Treasury and finance teams are being asked to do more than ever before. More visibility. More control. More accountability. And increasingly, they are being asked to make more technology decisions, often with limited time, limited resources, and very real downstream risk.

As treasury solutions become more modern, more connected, and more involved in daily cash and investment activity, one question matters more than many vendors would like to admit:

Is this platform built to support financial control?

That’s where SOC 1 and SOC 2 come in.

Most treasurers have heard the terms. Fewer have been given a clear, plain-English explanation of what they mean, why both matter, and how to use them to separate serious treasury platforms from “good enough” tools.

Let’s fix that.

Why SOC Reports Matter in Treasury and Finance

Treasury technology isn’t just another SaaS category.

These platforms:

• Touch cash balances
• Support fund movement
• Influence investment decisions
• Enable approvals and controls
• Feed data into financial reporting and forecasting

In other words, treasury systems sit directly in the control plane of the organization.

When something goes wrong in treasury, whether it’s a control failure, a data integrity issue, or unauthorized access, the impact shows up in audits, bank relationships, board discussions, and sometimes headlines.

SOC reports exist to provide independent assurance that a vendor’s controls are designed appropriately and operating effectively. But not all SOC reports cover the same ground.

SOC 1 vs. SOC 2—In Plain English

SOC 1 focuses on controls that impact financial reporting. For treasurers, this is critical.

A SOC 1 report examines whether a vendor’s systems and processes support:

• Accuracy of financial data
• Proper authorization of transactions
• Segregation of duties
• Change management and access controls
• Reliability of data used in accounting and reporting

If a treasury platform feeds information into cash positioning, forecasts, reconciliations, journal entries, or investment reporting, SOC 1 is directly relevant.

SOC 1 answers the question: Can this system be trusted as part of our financial control environment?

SOC 2: Security, Availability, and Data Protection

SOC 2 focuses on how a company protects systems and data.

It evaluates controls related to:

• Security
• Availability
• Confidentiality
• Processing integrity
• Privacy (when applicable)

SOC 2 matters because treasury platforms handle sensitive banking, transactional, and investment data across multiple systems and institutions.

SOC 2 answers the question: Is this platform built to operate securely and reliably?

The Key Point Treasurers Need to Remember

SOC 1 and SOC 2 answer different questions.

SOC 1 = financial control assurance

SOC 2 = technology and security assurance

You don’t replace one with the other.

You need both.

Which Treasury Activities Fall Under SOC 1 vs. SOC 2?

Several treasury activities are typically covered by SOC 1:

• Cash and investment reporting
• Forecasting inputs
• Reconciliations
• Fund transfers and approvals
• ERP and accounting integrations
• Audit trails and transaction history

If auditors rely on output from the platform, or if treasury relies on it to support internal controls, SOC 1 matters.

SOC 2 typically covers several other treasury activities:

• User access and role management
• Authentication and authorization
• Data encryption and protection
• System uptime and disaster recovery
• Incident monitoring and response
• Operational change management

As treasury platforms become more connected and more operational, SOC 2 becomes essential but still incomplete on its own.

Common Misconceptions That Get Treasurers in Trouble

There are several common misconceptions about SOC and SOC 2. Even experienced treasury leaders fall into these traps, not because they’re careless, but because vendors often blur the lines. Understanding why these misconceptions persist makes it easier to avoid them.

Misconception #1: “SOC 2 Alone Is Enough”

SOC 2 is important, but it does not address whether a system supports financial reporting controls, segregation of duties, or audit reliance. A treasury platform can be highly secure and operationally resilient while still failing to meet basic expectations for financial control.

This misconception persists because SOC 2 is more widely marketed and easier for vendors to obtain early. Treasurers who accept SOC 2 as a substitute for SOC 1 often discover the gap during audits, when remediation is far more painful.

Misconception #2: “Our ERP Covers This”

ERPs play a critical role, but they don’t magically absorb the risk of every connected system. If treasury relies on a third-party platform to aggregate balances, move funds, manage approvals, or support forecasting, that platform becomes part of the control environment.

This misconception usually arises from overconfidence in the ERP’s central role. Auditors, however, look at where controls operate, not where organizations wish they did.

Misconception #3: “We’re Not Big Enough to Worry About This”

Risk doesn’t scale with company size. It is scaled with complexity. Multiple banks, accounts, users, approval layers, and investment vehicles can create more exposure in a mid-sized organization than in a large one with standardized processes.

This belief often delays necessary scrutiny until a control issue surfaces. By then, treasury teams are forced to explain decisions that could have been addressed proactively with better vendor evaluation.

Misconception #4: “If It Was a Problem, the Vendor Would Tell Us”

Vendors are rarely incentivized to highlight their own control gaps. Instead, limitations are often buried in scope language, deferred roadmaps, or vague assurances that “most customers don’t ask for that.”

Treasurers who assume transparency without verification inherit blind spots they didn’t create. Asking direct questions and expecting clear answers is the only reliable way to surface real risk.

The Questions Treasurers Should Ask but Often Don’t

Here’s where confidence comes in.

When evaluating treasury automation solutions, these questions separate mature vendors from everyone else. They’re not about being adversarial. They’re about understanding who is prepared to operate in a true financial control environment.

1. Do You Have Both SOC 1 and SOC 2 Reports?

Not “Are you compliant?” Not “Are you working toward it?” Do you have them today and can they be shared under NDA?

This question forces clarity around current-state maturity, not future intent. Vendors that truly operate in regulated financial workflows understand that SOC reports are foundational.

2. Which Treasury Functions Are Covered in Your SOC 1 Scope?

SOC 1 reports are scoped, and scope matters.

Treasury leaders should ask:

• What systems and processes are included?
• Do they cover the activities we’ll do?
• How often are controls tested?

A SOC 1 report that excludes core treasury functions provides limited assurance. Vague answers often signal that controls were designed for a narrower use case than real-world treasury operations.

3. How Do You Support Segregation of Duties?

This is foundational for treasury.

Ask how the platform enforces:

• Role-based access
• Approval hierarchies
• Limits on fund movement
• Audit trails for changes

Segregation of duties must be system-enforced, not policy-based. When controls rely on manual processes, treasury teams absorb risk technology should be eliminating.

4. How Often Are Controls Tested and by Whom?

SOC reports aren’t static snapshots.

Strong vendors can explain:

• Testing frequency
• Independent validation
• Remediation processes
• Year-over-year improvements

This question reveals whether controls are living, monitored mechanisms or one-time compliance exercises. Ongoing testing is a strong indicator of operational maturity.

5. What Happens If Something Goes Wrong?

Incident response matters.

Ask about:

• Monitoring and detection
• Escalation paths
• Customer communication
• Recovery timelines

Treasury teams remain accountable even when incidents originate with vendors. Clear, practiced response processes protect both operations and credibility.

Final Thought

Treasury technology decisions affect audits, bank relationships, internal credibility, and personal accountability. SOC 1 and SOC 2 are signals of a technology provider’s maturity, seriousness, and respect for the role treasury plays inside the organization. Increasingly, what a vendor can’t answer tells you as much as what they can.