Mortgage Software Solutions Blog

Know Your Cyber Security Reporting Obligations

Know Your Cyber Security Reporting Obligations

New laws dictate how finance companies report security issues.

New York’s recent crackdown in state cybersecurity laws marks true reformation in the finance industry.

14 pages of detailed regulations fully outline the new accountability measures at Wall Street’s epicenter.

The regulations compel close to 10,000 financial institutions and 300,000 insurance licensees to put consumer protection before their corporate reputation for the first time in US history.

From a minor system access attempt by hackers all the way up to a full data breach, the new law saddles financial institutes with direct accountability to the state and implements a new standard in reporting for all mortgage loan servicers, banks, credit unions, and insurance companies.

For finance companies wondering how to conduct business in this new reality, here is a guide to the reporting obligations of New York’s new cybersecurity law

Governing Bodies

The first step of understanding the new obligations is to get familiar with the regulatory bodies of New York’s finance world.

The main authority on the new regulation is the New York State Department of Financial Services (DFS).

In the past, financial institutions were regulated via voluntary frameworks and reported externally to DFS in few situations with undefined parameters.

Under the new law, DFS established immediate authority by requiring a DFS-issued cyber security Certificate of Compliance as a basic prerequisite for operating a financial company. This gives DFS the ability to discipline non-compliant companies by revoking their certificate.

Beyond DFS, the regulation stipulates the creation of internal positions for officers to interface with DFS on behalf of the company. This requirement pushes aside ineffective industry-based governing bodies in favor of a direct link.

Mortgage companies must designate a Chief Information Security Officer (CISO) for in-house enforcement of company security procedures. The CISO reports in writing annually to the company’s board and will be held personally, legally responsible in the event of a breach at the agency.

Reporting Obligations

The final piece of accountability addressed in the new law is a reexamination of security reporting.

A “cybersecurity event” is any attempt of unauthorized access private consumer information. In order to mitigate the effects of a security event, financial institutions need to disclose data loss when it happens. This gives consumers sufficient time to take protective action such as changing passwords or putting a hold on a compromised credit card.

In practice though, finance companies endeavor keep data hacks under wraps. They prefer to save face and avoid losing consumer confidence.

In September of 2017, the Equifax data breach made international headlines. Though not the largest, it is considered the worst data breach in US history due to the sensitive nature of personal data that was accessed.

Despite being aware of the situation, Equifax spent five weeks running corporate damage control before disclosing the leak. The company initially underreported the number of affected consumers as 2.5 million instead of the actual 145.5 million people whose private data was stolen.

This failure to disclose the full extent of the damage infuriated the public.

Lawmakers vowed to protect consumers against this type of cover-up. With Sen. Elizabeth Warren (D-Mass.) at the helm, this is how the new regulations were written into law.

No More Cover-Ups

Now, the superintendent’s office places a strict time cap on security breach announcements. A company has no more than 72 hours to report any event that has a “reasonable likelihood of materially harming the normal operations” of the company. 

Since Equifax’s disregard for public safety, the law now stipulates that a data breach report is no longer the jurisdiction of the local supervisory body. Instead, reports of data loss go up the chain of command straight to the New York Superintendent’s office.

With a quicker turnaround time, consumers can be alerted quickly and efficiently through official channels about the breach.

Though basic requirements of the law have already gone into effect, the state of New York did allow time for mortgage companies to learn the law and implement it piece by piece.

According to the roll-out dates of the law, companies are required to be legally compliant with specific sections of the law on March 1 and September 3, 2018. The end of the full two-year transitional period and full compliance will be enforced by March 1, 2019.

For comprehensive compliance guidance and other cybersecurity solutions and, contact us.

Image: Visual Hunt

Topics: cyber security mobile security mobile device security email security cybersecurity security mortgage industry Trump Administration Housing Market Mortgage Lending 23 NYCRR Part 500 NYSDFS

Time for Lenders to Take Responsibility for Data Security

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Lenders and customers face the dangers lurking in the finance world.

Since when do finance organizations rely on customers for security advice?

An investigation into US mortgage lending practices found that 70% of lenders regularly put sensitive financial data at risk by prioritizing customer convenience over security.

While customers often choose to send personal information via quick and familiar technology such as fax or unencrypted personal email, lenders continue to look the other way rather than correct these dangerous habits.

Something has gone awry in the lending industry and customers are taking notice.

It’s the responsibility of the lender to uphold security measures. Lenders have security tools at their disposal. Instead of leaving the doors open to data thieves, they should be insisting on secure email portals and other measures that protect the consumer.

As technology advances for both financial institutions and the data thieves that seek to attack them, it’s time for lenders to take the reins when it comes to customer security.

Financial Services are at High Risk

The two main dangers facing the finance industry are data breaches and security incidents.

A security incident describes any occurrence that has the potential to compromise consumer information. This can be an attempted data theft or an attempted hack into a computer system that stores sensitive information.

A data breach is more serious. Breaches are confirmed disclosures to an unauthorized party. Breaches represent a complete failure of the security system to keep the wrong people out.

An investigation of data breaches across industries finds that Financial Service organizations like mortgage lenders fall into the top three industries affected by successful hacks. In fact 2016 saw 1,368 security incidents and 795 confirmed data loss cases in the finance industry.

Given the value of the data that mortgage lenders collect, mortgage companies remain among the most vulnerable to cyber attacks.

Cyber Security Issues to Watch For

As mentioned, one security vulnerability is with lending staff. Sophisticated cybersecurity standards don’t mean anything if your employees are side-stepping official procedure. Documents with any sort of consumer data should only be shared within secured environments.

Round up the staff and reiterate how the company (and perhaps their job) relies on following the rules. Employee negligence and unsafe information disposal are not to be tolerated.

It’s also a good idea to get coordinated with your IT department. Are staff members using mobile devices like smart phones and tablets to handle sensitive information? Your IT department can install security measures like password protection and encryption so that these devices are cleared for proper company use.

Besides training and an IT device round-up, make sure your software access is secure. Multi-factor authentication or MFA is another way to seriously step up your security game.

After you’ve cleaned house, check your neighbors. Third-party services and their software tools cannot be overlooked. Anything handled by another organization that concerns your company’s customers should meet the same stringent security standards that you enforce in-house.

The Financial Cost of Cyber Attacks

Though financial institutions may have always had customer security in mind, the industry has felt the backlash in recent years.

Historically respected companies are losing consumer confidence. Beyond topping lists for riskiest industry, some of the big names have taken very public falls.

Equifax, a national name in credit scoring, experienced a hack in late 2017. The breach resulted in unsavory national headlines, a PR crisis, the involvement of the FTC, and a resulting push for never-before-seen legislation that regulates the whole industry.

Beyond reputations, there is money at stake. The financial cost of cyber attacks has been on the rise in recent years.

The average cost per capita of a Financial Services data breach in the US has increased by 10% in three years. In 2016 it reached $221 per person as a shared cost that consumers are burdened with thanks to lenders being devil-may-care with their information.

With consumers taking the hit and their financial institutions being degraded by cyber attacks, the industry is set to lose a lot of money.

Clearly, it’s time for a serious turn towards cyber security in order to prop the industry up in the eyes of consumers.

For mortgage lenders, it’s time to turn away from business as usual and make a serious effort to put cybersecurity at the top of the priority list. Not only will this protect valued customers, but it will save the reputation of an industry that has taken enough hits.

Businesses protected by a cloud-based portal with access secured by MFA are leading the industry in the push for cyber security. To find out about security-focused programs like Document Guardian contact ABT.

Image: Laura College on Unsplash

Topics: phishing security mortgage industry Compliance Audit DFS 23 NYCRR Part 500 NYSDFS network safety

7 of the Most Interesting Facts About Cyber Security

 

pic blog-1.jpgAs technology of cyber security advances, so does the technology of hackers.

A computer hacker is the name given to the tech-savvy folks on both sides of the internet battlefront. Bad guys or “black hat” hackers are the ones trying to break into computer systems, steal data, and install harmful software. The “white hat” hackers are cyber security heroes that develop ways to catch bad guys and stop malicious programs from doing damage. That’s interesting nomenclature, right?

The world of cybersecurity is full of intriguing tidbits that help us understand the dangers and how to protect ourselves from the black hats of the world. Here are 7 of the most interesting facts about cyber security.

  1. The number of cyber attacks is going UP not down. Though white hat hackers continue to improve, the total number of cyber attacks doubled in 2017. That’s according to the Online Trust Alliance (OTA), which has named 2017 “the worst year ever in data breaches and cyber-incidents around the world.” 
  2. Ransomware is leading the way in modern cyber security events. Ransomware is a type of malicious software that holds a victim’s data hostage until a ransom is paid. Instead of selling victims’ information on the black market, ransomware has established a way to make money off this stolen information directly from victims. The threat of ransomware is based on doxxing (publishing of the personal data) or blocking a victim’s online access to their own accounts.
  3. 91% of cyber attacks in 2017 started with a phishing email. Phishing is the practice of sending fraudulent emails that seem to be from a reputable company. When the victim clicks on a link or freely reveals their passwords or credit card information as a response, the phish is a success. The two best ways to avoid phishing attacks are to (1) never click unknown links and (2) never send sensitive information that has been requested via email.
  4. Cyber-crime damages will cost the world $6 trillion annually by 2021, up from $3 trillion just a year ago. This massive amount of money represents the greatest transfer of economic wealth in history (2017 Cybersecurity Ventures).
  5. Financial organizations are the biggest targets of cyber attacks. Verizon’s 2017 Data Breach Report breaks down the hacks by percentage: Last year, 24% of breaches targeted the finance industry, 15% were aimed at healthcare, 15% were retail, and only 12% of breaches occurred in the public sector.
  6. Mortgage companies are the #1 target in the industry because of the treasure trove of information that they require from customers. Mortgage companies hang onto more non-public than any other type of financial organization.
  7. 93% of breaches could have been avoided by taking simple steps, such as regularly updating software or leveraging modern cloud based solutions. Can you believe that breaches are easy to prevent? There is an old saying that “the best defense is a good offense”. It applies to the cyber security world too.

If you take the initiative ahead of time to set up clear security mechanisms, your company’s data systems won’t be attractive to bad guys.

What are the new standards for security? Modernized IT including updated password policies and Multi Factor Authentication. Cloud-based data systems are key for getting your company data off those old office servers. Sophisticated cloud-based email gateways configured especially for the mortgage industry to protect against email-based threats. These are the foundations for data security when it comes to financial institutions in 2018.

Be the cyber security leader in your industry. Make the changes before hackers make the first move on your company. When you aren’t an easy target, your data remains safe and your customers stay happy.

The best thing a business can do to keep those black hats at bay is to stay informed about cyber security by reading articles like this and use their knowledge to implement solid security measures before a hack occurs.

Businesses protected by proven security measures like ABT’s Email Guardian remain safe and receive monthly reports detailing security threats. Contact us to learn more.

Image: Pexels.com
Topics: Mortgage Software Reporting dangers of ransomware email security data security mortgage company security financial data security creating strong passwords social networking safety phishing multi-factor authentication cybersecurity security productivity mortgage business malware network safety

4 Reasons to Implement a Mortgage Business Intelligence Strategy

bim.jpgBI visuals help employees in the company get on the same page.

Business Intelligence (BI) has come a long way since its first implementation.

At its most basic, BI has always involved analyzing reports and performance information to allow companies to make decisions based on past activity.

At the complex level of present-day information gathering, BI handles large amounts of unstructured, seeming unrelated data and then makes utilitarian connections between data points.

Using modern BI, a company can turn information sets into successful business strategies that give them the edge on the market and long-term stability over their competitors. Nowadays companies even have access to industry-specific BI tools.

Can you imagine why the mortgage industry should harness this ability? Here are 4 reasons to implement a Business Intelligence Strategy in your mortgage company.

  1. Integrated BI for Complete Data

By integrating business intelligence, a mortgage company has the ability to gather data on their activity via an existing mortgage enterprise management system (EMS) and then work with that data using the BI module.

With two or more applications communicating seamlessly, administrators have all the company information at their fingertips.

Integrating BI with existing tools like EMS and CRM platforms makes the data sets more ample and complete.

  1. Improved Strategic Awareness

Integrated Mortgage BI goes beyond just connecting platforms. It develops a rich business intelligence data warehouse (BIDW) that forms the basis for future decisions.

The BI module has the capacity of building data model visuals that are easy to understand. Using the full range of information available, this feature processes information to make it actionable. Pulling information from all sources means providing the company with rich prescriptive and predictive analytics output.

The strategy of information awareness and fact-based decisions produces a positive influence on the bottom line.

  1. BI Accessibility Breeds Positive Change

It used to be that companies needed IT analysts to interface with the data and come up with insight. It was a management level activity shared between tech folks and decision makers in the company.

With an industry-specific BI strategy in place, everyday users in a mortgage company can view easy-to-understand level-specific data related to their work. Placing BI in employee dashboards empowers them to make informed decisions. It goes beyond IT data and links up with HR, employee metrics, customized dashboards, and more to give the power of data to employees at every level of the company.

Smart decisions go from being seen as top-down directives to using real information as the basis for decisions company-wide. This change in company culture has the benefit of increasing employee job satisfaction and efficiency, which also affects the bottom line.

  1. Industry-Specific Bi is Affordable

There are plenty of BI applications on the market. From Tableau to Microsoft, the tech industry has developed a plethora of BI platforms with a range of executions.

There are also visionary platforms like Salesforce that are extremely flexible but require in-house IT customization. They come with bells and whistles that aren’t meant for the mortgage industry.

Mortgage companies without the resources to create their own fit have a better option. Industry-specific software with ample performance ability is the sweet spot. A mortgage-specific BI tool like this is the most affordable choice.

Mortgage companies who implement this type of “goldilocks” platform will be able to harness the power of BI quickly and easily.

Mortgage BI, developed by the same Northern California-based company that produces the data-sharing software MortgageExchange™, is a perfect example of this type of “goldilocks” platform.

ABT’s takes Microsoft’s Power BI software and their own MortgageExchange and combines them for a leading example of how companies can harness the big-brand power of BI without being oversized or overpriced. Not too expensive, no surplus of addons, and customized to be just right for the finance industry.

BI offers huge improvements to every modern mortgage company’s business strategy. The improved strategic awareness will save your company from financial missteps and BI-generated visual representations of performance data will put employees on the same page across the company.

With BI implementation, companies can efficiently put their data to work and move forward with clear direction.

Contact ABT directly to learn about Mortgage BI business analytics for your bank, credit union, or mortgage company.

Image: VisualHunt.com

Topics: Cloud Services information security for mortgage companies data interface solution data security mortgage software integration Business Intelligence Mortgage BI security productivity mortgage business mortgage regulations mobile technology mortgage industry

A Secure Alternative for Transferring Sensitive Mortgage Documents

Securing_documents_from_borrowers_.jpgDocuments aren't really safe unless their transfer is secure from end to end. A mortgage company may store and manage its information with the highest standards, but there is still significant risk if the borrower or seller submits their documents through unsecure channels.

What are some of the best steps you can take to ensure you are meeting security compliance standards and protecting your valuable data when transferring sensitive mortgage documents?

Avoid Email

Email is a simple, popular way to send information. It is also a very unsafe way to transfer confidential information. There's no standard method of encryption for email; Simple Mail Transfer Protocol sends messages by a series of hops from source to destination, with no way to control what servers a message might go through along the way. A "honeypot" server might pass all emails along normally but also grab copies for nefarious purposes.

This scenario is even worse if a sender is using unencrypted Wi-Fi, such as a public hotspot. A criminal can just lurk nearby with a receiver to grab copies of any mail.

Offer a Secure Alternative

What can a mortgage company do about customers sending unsecured documents, and what does it need to do? You can't outright stop people from using email, but you can severely discourage its use for sending confidential data. The best way to discourage this is to provide secure document management alternatives.

Regulations require lenders to handle documents securely. Though it’s not clear whether a mortgage company can get into trouble for accepting emailed documents, regulators will certainly view you in a better light if you present your customers with a secure, convenient alternative.

If confidential customer information is intercepted in transit, this leak can damage the lender's reputation, even if it was the customer's fault. Lending institutions need to take strong measures to avoid unsecure transfers.

Documents also need to be sent to customers securely. The mortgage company has control over this and should strictly follow good practices, both for the customers' safety and to be on safe legal ground. Lenders should never send sensitive documents by email.

Drag-and-Drop or File Transfer Account?

A simple, secure way to let customers provide documents is the drag-and-drop approach. This method lets users upload documents with a secure transfer, and it can be set up with or without password protection.

If there's no password, anyone who discovers the link can upload a document, but this is a relatively minor risk. The destination server allows only uploading, not viewing, of files, so the most that anyone who gets a copy of the link can do is upload fake files. As long as employees exercise normal caution about any information that looks wrong, the chances of harm are small.

Services like Dropbox take a drag-and-drop approach but create an unprotected link which anyone can download. Dropbox allows password-protected documents, but only with paid accounts; the free version isn't well-suited for sensitive documents.

Another approach is to create a file transfer account for each customer. Once they've registered, the software will let them upload and download files. This allows for two-way file transfer between the customer and lender, and customers can review what they've already uploaded.

In a system where customers can download as well as upload files, it is necessary to authenticate the identity of the person creating the account. Confidential personal information, such as the customer's Social Security number, can help with this. For additional security, the lending institution can send the customer a code to enter when registering.

This method offers more options than the drag-and-drop approach, but it is also more complicated to set up. If customers forget their passwords, they will need a procedure to reset them, which often involves emailing a one-time link—a method which has its own security problems.

What's important in either case is to use a secure URL (starting with “https:”) with a properly configured server. A website that doesn't use a secure connection allows eavesdroppers to intercept not only documents but passwords. An unsecure web connection is even riskier than email.

The DocumentGuardian Solution

ABT's DocumentGuardian™ uses the simple, reliable, drag-and-drop approach but beefs it up with more security. The customer receives an upload link; no registration or password is required. Uploading is a simple matter of dragging the file to a window. Files are uploaded via a secure connection and sent directly to ABT's secure data center, where they're available to the lending institution. When a customer uploads a revised version of a document, the old version remains available and can be viewed, compared, or, if necessary, restored.

Equal parts simplicity and security, DocumentGuardian™ is the perfect solution to enable you and your customers to transfer sensitive documents with as little risk as possible.

To learn more about how DocumentGuardian™ and our other mortgage company technology solutions can safeguard customer confidentiality and security, please contact us.

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Topics: DocumentGuardian mortgage documents security