SSAE 18 and controls for SaaS platforms processing financial data

SSAE 18 and controls for SaaS platforms processing financial data

SSAE 18 defines the principles auditors follow when evaluating the controls implemented by service organisations. Rather than functioning as a certificate, it acts as a framework that guides auditors in examining systems that influence financial reporting or data security. Reports such as SOC 1 and SOC 2 are prepared in accordance with this framework, and for technology companies, particularly those offering cloud-based services, they serve as essential measures of trust and operational maturity.

For SaaS platforms that process financial information, SOC 1 validates that internal controls help prevent errors that may distort customers’ financial data. SOC 2, meanwhile, assesses security, availability, and processing integrity, which are critical for cloud services. Taken together, these reports offer a comprehensive view of an organisation’s technical capabilities and governance standards.

Why SSAE 18 controls matter for financial data processing?

Companies relying on SaaS solutions want assurance that their financial data is handled without risk of inaccuracies, delays, or security breaches. As a result, organisations in sectors such as finance, insurance, and technology increasingly require up-to-date SOC reports as a prerequisite for doing business. This trend reflects both the growing reliance on external systems and the heightened regulatory pressure to maintain strong risk management practices.

As a result, SaaS providers must demonstrate that they have implemented appropriate operational and technical controls—and that these controls consistently function as intended. SSAE 18 standardises how these mechanisms are evaluated, giving clients confidence that the assessment follows a recognised and trusted methodology.

Core SSAE 18 requirements

Meeting SSAE 18 expectations requires a well-designed and properly documented control environment. The essential components include risk assessment, oversight of subcontractors, and consistently applied operational controls.

Risk assessment and threat identification

The process begins with identifying risks that could lead to financial data errors or security incidents. The organisation must show that it can assess potential misstatements and link specific risks to corresponding controls. This shifts responsibility toward the service provider and requires a demonstrable, functioning risk-management process.

Oversight of third-party providers

Another key area involves managing subcontractors who deliver essential parts of the service. For SaaS companies, these often include cloud hosting providers, payment processors, or communication system vendors. If a subcontractor’s services meaningfully affect customer data, they must be formally included in the SOC report as a subservice organization.

To meet SSAE 18 expectations, the provider must demonstrate ongoing oversight through activities such as reviewing SOC reports, analysing incidents, tracking service metrics, and monitoring relevant security practices. These measures ensure that customer data remains protected throughout the service chain.

Continuous monitoring of control effectiveness

Implementing controls is not enough on its own. SSAE 18 requires continual monitoring to ensure they function reliably over time. This includes reviewing logs, analysing exceptions, evaluating access rights, documenting incident responses, and regularly testing backup and recovery procedures.

For SOC 2 Type II, the auditor evaluates control effectiveness over a defined period, which means that controls must operate consistently, not just in theory or documentation.

Management assertion and organisational accountability

An integral part of SSAE 18 is the management assertion—a formal statement confirming that the system description is accurate and that controls operated as described during the examined period. This requirement reinforces leadership accountability and promotes transparency across the organisation.

Key controls for platforms that process financial data

SaaS organisations must adopt control mechanisms that protect financial information, ensure data integrity, and enhance the security of the services they provide.

Organisational controls and governance

Auditors begin by assessing the organisation’s governance structure. They check whether responsibilities are clearly defined, whether security policies are current, and whether they are applied consistently. A clear and well-structured governance environment forms the basis for all other controls.

Access management and privilege oversight

Access management is one of the most critical elements in safeguarding financial data. It includes multi-factor authentication, automated revocation of permissions, and regular access reviews designed to identify and remove unnecessary privileges. These practices significantly reduce the risk of unauthorised actions.

Change management and software development processes

Auditors also analyse how changes to the system are introduced and how they affect customer data. Each modification must be planned, tested, and approved before being deployed to production. This approach introduces predictability and reduces the likelihood of processing errors.

Financial data processing controls

For SOC 1 reports, application-level controls are crucial. These include checks ensuring transaction completeness and accuracy, validation of financial calculations, appropriate authorisation for data changes, and regular reconciliations designed to catch discrepancies between systems.

Security and availability controls

SOC 2 reports evaluate aspects such as encryption practices, incident response processes, infrastructure stability, and other elements related to security, availability, and processing integrity. For SaaS services, these factors directly influence client trust and satisfaction.

Oversight of subcontractors

Since most SaaS platforms use external providers, documenting how these providers are monitored is essential. Including subcontractors in the SOC report and proving that they are subject to systematic oversight assures customers that critical parts of the service are consistently controlled.

Preparing the organisation for the audit

Preparing for an SSAE 18 audit involves several structured steps. The first is defining the scope to ensure that only relevant processes are included. Next comes identifying risks and mapping them to specific controls that mitigate those risks.

An internal readiness assessment is highly recommended. It helps identify documentation gaps and operational issues before the official audit begins. During the audit itself, the organisation must provide evidence—such as logs, incident reports, and access review records—demonstrating that controls are functioning as described.

After the audit, the organisation should focus on maintaining and improving controls. Consistent upkeep not only strengthens internal processes but also makes future SOC audits more efficient.

Common challenges and practical solutions

Organisations often face recurring difficulties when preparing for an SSAE 18 audit. These may include an unclear scope, misclassification of subcontractors, inconsistent documentation, or challenges in gathering evidence of control operation. Establishing a centralised documentation repository and assigning ownership for each control can significantly streamline the process.

Business benefits of mature control environments

A well-implemented control program aligned with SSAE 18 provides much more than formal compliance. It enhances system stability, improves the quality of data processing, and strengthens trust among clients and business partners. As a result, the platform can better meet market expectations and build a stronger position in the financial services landscape.