At Agency, we have guided dozens of fintech startups through their first SOC 2 audit — from early-stage payment platforms to scaling banking-as-a-service providers. The first audit is where most teams underestimate the fintech-specific complexity, and it is the engagement where experienced advisory support makes the biggest difference. This guide distills what we have learned into a practical, step-by-step checklist.
For fintech startups — whether building payment processing, lending platforms, banking-as-a-service infrastructure, investment tools, or insurance technology — the first SOC 2 audit is frequently the compliance milestone that unlocks bank partnerships, enterprise customer contracts, and institutional investor confidence. Unlike general SaaS companies where SOC 2 is one of several possible compliance frameworks, fintech startups face a market where SOC 2 Type II is functionally mandatory: bank partners require it before sharing customer financial data, enterprise clients require it in vendor security assessments, and institutional investors evaluate it during due diligence. The challenge for fintech startups pursuing their first SOC 2 is that financial data sensitivity, regulatory intersections with PCI DSS and state money transmitter requirements, and the specific expectations of bank and financial institution buyers create additional complexity beyond a standard SaaS SOC 2 engagement.
This guide provides a fintech-specific step-by-step checklist for going from zero to a completed first SOC 2 Type II report, covering fintech-specific preparation steps, bank partner requirements, PCI DSS overlap considerations, and a phased timeline from initial planning through report delivery.
Pre-Audit Phase: Planning and Assessment (Weeks 1-4)
Week 1-2: Scoping and Strategy
| Step | Action | Fintech-Specific Considerations |
|---|
| 1 | Define your SOC 2 system boundary | Include all systems that process, store, or transmit financial data — payment processing APIs, banking integrations, KYC/AML systems, transaction databases, and customer-facing applications |
| 2 | Select Trust Service Criteria | Fintech startups should include Security (required), Confidentiality (strongly recommended for financial data), and Processing Integrity (strongly recommended for financial calculations); Availability if platform uptime is contractually committed |
| 3 | Identify bank partner and regulatory requirements | Survey your bank partners' specific SOC 2 expectations; some require specific criteria or observation period coverage |
| 4 | Determine PCI DSS overlap | If you process, store, or transmit cardholder data, assess PCI DSS requirements alongside SOC 2; plan for coordinated compliance |
| 5 | Set your target timeline | Work backward from your bank partner deadline or enterprise deal timeline to set your observation period and audit dates |
Week 3-4: Readiness Assessment
| Step | Action | Expected Findings for First-Time Fintech |
|---|
| 6 | Conduct a readiness assessment | Use your GRC platform's automated assessment or engage an advisory firm for a fintech-specific evaluation |
| 7 | Inventory all financial data flows | Map how financial data moves through your system — from customer input through processing, storage, and transmission to bank partners |
| 8 | Assess current security posture | Evaluate existing controls against SOC 2 criteria; expect gaps in formal documentation, access reviews, and vendor management |
| 9 | Identify remediation priorities | Prioritize gaps that block audit readiness: MFA enforcement, encryption, access controls, change management, incident response |
| 10 | Estimate remediation effort and cost | Budget for remediation: expect $10,000-$40,000 in remediation costs for a typical first-time fintech startup |
Common Readiness Gaps for Fintech Startups
| Gap | Why It Is Common | Remediation Priority |
|---|
| No formal access review process | Startup teams grow quickly; access expands without formal review | Critical — bank partners specifically evaluate access management |
| Incomplete MFA enforcement | Service accounts or legacy accounts without MFA | Critical — any account without MFA is a finding |
| No formal change management | Rapid development without documented approval and testing | Critical — change management is a core SOC 2 control area |
| Missing incident response plan | No formal plan beyond "fix it when it breaks" | High — incident response is required; financial incident scenarios needed |
| No vendor management program | Multiple fintech-specific vendors (banking APIs, KYC providers) without formal assessment | High — fintech has a dense vendor ecosystem that must be managed |
| No formal risk assessment | No documented risk identification and treatment process | High — required by CC3 criteria |
| Encryption gaps | Data at rest not fully encrypted; some API connections not using TLS 1.2+ | Critical — financial data encryption is non-negotiable |
| No security training program | No documented security awareness training for employees | Medium — required but can be implemented quickly |
Build Phase: Control Implementation (Weeks 5-12)
Week 5-6: Foundational Controls
| Step | Action | Fintech-Specific Details |
|---|
| 11 | Enforce MFA for all users | Enable MFA on all accounts including service accounts with interactive access; use hardware tokens for production infrastructure access |
| 12 | Implement role-based access control | Design RBAC model with fintech-specific roles: transaction viewer, payment processor, bank integration manager, compliance officer |
| 13 | Configure encryption | Enable encryption at rest for all financial data stores; verify TLS 1.2+ for all API connections; implement field-level encryption for sensitive fields (SSN, account numbers, routing numbers) |
| 14 | Set up logging and monitoring | Deploy centralized logging; enable cloud provider audit trails; configure alerting for security events and financial transaction anomalies |
| 15 | Configure a GRC platform | Set up Vanta, Drata, Secureframe, or Sprinto; connect integrations; begin automated evidence collection |
Week 7-8: Process Controls
| Step | Action | Fintech-Specific Details |
|---|
| 16 | Formalize change management | Implement branch protection, PR approval requirements, and deployment workflows in your CI/CD pipeline |
| 17 | Create incident response plan | Include financial-specific incident scenarios: unauthorized transactions, payment processing failures, bank API outages, customer financial data exposure |
| 18 | Conduct initial risk assessment | Document risks specific to financial data processing: fraud risk, regulatory risk, bank partner risk, financial data breach risk |
| 19 | Build vendor management program | Inventory all vendors; prioritize banking partners, KYC/AML providers, payment processors; conduct initial vendor risk assessments |
| 20 | Establish access review process | Document quarterly access review procedure; conduct the first access review to establish baseline |
Week 9-10: Documentation
| Step | Action | Fintech-Specific Details |
|---|
| 21 | Write or customize security policies | Use GRC platform templates; customize for financial data handling, PCI DSS overlap, regulatory requirements |
| 22 | Create financial data handling procedures | Document how financial data is classified, processed, stored, transmitted, and disposed of throughout your system |
| 23 | Document bank integration security | Describe security controls for each bank partner integration: authentication, encryption, access controls, monitoring |
| 24 | Complete system description draft | Draft the SOC 2 system description including fintech-specific components: payment processing, banking integrations, financial data flows |
| 25 | Distribute policies and collect acknowledgments | Deploy policies through your GRC platform; track acknowledgments from all employees |
Week 11-12: Testing and Verification
| Step | Action | Expected Outcome |
|---|
| 26 | Conduct penetration testing | Engage a penetration testing firm with fintech experience; include API testing for financial endpoints |
| 27 | Run vulnerability scan | Scan all in-scope infrastructure; remediate critical and high findings; document remediation timeline for remaining findings |
| 28 | Verify all controls are operational | Review GRC platform compliance dashboard; confirm all controls show passing status |
| 29 | Test incident response procedures | Conduct a tabletop exercise using a financial-specific scenario (payment fraud, data breach involving financial records) |
| 30 | Verify evidence collection completeness | Confirm automated and manual evidence is being collected for all controls; address any gaps |
PCI DSS Overlap Considerations
When PCI DSS Applies
| Scenario | PCI DSS Applicability | Coordination with SOC 2 |
|---|
| Your platform processes cardholder data directly | PCI DSS required — you are a service provider under PCI DSS | Significant overlap with SOC 2; pursue both frameworks leveraging shared controls |
| You use a payment processor (Stripe, Adyen) that handles cardholder data | PCI DSS may not apply to you directly; SAQ may be sufficient | Focus on SOC 2; document your payment processor as a subservice organization |
| You store cardholder data (card numbers, CVVs) | PCI DSS required — storage of CHD brings full PCI DSS scope | Full PCI DSS compliance needed alongside SOC 2 |
| You transmit cardholder data to a processor | PCI DSS applies — transmission is in scope | SAQ or full PCI DSS depending on volume; document transmission controls in SOC 2 |
SOC 2 and PCI DSS Control Overlap
| Control Area | SOC 2 Requirement | PCI DSS Requirement | Overlap |
|---|
| Access control | CC6.1-CC6.3 — logical access | Req 7, 8 — restrict and authenticate access | High — 80%+ overlap |
| Encryption | CC6.7 — data transmission controls | Req 3, 4 — protect stored and transmitted data | High — 70%+ overlap; PCI DSS more prescriptive |
| Change management | CC8.1 — change management | Req 6 — develop and maintain secure systems | High — 80%+ overlap |
| Monitoring and logging | CC7.2 — monitoring activities | Req 10 — track and monitor access | High — 80%+ overlap; PCI DSS specifies retention |
| Vulnerability management | CC7.1 — system monitoring | Req 5, 6, 11 — vulnerability management and testing | Moderate — 60%+ overlap; PCI DSS requires specific scan frequencies |
| Network security | CC6.6 — external threats | Req 1 — install and maintain network controls | Moderate — 60%+ overlap; PCI DSS requires network segmentation |
Bank Partner Requirements Checklist
What Bank Partners Evaluate
| Requirement | How to Address | Evidence to Prepare |
|---|
| SOC 2 Type II report | Complete your SOC 2 engagement; provide the report with NDA | Auditor-issued SOC 2 Type II report |
| Encryption of financial data | Field-level encryption for sensitive fields; TLS for all bank API connections | Encryption configuration evidence; TLS scan results |
| Access controls for bank integration | Strict access controls for bank API credentials and integration configurations | Access reports showing limited access to bank integration systems |
| Incident response capability | Documented plan with financial-specific scenarios | Incident response plan; tabletop exercise records |
| Business continuity | Documented BC/DR plan with defined RTO/RPO | BC/DR documentation; DR test results |
| Vendor security questionnaire | Complete the bank's vendor security assessment questionnaire | Completed questionnaire with SOC 2 report references |
| Cyber insurance | Proof of cyber liability insurance coverage | Insurance certificate |
| Penetration testing | Annual penetration test including bank-facing APIs | Penetration test report (executive summary; not full findings) |
Bank Partner Timeline Expectations
| Bank Partner Type | Typical SOC 2 Requirement Timeline | What to Plan For |
|---|
| Sponsor bank (for BaaS/payments) | Required before production data access; 3-6 month review process | Start SOC 2 preparation 6-9 months before planned bank onboarding |
| Lending partner | Required before loan data sharing; review embedded in partnership onboarding | Align SOC 2 timeline with partnership development timeline |
| Investment custodian | Required for technology vendor qualification; annual re-evaluation | Maintain continuous compliance for annual review cycles |
| Card network (Visa, Mastercard) | PCI DSS typically primary; SOC 2 supplementary but increasingly expected | Coordinate PCI DSS and SOC 2 timelines |
Observation Period and Audit Phase (Months 4-7)
Observation Period Management
| Step | Action | Timing |
|---|
| 31 | Begin observation period | Month 4 (after all controls are implemented and operational) |
| 32 | Maintain continuous compliance | Throughout the observation period — do not let controls lapse |
| 33 | Conduct scheduled compliance activities | Execute quarterly access reviews, monthly evidence reviews, ongoing monitoring |
| 34 | Document any incidents or exceptions | Record any security incidents or control exceptions with response and resolution |
| 35 | Verify evidence collection continuously | Weekly or bi-weekly check that automated evidence is collecting; address any gaps |
Selecting Your Auditor
| Consideration | Fintech-Specific Guidance |
|---|
| Industry experience | Select an auditor with fintech and financial services SOC 2 experience; they understand financial data controls and bank partner expectations |
| PCI DSS capability | If you also need PCI DSS, select a firm that can do both; coordinated audits reduce cost by 15-25% |
| GRC platform familiarity | Choose an auditor familiar with your GRC platform for smoother evidence exchange |
| Pricing | First-time fintech SOC 2 audits typically range from $25,000-$60,000 for Type II depending on scope and criteria |
| Timeline | Confirm the auditor can accommodate your target fieldwork dates; book 8-12 weeks in advance |
Audit Fieldwork Preparation
| Step | Action | Timing |
|---|
| 36 | Finalize evidence package | 2 weeks before fieldwork — verify completeness across all controls |
| 37 | Brief control owners | Prepare team members who may be interviewed by the auditor; review their control responsibilities |
| 38 | Grant auditor platform access | Configure auditor access in your GRC platform |
| 39 | Coordinate fieldwork schedule | Align interview availability and evidence review timing with the auditor |
| 40 | Respond to auditor requests | During fieldwork — respond to evidence requests and follow-up questions promptly |
Post-Audit Actions
After Report Delivery
| Step | Action | Purpose |
|---|
| 41 | Review the SOC 2 report for findings | Understand any exceptions, qualified findings, or recommendations |
| 42 | Create a remediation plan for findings | Address any findings before the next audit cycle |
| 43 | Share the report with bank partners | Distribute to bank partners and enterprise customers with NDA |
| 44 | Update your trust center | Publish SOC 2 availability on your website trust page or security page |
| 45 | Plan for ongoing compliance | Establish continuous monitoring, evidence collection cadence, and next audit preparation timeline |
Phased Timeline Summary
| Phase | Duration | Key Milestones |
|---|
| Planning and assessment | Weeks 1-4 | Scope defined; readiness assessment complete; remediation plan created |
| Control implementation | Weeks 5-12 | All foundational and process controls operational; policies documented; evidence collection active |
| Observation period | Months 4-7 (3-month period) | Controls operating continuously; evidence collecting; scheduled compliance activities executed |
| Audit fieldwork | Weeks during months 7-8 | Auditor conducts fieldwork; evidence reviewed; control owners interviewed |
| Report delivery | 2-4 weeks after fieldwork | Final SOC 2 Type II report delivered |
| Total timeline | 7-9 months from start to report delivery | First SOC 2 Type II report in hand |
Key Takeaways
- In our experience helping fintech startups, we recommend planning for a seven-to-nine-month timeline from zero to first SOC 2 Type II report delivery, with twelve weeks of preparation and control implementation followed by a three-month observation period and four to six weeks of audit fieldwork and report delivery
- We strongly recommend that fintech startups include Security (required), Confidentiality (strongly recommended for financial data), and Processing Integrity (strongly recommended for financial calculations) in their Trust Service Criteria selection — bank partners specifically evaluate these criteria for financial data processing assurance
- What we see with our fintech clients is that bank partner requirements should drive your SOC 2 timeline: we recommend starting preparation six to nine months before planned bank partnership onboarding, because bank vendor review processes add three to six months on top of your SOC 2 preparation timeline
- In our experience, PCI DSS overlap is significant (60-80% control overlap) for fintech startups that handle cardholder data — we recommend pursuing SOC 2 and PCI DSS with coordinated audits from the same firm, which reduces total cost by 15-25% compared to separate engagements
- The most common readiness gaps we see with first-time fintech startups are incomplete MFA enforcement, no formal access review process, missing change management documentation, and no financial-specific incident response plan — addressing these four gaps resolves the majority of critical compliance deficiencies
- We always advise our fintech clients to prioritize financial data handling documentation — mapping how data flows through your system from customer input through bank partner transmission — because this is a fintech-specific requirement that general SOC 2 guidance does not emphasize but bank partners and auditors specifically evaluate
- We help fintech startups navigate their first SOC 2 audit with bank-partner-specific requirements, PCI DSS coordination, and financial data control implementation that satisfies both compliance frameworks and institutional buyer expectations
Frequently Asked Questions
Can we start with a SOC 2 Type I and upgrade to Type II?
What we tell our fintech clients is yes, and this is a common approach when you need to demonstrate compliance quickly for a bank partnership while building toward a more comprehensive report. A SOC 2 Type I evaluates whether your controls are suitably designed at a point in time (no observation period required), and can be produced in four to six weeks after controls are implemented. You can then transition to a Type II for your next engagement. However, in our experience, most bank partners will require a Type II within twelve months, and some may not accept a Type I for initial qualification. We always recommend checking with your specific bank partners before choosing this approach. The additional cost of a Type I followed by a Type II is typically $10,000-$15,000 more than going directly to a Type II, because the auditor performs two separate engagements.
Do we need SOC 2 if our payment processor handles all financial data?
Based on what we see with fintech startups, even if your product uses a payment processor like Stripe, Adyen, or Square to handle all cardholder data and you do not store, process, or transmit card numbers yourself, your PCI DSS scope is minimal (likely SAQ-A or SAQ-A-EP). However, you still likely need SOC 2 because your platform handles other financial data — customer bank account information, loan data, transaction histories, personal financial information — that is outside of PCI DSS scope but within SOC 2 scope. Bank partners, enterprise customers, and investors evaluate SOC 2 for the broader financial data protection assurance, not just cardholder data. We recommend documenting your payment processor as a subservice organization (carve-out) in your SOC 2 report, which is standard practice.
How do we handle state money transmitter requirements alongside SOC 2?
What we tell our fintech clients is that state money transmitter licenses (MTLs) and SOC 2 serve different purposes but share some control overlap. MTLs are regulatory licenses required for companies that transmit money, while SOC 2 is a voluntary security assurance framework. Some states require annual examinations that include IT control evaluations similar to SOC 2. In our experience, your SOC 2 report can support MTL examination requirements by demonstrating formalized security controls, but the MTL examination is a separate process with state-specific requirements. We recommend coordinating with your compliance attorney to identify which MTL states require IT control evidence and aligning your SOC 2 control documentation to serve both purposes. There is no formal integration between the two, but the underlying controls (encryption, access management, monitoring, incident response) overlap significantly.
What is a realistic budget for a first-time fintech SOC 2?
Based on what we see with our fintech clients, for a startup with 20-50 employees pursuing SOC 2 Type II with Security, Confidentiality, and Processing Integrity criteria, we recommend budgeting $60,000-$150,000 in total first-year cost: $15,000-$25,000 for a GRC platform, $25,000-$55,000 for audit fees, $5,000-$25,000 for advisory support, $5,000-$20,000 for remediation, and $8,000-$20,000 for penetration testing. Internal labor (valued at engineering and leadership time) adds $15,000-$35,000. In our experience, fintech SOC 2 costs tend to be 15-25% higher than general SaaS because of additional criteria (Confidentiality and Processing Integrity), financial-data-specific controls, and bank-partner-driven documentation requirements.
