indication of market expectations.

• Assess future sales channels: If you plan to enter new verticals or markets, determine what security standards those potential customers typically require. Aligning early can help you avoid costly rework later.

• Evaluate supplier and partner requirements: Sometimes, your partners or vendors may require a specific certification or attestation to continue working with them. Be sure to factor this into your decision-making.

Consider Your Business Needs

SOC 2 offers more flexibility and is customized to your specific business practices. ISO 27001 is more prescriptive, with a comprehensive set of controls, making it suitable for companies seeking a structured approach.

Decide whether you need a flexible approach tailored to your exact operations (SOC 2) or a more prescriptive framework that covers a broad set of security controls (ISO 27001). This is especially important if you need to balance operational agility with rigorous security requirements. A framework that mismatches your business model could result in wasted resources, delayed deals, or redundant controls.

Here’s how to understand your business needs:

• Understand the operational complexity: If your product or service is specialized, weigh whether SOC 2’s customized controls better suit your unique workflows or whether ISO 27001’s more prescriptive approach can streamline compliance efforts.

• Consider the impact across all teams: Gather input from engineering, operations, and compliance teams early on. If a rigid set of controls would stifle innovation or slow deployment cycles, SOC 2’s adaptability might help preserve agility.

• Look at your long-term security roadmap: If you plan to layer multiple frameworks or expand into highly regulated global markets, ISO 27001’s comprehensive ISMS can provide a unified foundation and reduce the need for separate compliance initiatives later.

• Review your resource capacity: Decide if you have the internal expertise to customize and maintain flexible security controls (SOC 2) or if you’d prefer a well-defined checklist of best practices (ISO 27001) to guide your entire organization.

Check Regulatory and Compliance Requirements

Identify the laws and industry regulations governing your business, then choose the framework that aligns best with them. Different industries may have specific regulations or compliance frameworks that favor one standard over the other.

For example, industries such as healthcare or finance may have stringent regulatory requirements related to data security and privacy, making ISO 27001 certification a preferred choice due to its approach to information security management.

Here’s how to use regulatory requirements to help you decide between SOC 2 and ISO 27001:

• Analyze overlapping standards: Identify whether your industry or region mandates compliance with multiple frameworks (like HIPAA, GDPR, or PCI DSS). Then, compare SOC 2 and ISO 27001 to see which can be cross-mapped most effectively.

• Survey auditor preferences: Talk to potential auditors or security consultants, as some specialize in particular verticals (like finance and government) and can expedite your path to compliance by focusing on a more suitable framework.

• Monitor upcoming regulations: Keep an eye on pending legislation or industry changes. If new laws tighten data protection requirements in your region, ISO 27001’s comprehensive ISMS might be more appropriate. Or, if there’s a trend toward service organization controls, SOC 2 could be the better match.

Should I Pursue Both SOC 2 and ISO 27001?

While both ISO 27001 and SOC 2 aim to establish robust information security frameworks, they serve distinct yet complementary roles within an organization’s security strategy.

As an independent audit report based on specific Trust Services Criteria, SOC 2 provides a focused review of controls related to security, availability, processing integrity, confidentiality, and privacy. This makes it particularly relevant for service organizations (like SaaS providers) looking to demonstrate a commitment to these principles, especially in North America.

In contrast, ISO 27001 offers a more comprehensive approach, outlining a broad ISMS that includes a wider range of security measures and management practices. By defining Annex A controls and conducting risk assessments, organizations can build a scalable security foundation suitable for global markets.

The nature of ISO 27001 means that organizations adopting this standard may find themselves well-prepared for SOC 2 compliance, potentially reducing the need for extensive additional measures or adjustments. This synergy can lead to efficiencies in compliance efforts, as the groundwork laid by ISO 27001’s controls and risk management processes can simplify the preparation for a SOC 2 audit.

Here are some scenarios where you might want both SOC 2 and ISO 27001 compliance:

• Global and U.S. expansion: If you’re primarily operating in North America but expanding into Europe or Asia, having both SOC 2 and ISO 27001 shows you meet internationally recognized standards (ISO) while addressing U.S. enterprise expectations (SOC 2).

• High-stakes, regulated industries: Financial services, healthcare, or government contracts often require layers of compliance frameworks. Achieving both SOC 2 and ISO 27001 demonstrates rigorous data protection across multiple domains—covering everything from internal controls to a fully documented ISMS.

• Future-proofing your security program: Organizations that plan to scale rapidly or adopt new compliance standards (like HIPAA, GDPR, or PCI DSS) may benefit from having the foundational ISO 27001 structure plus the more service-oriented SOC 2 attestation ready for enterprise clients.

Understanding if dual compliance is on your roadmap helps you allocate resources effectively and avoid duplicating efforts. For instance, if you plan to adopt ISO 27001 first, you can design risk assessments and security controls in a way that will easily map to SOC 2’s Trust Services Criteria. Align both frameworks early on to minimize operational disruptions and reduce compliance costs over time.

A Note on Early Compliance

Prioritizing compliance at an early stage can help your organization build a solid foundation for future audits and reduce the risk of discovering major gaps at inopportune times. Integrate SOC 2 or ISO 27001 requirements into your day-to-day operations from the start to establish a culture of security that scales as your business grows.

Below are some key benefits and considerations:

• Accelerate deals and investor confidence: Early compliance shows a proactive commitment to data security, helping you navigate due diligence faster when potential clients or investors request evidence of your controls.

• Avoid technical debt: The longer you wait to implement security measures, the more disruptive and costly they become. Addressing information security risks upfront ensures smoother operations and fewer surprises during annual audits or Type 2 reviews.

• Strengthen risk management: Weave a formal ISMS or TSC-based approach into your processes early to gain real-time visibility into vulnerabilities. This makes it easier to remediate issues before they escalate.

• Boost your security posture: Meeting recognized standards such as SOC 2 or ISO 27001 from the beginning helps demonstrate credible cybersecurity and data protection practices to customers and stakeholders. This not only fosters trust but also positions you favorably in competitive markets.

Simplify Your Compliance Journey With Drata

Drata automates the heavy lifting for both SOC 2 and ISO 27001, so you can focus on growing your business without sacrificing data security.

Whether you’re a startup aiming for rapid SOC 2 readiness or an enterprise seeking comprehensive ISO 27001 certification, Drata offers the tools, guidance, and support you need. Schedule a demo today to see how automation can transform your compliance strategy.

FAQs

Below, we answer some of the most common questions about SOC 2 vs. ISO 27001.

What’s the difference between SOC 2 and ISO 27001?

SOC 2 is an attestation report that evaluates a service organization’s security controls based on the Trust Services Criteria (TSC). It’s widely recognized in North America and helps SaaS companies prove their security posture to customers.

In comparison, ISO 27001 is an international certification for an Information Security Management System (ISMS). It provides a structured framework for managing security risks and is commonly required for global business operations.

While both focus on security, SOC 2 assesses the effectiveness of controls over time, whereas ISO 27001 requires a continuous risk management approach.

Can I get my ISO 27001 and SOC 2 at the same time?

Yes. Since SOC 2 and ISO 27001 share many security controls, organizations often pursue both simultaneously. By implementing an ISMS for ISO 27001, you can cover most SOC 2 requirements, streamlining the audit process.

However, the certifications are separate, and each requires its own assessment. Many companies start with ISO 27001 for global recognition and add SOC 2 to meet U.S. customer expectations.

What is the overlap between ISO 27001 and SOC 2?

SOC 2 and ISO 27001 share common security principles, including risk management, access controls, incident response, and vendor security. Both require organizations to document and implement security practices but differ in approach:

• ISO 27001 mandates an ISMS and a risk-based security strategy.

• SOC 2 evaluates how well security controls function over time.

By aligning ISO 27001 controls with SOC 2’s Trust Services Criteria, companies can reduce audit redundancy and streamline compliance.

Is SOC 2 mandatory?

No, SOC 2 is not legally required, but many companies expect vendors to provide a SOC 2 report before doing business. It’s especially important for SaaS and cloud providers handling customer data.

SOC 2 compliance reduces security questionnaires, accelerates sales cycles, and builds trust, making it a competitive advantage rather than a legal obligation.

Is ISO 27001 a legal requirement?

ISO 27001 is not legally required, but compliance can help meet regulatory obligations like GDPR, HIPAA, and PCI DSS. Some industries and regions strongly encourage or expect certification as proof of a strong security program.

Even when not mandated, ISO 27001 certification signals a commitment to security and risk management, making it valuable for global business operations.