Microsoft Copilot for Finance: SOC 2 Compliance Requirements and Implementation

Financial services organizations face unique compliance challenges when deploying Microsoft 365 Copilot. SOC 2 (Service Organization Control 2) compliance is a critical requirement for organizations that handle customer financial data, process electronic payments, or provide financial advisory services. SOC 2 attestation demonstrates that an organization has implemented appropriate controls for security, availability, processing integrity, confidentiality, and privacy. For Copilot deployments in financial services, SOC 2 compliance requires implementing technical controls that map to the Trust Service Criteria (TSC) defined by the American Institute of CPAs (AICPA).

The risk of non-compliance is significant. SOC 2 audit failures can result in loss of customer trust, contract termination, regulatory scrutiny, and inability to win new business. In 2024, a regional bank lost a $15 million managed services contract after failing a SOC 2 audit due to inadequate access controls for a cloud collaboration platform. The audit identified that the platform—similar in functionality to Copilot—provided employees with unrestricted access to customer financial data, violating SOC 2 Common Criteria CC6.1 (Logical Access Controls).

This guide provides a comprehensive technical roadmap for implementing SOC 2 controls for Microsoft 365 Copilot in financial services environments. It maps SOC 2 Trust Service Criteria to Copilot security configurations, provides step-by-step implementation instructions, and outlines audit evidence collection procedures. The guidance is based on production deployments across investment banks, asset management firms, and payment processors where SOC 2 compliance is mandatory and audit failures result in business impact.

SOC 2 Overview

SOC 2 is an auditing standard developed by the AICPA for service organizations that store, process, or transmit customer data. Unlike SOC 1, which focuses on financial reporting controls, SOC 2 focuses on operational controls related to security, availability, processing integrity, confidentiality, and privacy.

Trust Service Criteria

SOC 2 audits evaluate controls based on five Trust Service Criteria (TSC) categories:

1. Security: Protection against unauthorized access, both physical and logical
2. Availability: System availability for operation and use as committed
3. Processing Integrity: Complete, valid, accurate, timely, and authorized system processing
4. Confidentiality: Protection of confidential information as committed
5. Privacy: Collection, use, retention, disclosure, and disposal of personal information in conformity with privacy commitments

For Copilot deployments in financial services, Security and Confidentiality are the most critical TSC categories. The remaining sections of this guide focus on controls within these categories.

Common Criteria

Within each TSC category, the SOC 2 framework defines Common Criteria (CC) that apply to all SOC 2 audits regardless of the specific TSC category. The Common Criteria are organized into nine categories:

• CC1: Control Environment
• CC2: Communication and Information
• CC3: Risk Assessment
• CC4: Monitoring Activities
• CC5: Control Activities (not used; replaced by CC6-CC8)
• CC6: Logical and Physical Access Controls
• CC7: System Operations
• CC8: Change Management
• CC9: Risk Mitigation

For Copilot, the most relevant Common Criteria are CC6 (Access Controls), CC7 (Monitoring), and CC8 (Change Management).

For comprehensive SOC 2 compliance planning, see our SOC 2 Compliance Consulting service.

Common Criteria 1.0 Mapping to Copilot Controls

The following table maps SOC 2 Common Criteria to Microsoft 365 Copilot security controls:

| Common Criteria | Description | Copilot Control | |-----------------|-------------|-----------------| | CC6.1 | Logical access controls restrict access to information resources | Conditional access policies, MFA, device compliance | | CC6.2 | Prior to issuing credentials, the entity registers and authorizes new users | Entra ID user provisioning, access request workflows | | CC6.3 | The entity authorizes, modifies, or removes access based on personnel changes | Joiner/mover/leaver processes, access reviews | | CC6.6 | The entity implements logical access security measures to protect against threats from sources outside its boundaries | Firewall rules, named locations, geo-blocking | | CC6.7 | The entity restricts transmission, movement, and removal of information | DLP policies, sensitivity labels, information barriers | | CC6.8 | The entity implements controls to prevent or detect and act upon the introduction of unauthorized or malicious software | Microsoft Defender for Endpoint, app control policies | | CC7.1 | The entity monitors system components and operation to detect anomalies | Audit logging, Microsoft Sentinel, anomaly detection | | CC7.2 | The entity evaluates security events to determine whether they could impact operations | Incident response procedures, security operations center (SOC) | | CC7.3 | The entity responds to security incidents | Incident response plan, playbooks, communication protocols | | CC7.4 | The entity identifies, develops, and implements activities to recover from identified security incidents | Business continuity plan, disaster recovery procedures | | CC7.5 | The entity identifies, reports, and acts upon system security breaches | Breach notification procedures, regulatory reporting | | CC8.1 | The entity authorizes, designs, develops, tests, approves, and deploys changes to infrastructure | Change management policies, approval workflows |

The following sections provide detailed implementation guidance for each control category.

Access Controls (CC6.1 - CC6.3)

Access controls ensure that only authorized users can access Copilot and that access is granted based on the principle of least privilege. SOC 2 auditors evaluate access controls by reviewing user access provisioning procedures, authentication mechanisms, and authorization policies.

CC6.1: Logical Access Controls

SOC 2 Requirement: The entity implements logical access controls to restrict access to information resources, including applications, data, and infrastructure, to authorized users.

Copilot Implementation:

1. Conditional Access Policies: Implement conditional access policies that enforce MFA, device compliance, and location-based restrictions for Copilot access. Create policies that block access from unmanaged devices, untrusted locations, and high-risk user accounts.

Configuration Steps:

Navigate to Entra ID > Security > Conditional Access > Policies. Create the following policies:

• Policy 1: Require MFA for Copilot

  • Users: All users
  • Cloud apps: Microsoft 365 Copilot
  • Grant controls: Require multi-factor authentication

• Policy 2: Require Compliant Device for Copilot

  • Users: All users
  • Cloud apps: Microsoft 365 Copilot
  • Grant controls: Require device to be marked as compliant

• Policy 3: Block High-Risk Users from Copilot

  • Users: All users
  • Cloud apps: Microsoft 365 Copilot
  • Conditions: User risk = High
  • Access controls: Block access

1. Role-Based Access Control (RBAC): Implement RBAC by creating Entra ID groups for job functions (e.g., Financial Analysts, Risk Managers, Compliance Officers) and assigning Copilot licenses based on group membership. Configure SharePoint, OneDrive, and Teams permissions based on group membership to enforce least privilege.

Configuration Steps:

Create Entra ID groups:

Finance-Analysts
Risk-Management
Compliance-Officers
Customer-Service
IT-Administrators

Assign Copilot licenses to groups based on business need. Configure SharePoint site permissions to grant read-only access by default and escalate to edit access only when required.

1. Sensitivity Labels: Deploy sensitivity labels with encryption settings that restrict access to authorized users. Configure auto-labeling policies to apply labels automatically to financial data.

Configuration Steps:

Navigate to Microsoft Purview > Information Protection > Labels. Create the following labels:

• Public: No encryption, no access restrictions
• Internal Use Only: No encryption, access restricted to employees
• Confidential - Financial Data: Encryption enabled, access restricted to Finance-Analysts group
• Highly Confidential - Customer Data: Encryption enabled, access restricted to specific users only

Apply labels to SharePoint sites containing financial data. Enable auto-labeling policies that detect financial data types (e.g., bank account numbers, credit card numbers) and apply the "Confidential - Financial Data" label automatically.

Audit Evidence:

Provide auditors with the following evidence:

• Screenshots of conditional access policies
• Entra ID group membership reports
• Sensitivity label policy configurations
• User access reports showing least privilege access

CC6.2: User Registration and Authorization

SOC 2 Requirement: Prior to issuing system credentials and granting access, the entity registers and authorizes new internal and external users whose access is managed by the entity. Authorization is based on a request from an appropriate authority.

Copilot Implementation:

1. Access Request Workflow: Implement an access request workflow using Microsoft Entra ID Entitlement Management. Users must submit access requests that are reviewed and approved by managers before Copilot licenses are assigned.

Configuration Steps:

Navigate to Entra ID > Identity Governance > Entitlement Management > Access Packages. Create a new access package named "Microsoft 365 Copilot Access."

• Resources: Add the Copilot license as a resource
• Policies: Require approval from the user's manager
• Requestor settings: Allow only employees (not guests) to request access
• Approval settings: Require approval from requestor's manager and IT security team
• Review settings: Require access review every 90 days

1. User Provisioning Logs: Enable audit logging for user provisioning events. Monitor logs to ensure that all Copilot license assignments are preceded by approved access requests.

Configuration Steps:

Navigate to Entra ID > Monitoring > Audit Logs. Filter by Activity = "Add user to group" and Resource = Copilot license group. Export logs to CSV for audit evidence.

Audit Evidence:

Provide auditors with the following evidence:

• Access package configuration screenshots
• Sample access request approval records
• User provisioning audit logs
• Evidence of manager approval for all Copilot license assignments

CC6.3: User Access Modifications and Terminations

SOC 2 Requirement: The entity authorizes, modifies, or removes access to data, software, functions, and other IT resources based on roles, responsibilities, or the system design and changes.

Copilot Implementation:

1. Joiner/Mover/Leaver Process: Implement automated workflows that assign, modify, or revoke Copilot access based on employee status changes in the HR system.

Configuration Steps:

Integrate Entra ID with your HR system (e.g., Workday, SAP SuccessFactors) using Entra ID inbound provisioning. Configure provisioning rules to:

• Joiner: Assign Copilot license when employee is hired (if job role requires it)
• Mover: Update group membership when employee changes departments
• Leaver: Revoke Copilot license immediately when employee is terminated

Test the workflow by creating a test user in the HR system and verifying that Copilot access is provisioned automatically. Simulate a termination and verify that access is revoked within 1 hour.

1. Access Reviews: Conduct quarterly access reviews using Entra ID Access Reviews. Reviewers validate that users still require Copilot access and remove access for users who no longer need it.

Configuration Steps:

Navigate to Entra ID > Identity Governance > Access Reviews. Create a new access review:

• Name: Quarterly Copilot Access Review
• Scope: Users assigned to Copilot license group
• Reviewers: Group owners and managers
• Frequency: Quarterly
• Actions: Automatically remove access for users who are not approved

Audit Evidence:

Provide auditors with the following evidence:

• HR system integration configuration
• Joiner/mover/leaver workflow documentation
• Access review reports showing quarterly reviews
• Evidence of access revocation for terminated employees

For access governance implementation, see our Microsoft Entra Identity Governance service.

Logical and Physical Access (CC6.6 - CC6.8)

Logical and physical access controls protect Copilot from external threats, unauthorized data transmission, and malicious software.

CC6.6: External Threat Protection

SOC 2 Requirement: The entity implements logical access security measures to protect against threats from sources outside its system boundaries.

Copilot Implementation:

1. Named Locations and Geo-Blocking: Configure named locations in Entra ID to define trusted network ranges. Block Copilot access from untrusted locations and high-risk countries.

Configuration Steps:

Navigate to Entra ID > Security > Named Locations. Create a named location for your corporate network. Configure a conditional access policy that blocks Copilot access from locations outside the corporate network and approved countries.

1. Firewall Rules: Configure firewall rules to allow Copilot traffic only from managed devices and approved IP ranges.

Configuration Steps:

Configure network security groups (NSGs) in Azure or on-premises firewall rules to allow outbound traffic to Microsoft 365 endpoints only from managed devices. Block direct internet access to Microsoft 365 endpoints from unmanaged devices.

1. Azure Private Link: Deploy Azure Private Link for Microsoft 365 to route Copilot traffic through private network endpoints, preventing traffic from traversing the public internet.

Configuration Steps:

Navigate to Azure Portal > Private Link > Private Endpoints. Create a private endpoint for Microsoft 365. Configure DNS settings to resolve Microsoft 365 endpoints to the private IP address.

Audit Evidence:

Provide auditors with the following evidence:

• Named location configurations
• Conditional access policy screenshots
• Firewall rule configurations
• Azure Private Link deployment documentation

CC6.7: Data Transmission Controls

SOC 2 Requirement: The entity restricts the transmission, movement, and removal of information to authorized internal and external users and processes.

Copilot Implementation:

1. Data Loss Prevention (DLP) Policies: Configure DLP policies that detect and block transmission of sensitive financial data via Copilot. Block users from copying Copilot responses to unmanaged devices, external email addresses, or cloud storage services.

Configuration Steps:

Navigate to Microsoft Purview > Data Loss Prevention > Policies. Create a DLP policy named "Block Financial Data Transmission via Copilot."

• Locations: Microsoft 365 Copilot, Exchange, Teams, OneDrive, SharePoint
• Conditions: Content contains sensitive info types (Credit Card Number, Bank Account Number, ABA Routing Number, SWIFT Code)
• Actions: Block access, notify user, generate incident report

1. Information Barriers: Configure information barriers to prevent Copilot from enabling communication between segregated business units (e.g., investment banking and research departments).

Configuration Steps:

Navigate to Microsoft Purview > Information Barriers > Segments. Create organizational segments for each business unit. Create information barrier policies that block communication between incompatible segments.

1. External Sharing Restrictions: Disable external sharing for SharePoint sites and OneDrive folders containing sensitive financial data.

Configuration Steps:

Navigate to SharePoint Admin Center > Policies > Sharing. Set the sharing level to "Only people in your organization" for sites containing financial data.

Audit Evidence:

Provide auditors with the following evidence:

• DLP policy configurations and policy match reports
• Information barrier policy configurations
• External sharing settings for sensitive SharePoint sites
• Evidence of blocked transmission attempts

CC6.8: Malicious Software Prevention

SOC 2 Requirement: The entity implements controls to prevent or detect and act upon the introduction of unauthorized or malicious software to meet the entity's objectives.

Copilot Implementation:

1. Microsoft Defender for Endpoint: Deploy Microsoft Defender for Endpoint to all devices accessing Copilot. Enable endpoint detection and response (EDR), automated investigation and remediation, and application control policies.

Configuration Steps:

Navigate to Microsoft 365 Defender > Settings > Endpoints > Onboarding. Download the onboarding package and deploy it to all devices via Intune or Group Policy.

Enable Defender for Endpoint features:

• Automated Investigation and Remediation: On
• Block at First Sight: On
• Cloud-Delivered Protection: On
• Tamper Protection: On

1. Application Control Policies: Configure application control policies (Windows Defender Application Control) to allow only trusted applications and block unauthorized software.

Configuration Steps:

Navigate to Intune > Endpoint Security > Attack Surface Reduction. Create an application control policy that allows only signed applications from trusted publishers. Deploy the policy to all devices accessing Copilot.

1. Malware Scanning for Uploaded Files: Configure Microsoft Defender for Office 365 to scan all uploaded files in SharePoint, OneDrive, and Teams for malware before they are accessible via Copilot.

Configuration Steps:

Navigate to Microsoft 365 Defender > Policies & Rules > Threat Policies > Anti-Malware. Verify that anti-malware scanning is enabled for SharePoint, OneDrive, and Teams.

Audit Evidence:

Provide auditors with the following evidence:

• Defender for Endpoint deployment reports
• Application control policy configurations
• Malware detection reports
• Evidence of blocked malware uploads

For endpoint security implementation, review our Microsoft Defender for Endpoint Deployment service.

Risk Assessment and Monitoring (CC4.1, CC7.1)

Risk assessment and monitoring controls ensure that Copilot usage is continuously monitored for anomalies, policy violations, and security incidents.

CC4.1: Risk Assessment

SOC 2 Requirement: The entity identifies risks related to achieving its objectives and considers the potential significance of those risks.

Copilot Implementation:

1. Threat Modeling: Conduct threat modeling for Copilot deployment to identify security risks. Document threats such as prompt injection attacks, data exfiltration, unauthorized access, and policy violations.

Threat Modeling Process:

• Identify Copilot data flows (user → Copilot → data sources → response)
• Identify threat actors (external attackers, malicious insiders, compromised accounts)
• Identify threats (prompt injection, data leakage, unauthorized access, policy bypass)
• Assign risk ratings (High, Medium, Low) based on likelihood and impact
• Document mitigating controls for each identified threat

1. Risk Register: Maintain a risk register that documents all identified risks, risk ratings, mitigating controls, and residual risk.

Risk Register Template:

| Risk ID | Threat | Likelihood | Impact | Risk Rating | Mitigating Control | Residual Risk | |---------|--------|------------|--------|-------------|-------------------|---------------| | R-001 | Unauthorized access from compromised account | Medium | High | High | MFA, conditional access, risk-based policies | Low | | R-002 | Data exfiltration via prompt injection | Low | High | Medium | DLP policies, response filtering, content inspection | Low | | R-003 | Malware introduction via uploaded file | Low | Medium | Low | Defender for Endpoint, anti-malware scanning | Low |

Audit Evidence:

Provide auditors with the following evidence:

• Threat model documentation
• Risk register
• Evidence of risk assessment review and approval by management

CC7.1: System Monitoring

SOC 2 Requirement: To meet its objectives, the entity uses detection and monitoring procedures to identify anomalies; vulnerabilities; and other events that may impact the system.

Copilot Implementation:

1. Comprehensive Audit Logging: Enable audit logging for all Copilot activities, including prompt submissions, responses, data access events, and policy violations.

Configuration Steps:

Navigate to Microsoft Purview > Audit > Search. Verify that audit logging is enabled. Configure audit log retention for 365 days or longer.

Navigate to Microsoft Purview > Audit > Audit Retention Policies. Create a retention policy:

• Name: Copilot Audit Log Retention
• Retention Period: 365 days
• Activities: All Copilot activities

1. SIEM Integration: Integrate Microsoft 365 audit logs with Microsoft Sentinel or another SIEM platform. Configure log ingestion for Exchange, SharePoint, Azure AD, Teams, and Microsoft 365 Copilot.

Configuration Steps:

Navigate to Azure Portal > Microsoft Sentinel > Data Connectors > Microsoft 365. Enable audit log ingestion for all services. Verify that logs are flowing to Sentinel by querying the OfficeActivity table.

1. Anomaly Detection: Create alert rules that detect anomalous Copilot activity such as excessive data access, failed authentication attempts, and policy violations.

Alert Rules:

• Excessive Data Access: User accesses more than 100 documents via Copilot in one day
• Failed Authentication: User has 5+ failed sign-in attempts in 10 minutes
• Policy Violations: DLP policy blocks or conditional access denials
• High-Risk Sign-Ins: Sign-ins from anonymous IP addresses or unfamiliar locations

Configuration Steps:

Navigate to Microsoft Sentinel > Analytics > Rule Templates. Enable pre-built alert rules for Microsoft 365. Create custom alert rules for Copilot-specific anomalies.

Audit Evidence:

Provide auditors with the following evidence:

• Audit log retention policy configurations
• SIEM integration documentation
• Alert rule configurations
• Sample alert notifications and investigation records

For security monitoring implementation, see our Microsoft Sentinel Security Operations service.

Incident Response (CC7.3 - CC7.5)

Incident response controls ensure that security incidents are detected, investigated, contained, and resolved in a timely manner.

CC7.3: Incident Response

SOC 2 Requirement: The entity responds to identified security events by executing a defined incident response program to understand, contain, remediate, and communicate security events.

Copilot Implementation:

1. Incident Response Plan: Develop an incident response plan specifically for Copilot security incidents. Define incident categories (unauthorized data access, prompt injection attacks, policy violations, malware infections), roles and responsibilities, escalation procedures, and communication protocols.

Incident Response Plan Sections:

• Incident Categories: Define incident types and severity levels (Critical, High, Medium, Low)
• Roles and Responsibilities: Assign incident response roles (Incident Commander, Security Analyst, Communications Lead)
• Detection and Alerting: List alert sources and monitoring tools
• Initial Response: Steps to contain the incident and prevent further damage
• Investigation: Procedures for evidence collection and root cause analysis
• Remediation: Steps to restore normal operations and prevent recurrence
• Communication: Notification procedures for management, customers, and regulators
• Post-Incident Review: Lessons learned and process improvements

1. Incident Response Playbooks: Create automated incident response playbooks using Microsoft Sentinel or Power Automate. Playbooks automate evidence collection, user account suspension, and incident notification.

Playbook Example: Unauthorized Copilot Access

Trigger: Alert for high-risk sign-in to Copilot

Actions:

1. Suspend user account
2. Revoke all active sessions
3. Collect audit log evidence
4. Send email notification to security team
5. Create incident ticket in ServiceNow
6. Escalate to incident commander if severity = Critical

Configuration Steps:

Navigate to Microsoft Sentinel > Automation > Playbooks. Create a new playbook using the Logic Apps designer. Configure the playbook to trigger on Copilot security alerts and execute the actions above.

1. Incident Documentation: Document all security incidents in a centralized incident tracking system (e.g., ServiceNow, Jira). Include incident timeline, root cause analysis, remediation steps, and lessons learned.

Audit Evidence:

Provide auditors with the following evidence:

• Incident response plan documentation
• Incident response playbook configurations
• Sample incident records showing detection, investigation, and remediation
• Post-incident review reports

CC7.4: Recovery from Security Incidents

SOC 2 Requirement: The entity identifies, develops, and implements activities to recover from identified security incidents.

Copilot Implementation:

1. Business Continuity Plan: Develop a business continuity plan that outlines procedures for restoring Copilot access after a security incident or service disruption.

Business Continuity Plan Sections:

• Service Dependencies: Document dependencies on Entra ID, Intune, Microsoft 365 services
• Recovery Time Objective (RTO): Define maximum acceptable downtime (e.g., 4 hours)
• Recovery Point Objective (RPO): Define maximum acceptable data loss (e.g., 1 hour)
• Recovery Procedures: Step-by-step procedures for restoring service
• Communication Plan: Notification procedures for users and stakeholders

1. Backup and Restore Procedures: Implement backup and restore procedures for Copilot configurations, including conditional access policies, DLP policies, sensitivity labels, and entitlement packages.

Backup Procedures:

• Export conditional access policies to JSON using Microsoft Graph PowerShell
• Export DLP policies using the Purview API
• Export sensitivity labels using the Purview API
• Export entitlement packages using Microsoft Graph API

Store backups in a secure location (e.g., Azure Blob Storage with encryption and access logging).

1. Disaster Recovery Testing: Conduct annual disaster recovery tests to validate recovery procedures. Simulate a Copilot service disruption and measure the time required to restore service.

Audit Evidence:

Provide auditors with the following evidence:

• Business continuity plan documentation
• Backup and restore procedure documentation
• Configuration backup files
• Disaster recovery test reports

CC7.5: Breach Notification

SOC 2 Requirement: The entity identifies, develops, and implements procedures to respond to and communicate identified security breaches, including notification to affected parties.

Copilot Implementation:

1. Breach Notification Procedures: Document breach notification procedures that define when notification is required, who must be notified, notification timelines, and notification content.

Notification Requirements:

• Regulatory Notification: Notify SEC, FINRA, or other regulators within 48-72 hours of breach discovery (varies by regulation)
• Customer Notification: Notify affected customers within 72 hours (GDPR requirement)
• Law Enforcement Notification: Notify FBI or Secret Service for incidents involving financial fraud

1. Breach Investigation: Conduct a thorough investigation of all security breaches to determine scope, impact, and root cause. Document findings in an incident report.

Incident Report Template:

• Incident Summary: Brief description of the incident
• Timeline: Chronological timeline of events
• Scope: Number of affected users, data types exposed, duration of exposure
• Root Cause: Technical root cause analysis
• Remediation: Steps taken to contain and remediate the incident
• Lessons Learned: Process improvements to prevent recurrence

1. Breach Notification Log: Maintain a log of all breach notifications sent, including recipient, date, method of notification, and acknowledgment receipt.

Audit Evidence:

Provide auditors with the following evidence:

• Breach notification procedure documentation
• Sample incident reports
• Breach notification log
• Evidence of regulatory and customer notifications (if applicable)

For incident response planning, contact our Cybersecurity Incident Response team.

Change Management (CC8.1)

Change management controls ensure that all changes to Copilot configurations are authorized, tested, and documented.

CC8.1: Change Authorization and Testing

SOC 2 Requirement: The entity authorizes, designs, develops or acquires, configures, documents, tests, approves, and implements changes to infrastructure, data, software, and procedures to meet its objectives.

Copilot Implementation:

1. Change Management Policy: Develop a change management policy that defines the approval process for Copilot configuration changes. All changes must be approved by the change advisory board (CAB) before implementation.

Change Management Process:

• Change Request: Submit change request form describing the proposed change, business justification, and risk assessment
• Impact Analysis: Evaluate the impact of the change on security, compliance, and user experience
• CAB Review: Change advisory board reviews and approves or rejects the change request
• Testing: Test the change in a non-production environment before implementing in production
• Implementation: Implement the change during a scheduled maintenance window
• Validation: Verify that the change was implemented correctly and did not introduce unintended side effects
• Documentation: Document the change in the change log

1. Change Log: Maintain a change log that documents all Copilot configuration changes, including change date, change description, approver, and validation evidence.

Change Log Template:

| Change ID | Date | Description | Approver | Validation | |-----------|------|-------------|----------|------------| | CHG-001 | 2025-09-01 | Created conditional access policy "Require MFA for Copilot" | CISO | Tested in report-only mode for 48 hours, no blocked users | | CHG-002 | 2025-09-05 | Deployed DLP policy "Block Credit Card Numbers in Copilot" | Compliance Officer | Tested with sample credit card numbers, policy blocks successfully |

1. Configuration Backups: Create configuration backups before implementing changes. Store backups in a secure location with version control.

Backup Process:

• Export current configuration to JSON
• Store backup in Azure Blob Storage with timestamp in filename (e.g., conditional-access-2025-09-01.json)
• Tag backup with change ID for traceability
• Test restore procedure quarterly to ensure backups are valid

1. Rollback Procedures: Document rollback procedures for each change. If a change introduces issues, rollback procedures ensure that the previous configuration can be restored quickly.

Audit Evidence:

Provide auditors with the following evidence:

• Change management policy documentation
• Change log showing all configuration changes
• Sample change request forms with CAB approval
• Configuration backup files
• Evidence of change testing and validation

For change management implementation, see our IT Service Management (ITSM) Consulting service.

Technical Configuration for SOC 2 Compliance

The following technical configurations are required to meet SOC 2 compliance requirements for Microsoft 365 Copilot in financial services environments.

Required Configurations Checklist

Identity and Access Management:

• [ ] MFA enabled for 100% of Copilot users
• [ ] Conditional access policies enforcing device compliance
• [ ] Conditional access policies enforcing location-based restrictions
• [ ] Risk-based conditional access policies blocking high-risk users
• [ ] Privileged access management (PIM) for administrative accounts
• [ ] Access request workflow with manager approval
• [ ] Quarterly access reviews
• [ ] Automated joiner/mover/leaver process

Data Protection:

• [ ] Sensitivity labels deployed with encryption
• [ ] Auto-labeling policies for financial data
• [ ] DLP policies blocking transmission of sensitive data types
• [ ] Information barriers enforced between business units
• [ ] External sharing disabled for sensitive sites
• [ ] Row-level security configured in Power BI and Dataverse

Endpoint Security:

• [ ] Microsoft Defender for Endpoint deployed to all devices
• [ ] Device compliance policies enforced
• [ ] Application control policies deployed
• [ ] Automated investigation and remediation enabled
• [ ] Anti-malware scanning enabled for uploaded files

Network Security:

• [ ] Named locations configured
• [ ] Azure Private Link deployed (optional but recommended)
• [ ] Firewall rules restricting access to approved IP ranges
• [ ] Geo-blocking enabled for high-risk countries

Monitoring and Incident Response:

• [ ] Comprehensive audit logging enabled
• [ ] Audit log retention configured for 365+ days
• [ ] SIEM integration configured
• [ ] Anomaly detection alert rules deployed
• [ ] Incident response plan documented
• [ ] Incident response playbooks configured
• [ ] Business continuity plan documented
• [ ] Breach notification procedures documented

Change Management:

• [ ] Change management policy documented
• [ ] Change advisory board established
• [ ] Change log maintained
• [ ] Configuration backups created before changes
• [ ] Rollback procedures documented

For comprehensive SOC 2 implementation support, contact our SOC 2 Compliance Consulting team.

Audit Evidence Collection

SOC 2 auditors will request evidence demonstrating that controls are designed and operating effectively. The following table outlines the evidence required for each Common Criteria.

| Common Criteria | Evidence Type | Evidence Examples | |-----------------|---------------|-------------------| | CC6.1 | Conditional access policy configurations | Screenshots of policies, policy evaluation reports | | CC6.2 | Access request approval records | Access package configurations, manager approval emails | | CC6.3 | Access review reports | Quarterly access review results, evidence of access revocation | | CC6.6 | Network security configurations | Firewall rules, named location configurations, Private Link deployment | | CC6.7 | DLP policy reports | Policy match reports, blocked transmission attempts | | CC6.8 | Endpoint security reports | Defender for Endpoint deployment reports, malware detection logs | | CC7.1 | Audit logs and alert rules | SIEM log ingestion reports, alert rule configurations | | CC7.3 | Incident records | Incident response plan, playbook configurations, sample incident reports | | CC7.4 | Business continuity documentation | BCP documentation, configuration backups, disaster recovery test reports | | CC7.5 | Breach notification records | Breach notification procedures, notification log, sample notifications | | CC8.1 | Change management records | Change log, change request forms, CAB approval records |

Evidence Collection Process

1. Quarterly Evidence Collection: Collect audit evidence quarterly to ensure readiness for annual SOC 2 audit. Store evidence in a centralized repository (e.g., SharePoint site, compliance management platform).

2. Evidence Validation: Review evidence with legal and compliance teams to ensure completeness and accuracy. Address any gaps before the audit.

3. Auditor Access: Provide auditors with read-only access to the evidence repository. Respond to auditor requests for additional evidence within 48 hours.

4. Remediation: If auditors identify control deficiencies, implement remediation within 30 days and provide evidence of remediation.

For audit preparation support, see our SOC 2 Audit Readiness service.

Frequently Asked Questions

Is Copilot SOC 2 compliant?

Microsoft 365 Copilot is built on Microsoft 365 services (Exchange, SharePoint, Teams, OneDrive) that are SOC 2 compliant. Microsoft provides SOC 2 Type II attestation reports for Microsoft 365 services. However, SOC 2 compliance for your Copilot deployment depends on your configuration and implementation of security controls. Organizations must implement the controls outlined in this guide to achieve SOC 2 compliance. Microsoft's SOC 2 report covers the underlying infrastructure, but your organization is responsible for configuring access controls, DLP policies, monitoring, and incident response procedures.

What controls do I need for SOC 2?

SOC 2 compliance for Copilot requires implementing controls in the following categories: access controls (MFA, conditional access, device compliance, RBAC), data protection (DLP policies, sensitivity labels, information barriers), endpoint security (Defender for Endpoint, anti-malware), network security (named locations, firewall rules), monitoring and incident response (audit logging, SIEM integration, incident response plan), and change management (change approval process, configuration backups, rollback procedures). Refer to the "Required Configurations Checklist" section of this guide for a comprehensive list.

How do I prepare for a SOC 2 audit with Copilot?

Prepare for a SOC 2 audit by implementing all required controls, collecting audit evidence quarterly, and conducting pre-audit readiness assessments. Document your control environment in policies and procedures. Maintain evidence of control operation, including audit logs, access review reports, incident records, and change logs. Conduct internal audits to identify control deficiencies and remediate before the external audit. Engage an experienced SOC 2 auditor and provide read-only access to your evidence repository. Respond to auditor requests promptly and remediate any identified deficiencies within 30 days.

How long does it take to achieve SOC 2 compliance for Copilot?

Achieving SOC 2 compliance for Copilot typically requires 90-120 days for organizations with existing security programs and 120-180 days for organizations building compliance programs from scratch. The timeline includes policy development (2-4 weeks), technical configuration (6-8 weeks), evidence collection (4-6 weeks), pre-audit readiness assessment (2-3 weeks), and external audit (3-4 weeks). Organizations can accelerate the timeline by engaging external consultants with SOC 2 expertise. Contact our SOC 2 Compliance Consulting team for implementation support.

What is the cost of SOC 2 compliance for Copilot?

The cost of SOC 2 compliance depends on organization size, existing security maturity, and whether external consultants are engaged. For a mid-sized financial services firm (1,000-5,000 employees), expect to invest $150K-$300K including licensing costs (Entra ID P2, Purview, Defender for Endpoint), consulting fees ($75K-$150K), and external audit fees ($30K-$50K). Large enterprises (10,000+ employees) may invest $500K-$1M+. Organizations with mature security programs can reduce costs by performing internal configuration and evidence collection, engaging consultants only for pre-audit readiness and remediation support.

Internal Links:

• SOC 2 Compliance Consulting
• Microsoft Entra Identity Governance
• Microsoft Defender for Endpoint Deployment
• Microsoft Sentinel Security Operations
• Cybersecurity Incident Response