Industries That Typically Choose SOC 2 Type 1 vs. Type 2

The real value of SOC 2 isn’t the audit or getting that shiny attestation—it’s the mindset shift toward a more security-conscious company.

In my experience, most businesses don’t actually need the official report, but what you do need is to keep your company in a near audit-ready state at all times. That’s where the real benefit lies. Tools like this security assessment tool can help you quickly spot the gaps and close them before they become problems.

So what is the difference between Type 1 vs Type 2 ?

Both SOC 2 Type 1 and Type 2 reports require an audit by a qualified service auditor.

Type 1 is ideal if:

• You need to demonstrate compliance quickly (e.g., to close a deal).

• Your company is early-stage or has recently implemented new security systems.

• It evaluates controls at a specific point in time to show they are in place.

Type 2 is better if:

• You need to prove your controls function effectively over time (typically 3-12 months).

• It provides deeper assurance for customers seeking long-term partnerships with a company that has a mature security posture.

Industries That Typically Choose SOC 2 Type 1

Organizations that need to quickly demonstrate security compliance—such as startups or those in the middle of implementing new systems—should consider a Type 1 report. It’s perfect for companies looking to secure deals quickly, without the need for long-term control evaluations.

1. Startups/Tech Startups:

   • Companies in early growth stages that need to quickly demonstrate security controls to win deals or investment.

2. SaaS Providers:

   • New SaaS companies needing to show they have basic security controls in place, especially when approaching enterprise customers.

3. Fintech Startups:

   • Young fintech firms looking to secure partnerships with financial institutions or demonstrate security compliance to regulators.

4. Healthtech Startups:

   • Early-stage healthcare tech companies seeking to comply with HIPAA or other regulations while proving their initial security measures.

5. E-commerce Startups:

   • Online retailers who need to quickly show security compliance to payment processors or suppliers.

Industries That Typically Choose SOC 2 Type 2

Organizations handling sensitive customer data and seeking long-term assurance should aim for a Type 2 report. It offers proof that your controls work effectively over time and signals to enterprise clients that your security practices are reliable and mature.

1. Financial Services:

   • Banks, investment firms, and credit unions need long-term assurance that their security controls are effective over time.

2. Healthcare Providers/Healthtech Companies:

   • Organizations handling sensitive health data, such as telemedicine platforms or hospitals, need to prove ongoing security compliance (e.g., HIPAA).

3. Large SaaS Companies:

   • Mature SaaS providers looking to secure long-term enterprise deals by proving sustained security practices over time.

4. E-commerce Platforms:

   • Large e-commerce platforms or those dealing with sensitive customer payment data need Type 2 to ensure security effectiveness for payment processors and customers.

5. Cloud Service Providers:

   • Companies offering cloud storage, processing, or hosting solutions to enterprise customers, where security must be reliable and maintained continuously.

So, whether you go with Type 1 or Type 2, the key is to maintain a strong security posture. Most of the time, it’s not about having the official attestation—it’s about being consistently ready and able to prove your compliance when needed.

You can find the complete article here: SOC 2 Type 1 vs. Type 2