SOC 2 for Construction Finance: What CFOs Need to Know About AI Security

AI is transforming construction finance. But before you connect any tool to your ERP—where your most sensitive financial data lives—you need to ask hard questions about security.

This guide breaks down what SOC 2 certification means, why it matters for construction CFOs, and what questions to ask any vendor before giving them database access.

What is SOC 2?

SOC 2 (System and Organization Controls 2) is an auditing standard developed by the American Institute of CPAs. It evaluates how well a company protects customer data based on five “Trust Service Criteria”:

1. Security - Protection against unauthorized access
2. Availability - System uptime and reliability
3. Processing Integrity - Accurate and timely processing
4. Confidentiality - Protection of confidential information
5. Privacy - Handling of personal information

Type I vs. Type II

• SOC 2 Type I: A snapshot audit. “At this point in time, your controls are adequate.”
• SOC 2 Type II: An ongoing audit, typically 6-12 months. “Your controls have been consistently effective over time.”

Always ask for Type II. Type I is a start, but Type II proves sustained security discipline.

Why It Matters for Construction Finance

Your ERP contains:

• Vendor payment history - Who you pay, how much, when
• Job profitability - Your competitive advantage, essentially
• Employee data - Payroll, labor rates, personal information
• Cash positions - Bank account details, receivables aging

If this data were breached or manipulated, the consequences range from competitive disadvantage to regulatory penalties to loss of bonding capacity.

Any AI tool that queries this data must be held to the highest security standards.

The CFO’s Security Checklist

Before connecting any AI or analytics tool to your ERP, ask these questions:

1. “What type of database access do you require?”

✅ Good answer: “Read-only SELECT permissions on specific tables” ❌ Red flag: “We need full admin access” or “We copy your data to our servers”

The best tools use the same permissions model as Crystal Reports—SELECT only. They cannot INSERT, UPDATE, or DELETE your data.

2. “Where does my data reside?”

✅ Good answer: “Queries are processed in real-time; your data never leaves your infrastructure” or “Data is encrypted at rest in SOC 2-certified cloud infrastructure” ❌ Red flag: “We store a copy of your database on our servers” (creates unnecessary attack surface)

3. “Can you provide your SOC 2 Type II report?”

✅ Good answer: “Yes, here’s our latest audit from [reputable firm]” ❌ Red flag: “We’re working on it” or “We’re SOC 2 compliant” (without proof)

Ask to see the actual report, or at least a summary letter from the auditing firm.

4. “What encryption standards do you use?”

✅ Good answer: “TLS 1.3 for data in transit, AES-256 for data at rest” ❌ Red flag: “SSL” (outdated) or vague answers like “enterprise-grade encryption”

5. “Can I audit the queries being run against my database?”

✅ Good answer: “Yes, every query is logged and visible to you” ❌ Red flag: “Our AI is proprietary; we can’t share query details”

Transparency is non-negotiable. You should be able to see exactly what SQL is being executed.

6. “What happens if your company is breached?”

✅ Good answer: “We have cyber liability insurance, incident response procedures, and contractual breach notification requirements” ❌ Red flag: Anything vague or dismissive

AskERP’s Security Architecture

At AskERP, security isn’t a feature—it’s the foundation:

• SOC 2 Type II certified - Audited annually by an independent firm
• Read-only access only - We use SELECT permissions, just like Crystal Reports
• Your data stays yours - We query in real-time; we don’t copy or store your database
• AES-256 encryption - In transit (TLS 1.3) and at rest
• Full audit trail - Every query logged and visible to your IT team

We built AskERP because we understand the sensitivity of construction financial data. Our founders come from the industry—we’ve been in your shoes.

Taking the Next Step

Security shouldn’t be an afterthought when adopting AI tools. It should be the first conversation.

Ready to see how we handle security? Request a demo and we’ll walk you through our architecture, share our SOC 2 report summary, and show you exactly how queries are logged and audited.