Building Fintech Apps with Convex: SOC 2 and HIPAA Compliance
Learn how to build compliant fintech applications using Convex. SOC 2 Type II and HIPAA compliance capabilities for startups building financial products.
February 11, 2025 8 min read
Choosing a database for fintech isn't primarily a technical decision. It's a compliance decision. The wrong choice means months of security audits, expensive infrastructure changes, or worse—telling enterprise customers you can't meet their requirements.
We use Convex as our primary database for fintech projects. Not because it's the fastest or cheapest, but because it ships with SOC 2 Type II compliance, offers HIPAA Business Associate Agreements, and provides ACID transactions that financial applications require. These aren't add-ons. They're baseline features.
This post covers why Convex works for compliant fintech applications, what the compliance landscape actually looks like, and the specific patterns we use to build financial products that pass audits.
Why Database Choice Matters More in Fintech
Standard SaaS products can start with any reasonable database and migrate later. Fintech products don't have that luxury.
Three factors make database choice critical:
Audit requirements: Financial regulators expect complete audit trails. Every data access, every modification, every user action logged and queryable. Databases without native audit logging require custom infrastructure that adds months to development.
Encryption requirements: Data at rest and in transit must be encrypted. Many databases offer this, but the implementation details matter for compliance documentation. Self-managed encryption creates audit burden. Platform-managed encryption simplifies certification.
Transaction guarantees: Financial applications can't tolerate inconsistent data. A user's balance showing different values in different parts of your app isn't just a bug—it's a regulatory violation. ACID transactions aren't optional.
Convex handles all three by default. That's not marketing—it's the reason we standardized on it for fintech work.
Convex's Compliance Certifications
Convex maintains several compliance certifications relevant to fintech applications:
Stop planning and start building. We turn your idea into a production-ready product in 6-8 weeks.
SOC 2 Type II: Convex has achieved SOC 2 Type II compliance, demonstrating sustained operation of security controls over time. Type II matters because it proves controls work consistently, not just that they existed on a single audit date. For fintech startups pursuing their own SOC 2, using a SOC 2 compliant backend dramatically simplifies the audit scope.
HIPAA Compliance: Organizations subject to HIPAA can process protected health information (PHI) on Convex's platform by signing a Business Associate Agreement. This is significant—many backend platforms either don't offer BAAs or charge enterprise pricing for HIPAA eligibility. Convex includes this capability.
GDPR Compliance: Convex maintains GDPR compliance for EU resident data, with continuous monitoring of their privacy program.
Infrastructure: Convex runs on AWS, which holds certifications for SOC 2 Type II, ISO 9001, HIPAA, FedRAMP, and other standards. This means compliance inheritance—your audit scope shrinks because infrastructure compliance is already documented.
Security Architecture That Auditors Like
Beyond certifications, Convex's security architecture addresses common audit requirements:
Encryption at Rest: All customer data—source code, databases, file storage, search indexes—is encrypted using 256-bit AES. This isn't optional or configurable. It's the default.
Encryption in Transit: All data movement uses TLS and SSH. External API calls, internal service communication, everything encrypted.
Database Isolation: Each customer database has isolated, unique credentials. No shared access paths between tenants.
Access Controls: Audited access control systems limit production access to necessary Convex personnel. All critical internal systems require MFA.
Vulnerability Management: Automated vulnerability scanning and intrusion detection deployed across infrastructure. Third-party penetration tests conducted annually.
Payment Security: Stripe handles payment processing as a PCI Service Provider Level 1 certified provider.
When auditors ask about your backend security, you hand them Convex's security documentation. You're not explaining custom configurations or defending architectural choices—you're pointing to established controls from a certified platform.
ACID Transactions for Financial Data
Financial applications require transactional consistency. Convex provides this through ACID-compliant transactions with serializable isolation.
The classic example: transferring money between accounts. You read Alice's balance, read Bob's balance, deduct from Alice, add to Bob. If any step fails, all steps must fail. If the steps can interleave with other transactions, balances can end up incorrect.
Convex handles this correctly:
typescript
// convex/transfers.ts
import { mutation } from "./_generated/server";
import { v } from "convex/values";
export const transfer = mutation({
args: {
fromAccountId: v.id("accounts"),
toAccountId: v.id("accounts"),
amount: v.number(),
},
handler: async (ctx, args) => {
const from = await ctx.db.get(args.fromAccountId);
const to = await ctx.db.get(args.toAccountId);
if (!from || !to) throw new Error("Account not found");
if (from.balance < args.amount) throw new Error("Insufficient funds");
await ctx.db.patch(args.fromAccountId, {
balance: from.balance - args.amount,
});
await ctx.db.patch(args.toAccountId, {
balance: to.balance + args.amount,
});
await ctx.db.insert("transactions", {
fromAccountId: args.fromAccountId,
toAccountId: args.toAccountId,
amount: args.amount,
timestamp: Date.now(),
});
},
});
The entire mutation is a transaction. No explicit transaction management. No commit or rollback statements. If anything fails, everything rolls back automatically.
Convex uses optimistic concurrency control with true serializability—not the snapshot isolation that causes anomalies in other systems. Concurrent transactions that would conflict are detected and retried automatically.
// In your React component
const transactions = useQuery(api.transactions.list, {
accountId: account._id,
});
When any transaction is added, every connected client showing that account's transactions updates immediately. You don't implement WebSockets. You don't manage subscriptions. You don't invalidate caches.
For fintech, this matters because:
Dashboard accuracy: Users see real balances, not stale cached values
Audit consistency: Everyone sees the same data state simultaneously
Collaboration support: Multiple team members working on approvals see updates in real-time
The reactive architecture tracks all data dependencies. When underlying data changes, affected queries re-run automatically.
Row-Level Security Patterns
Fintech applications need granular access control. Different users see different data based on their roles, account relationships, and permissions.
Convex functions run server-side, so authorization logic lives in your TypeScript code:
typescript
// convex/accounts.ts
export const get = query({
args: { accountId: v.id("accounts") },
handler: async (ctx, args) => {
const user = await getCurrentUser(ctx);
const account = await ctx.db.get(args.accountId);
if (!account) return null;
// Check if user has access to this account
const membership = await ctx.db
.query("accountMemberships")
.withIndex("by_user_and_account", (q) =>
q.eq("userId", user._id).eq("accountId", account._id),
)
.first();
if (!membership) return null;
return account;
},
});
Authorization checks happen at the data layer, not just the UI. No exposed database queries that bypass security. Every data access goes through functions you control.
For fintech audit requirements, you can log every access attempt:
Complete audit trails without complex infrastructure.
Why Convex Over Supabase for Fintech
Supabase is often compared to Convex. For fintech specifically, several differences matter:
HIPAA Availability: Convex offers HIPAA BAAs. Supabase's HIPAA support requires enterprise plans with custom pricing. For early-stage startups building healthtech-adjacent fintech products, this is a significant cost difference.
SOC 2 Scope: Both platforms have SOC 2 compliance, but Convex's Type II certification demonstrates sustained control operation over time.
Transaction Model: Supabase uses PostgreSQL transactions, which are powerful but require explicit management. Convex's automatic transaction boundaries around mutations reduce the surface area for bugs in financial logic.
Real-Time Architecture: Supabase real-time requires explicit subscription setup and channel management. Convex real-time is automatic—any query becomes reactive.
TypeScript Integration: Convex generates TypeScript types from your schema. Type safety extends from database schema through function arguments to client code. This catches errors at compile time rather than runtime—valuable when errors in fintech code have regulatory implications.
Supabase wins on PostgreSQL ecosystem compatibility and self-hosting flexibility. But for fintech MVPs prioritizing compliance and development speed, Convex's integrated approach reduces risk. For more on this comparison, see our detailed breakdown of Convex vs traditional databases.
Setting Up for Compliance
When building a fintech application on Convex, follow these patterns from day one:
1. Structure Audit Logging
Create a central audit log table and helper:
typescript
// convex/audit.ts
export const log = mutation({
args: {
action: v.string(),
resourceType: v.string(),
resourceId: v.optional(v.string()),
details: v.optional(v.any()),
},
handler: async (ctx, args) => {
const user = await getCurrentUser(ctx);
await ctx.db.insert("auditLogs", {
userId: user._id,
action: args.action,
resourceType: args.resourceType,
resourceId: args.resourceId,
details: args.details,
timestamp: Date.now(),
ipAddress: ctx.auth?.tokenIdentifier, // If using auth provider that includes IP
});
},
});
Call this from every mutation that modifies sensitive data.
2. Implement Soft Deletes
Financial data generally can't be hard deleted. Regulations require retention periods:
This simplifies compliance scope—tighter controls on fewer tables.
When You Need SOC 2 and HIPAA
Not every fintech MVP needs formal compliance certifications immediately. But understanding the timeline helps you build correctly.
SOC 2 Timing: Most B2B fintech products face SOC 2 questions when selling to enterprises. If your target customers are banks, insurance companies, or large financial institutions, expect SOC 2 requirements within 12-18 months of launch. Building on SOC 2 compliant infrastructure (like Convex) simplifies your eventual certification. Read our complete guide on when fintech startups actually need SOC 2.
HIPAA Timing: If your fintech product touches health data—HSA management, healthcare payment processing, benefits administration—you likely need HIPAA compliance from day one. The Convex BAA lets you handle PHI without building custom HIPAA infrastructure. For the full picture, see our HIPAA-compliant MVP development guide.
Using compliant infrastructure doesn't automatically make you compliant. You still need appropriate policies, training, and potentially your own certifications. But it removes the infrastructure layer from your compliance burden.
Cost Implications
Convex pricing works well for fintech MVPs:
Free tier: Sufficient for development and early testing
Pro tier: $25/month covers most pre-scale startups
Team tier: Scales with usage for growing products
Compare this to building equivalent compliance infrastructure yourself:
This gives you organizational multi-tenancy, role-based access, financial entity modeling, and compliance-ready audit logging from day one.
The Bottom Line
Convex isn't the only way to build compliant fintech applications. You can assemble equivalent infrastructure from PostgreSQL, custom WebSocket servers, and careful security configuration.
But for startups optimizing for speed-to-market and compliance simplicity, Convex eliminates categories of infrastructure work. SOC 2 Type II compliance, HIPAA BAA availability, ACID transactions, automatic real-time sync, and TypeScript-native development—all default features, not custom implementations.
The time you save on infrastructure goes toward building the financial product your customers actually need. And when auditors ask about your backend security, you point to documented controls from a certified platform rather than defending custom configurations.
For fintech, that trade-off makes sense.
Building a compliant fintech application? We've launched dozens of financial products using Convex and our compliance-first architecture patterns. Get in touch to discuss your project requirements.
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