It should be surprising that considering the current investments in PropTech, real estate has been slow to adopt innovation. But this...
Cybersecurity in Real Estate: Securing the Foundation with Cybersecurity Compliance
At first glance, the real estate industry might seem like an unlikely target for cybercriminals. However, given the amount of sensitive financial and personal information exchanged in real estate transactions, it is understandable why many cybercriminals have set their eyes on the industry.
Cybersecurity is becoming progressively crucial for the real estate industry, and real estate experts should take proactive measures to guarantee their safety and that of their clients. This includes implementing robust cybersecurity protocols and confirming that all parties implicated in a transaction possess complete knowledge of potential risks and take appropriate preventive measures. Failure to do so may lead to significant financial losses and reputational damage.
In this piece, we will scrutinize why cybersecurity is growing in significance in the real estate sector, investigating the most significant threats experienced by the industry, the financial implications of cybersecurity breaches, and practical actions that can ensure the security of real estate professionals and their clients against these threats.
In this article:
The importance of cybersecurity compliance in real estate
As the impact of PropTech on the real estate industry continues to rise, it has become more critical than ever to prioritize cybersecurity compliance. But what exactly does this term mean?
Cybersecurity compliance involves following established standards and regulations to safeguard delicate information from cyber threats. In the context of real estate, it includes protecting client information, financial data, and transaction details from individuals seeking to exploit the vulnerabilities in digital systems.
Businesses and experts in the real estate sector that do not conform to the cybersecurity guidelines face the risk of severe data breaches.
Besides the risk of data breaches, failing to comply with cybersecurity regulations can have legal implications. State and federal laws govern the real estate industry, and violating these laws can lead to hefty penalties and legal actions.
Types of cybersecurity threats in real estate
Now more than ever, the real estate industry relies on technology to facilitate transactions, manage data, and bridge the gap with clients. However, this reliance on technology comes with its unique risks of cyber threats, which can compromise the security and privacy of sensitive information.
Let’s look at some of the biggest cybersecurity threats facing the real estate industry today.
#1 Phishing attacks
These attacks entail deceiving individuals into divulging confidential information such as login credentials, credit card details, or additional personal data by sending them an email or any other message that looks like it comes from a reputable or authentic origin, like a bank or mortgage lender.
Phishing attacks usually include a message that contains a link or attachment that, when clicked or opened, will give the hacker unauthorized access to steal information and money or install malware on the user’s device.
Hence, real estate professionals must be cautious of suspicious emails to prevent these attacks and go the extra mile to verify the source before clicking on any links or attachments. It is also encouraged to use anti-virus technology to detect and block harmful content.
#2 Social engineering attacks
These attacks include a group of malicious activities aimed at tricking users into giving away sensitive information or performing actions that can harm the security of their systems.
In a social engineering attack, the perpetrator first checks the target victim’s background to gather necessary information, such as potential entry points, to initiate the attack. Then, the attacker moves to gain the victim’s trust and furnish the stimuli for the next set of actions that break security practices.
Real estate professionals may fall victim to social engineering attacks in this manner, such as when a hacker impersonates a client or vendor and takes advantage of that means to gain access to sensitive information.
To avoid falling for social engineering attacks, it is crucial to have a clearly outlined procedure for verifying the identity of clients and vendors and educating employees about the risks of sharing sensitive information.
#3 Ransomware attacks
A type of malicious software known as ransomware encrypts data stored on a target’s device, rendering it inaccessible, and subsequently extorts the victim for compensation in return for the decryption code.
Perpetrators of this attack usually demand cryptocurrency payment to ensure anonymity but may occasionally employ other routes. Once the victim’s files are encrypted or hidden behind a password, a text file is made available to them, which provides instructions on making the ransom payment and unlocking the files.
It’s crucial to emphasize that despite the ransom being paid, cybercriminals are not guaranteed to provide the decryption code or unlock the documents. The victim can only hold out for a favorable outcome in such scenarios.
Ransomware attacks can particularly damage real estate professionals, as they may lose access to essential data and face reputational damage. Consistently backing up information, setting up anti-virus software, and educating staff to recognize and notify suspicious activities are some actions that can assist in preventing such attacks.
The consequences of a data breach can be devastating for both real estate companies and their clients, with potential financial losses, damage to reputation, and legal liabilities at stake. However, implementing cybersecurity is not a one-size-fits-all solution: it involves acquiring a nuanced understanding of unique risks and challenges of the target industry and applying customized strategies that address those specific vulnerabilities. CEO, ASPER BROTHERS Let's Talk
#4 Denial of Service (DoS) attacks
These involve overwhelming a website, network, or server with traffic to render it inaccessible or unavailable to users.
This attack is typically accomplished by flooding the targeted servers or resources with superfluous requests such that the systems become overloaded and cannot fulfill some or all of the legitimate ones.
Real estate websites may be targeted by these attacks, leading to downtime and, subsequently, loss of revenue. Real estate companies can prevent these attacks by employing a web hosting service that offers DoS protection, regularly monitoring traffic to detect abnormal patterns, and implementing firewalls and other robust security measures that can block malicious traffic.
#5 Password attacks
Cybercriminals constantly try to guess or steal passwords that can give them unauthorized access to systems or data. Any real estate professional that uses weak passwords or often reuses passwords across multiple accounts may be susceptible to these attacks. To avert password attacks, it is best to constantly utilize solid and unique passwords, enable multi-factor authentication, and educate staff members concerning the dangers of password reuse.
It’s crucial to allocate some time to grasp the risks linked with each threat and adopt the necessary measures to shield sensitive data and systems.
The cost of cybersecurity breaches in real estate
The cost of cybersecurity breaches in real estate goes beyond just financial losses, as they can also bring reputational damage to the business involved.
Real estate companies are responsible for managing a considerable volume of sensitive information, varying from financial data to the personal details of clients and staff, rendering them an essential target for cybercriminals.
According to IBM Security’s report of 2022, the average data breach cost is approximately $4.35 million. However, in reality, that amount may be surpassed for real estate companies, given the massive amount of funds implicated in transactions and the high level of trust clients place in real estate professionals.
Besides the direct financial costs, cybersecurity breaches can leave an indelible mark on a real estate company’s reputation.
Clients and customers may lose confidence in a business if they discover their sensitive information is not protected adequately. And this can lead to loss of business and potential legal action.
In addition, there might also be costs associated with remediation and recovery from a breach, including legal fees, PR expenses, and IT costs.
Improving cybersecurity in real estate: 5 best practices
To protect your business from the above-mentioned losses, it is crucial to implement specific steps that help safeguard sensitive information stored and exchanged on real estate platforms.
Below, we have outlined 5 most effective strategies for increasing cybersecurity in the real estate industry.
#1 Risk assessment
One of the first critical steps in improving cybersecurity in real estate is conducting a thorough risk assessment. This involves closely identifying the organization’s network, systems, and procedures to identify potential loopholes and vulnerabilities.
When performed regularly, risk assessment can help real estate professionals nip potential threats before they can cause any damage.
#2 Implementing strong password policies
Passwords are usually the weakest link in cybersecurity. To mitigate the risk of a data breach, real estate professionals must enforce strong password policies.
It may involve taking measures such as requiring complex and unique passwords for all user accounts, regularly changing passwords, and implementing multi-factor authentication when possible.
Encryption protocols can protect data by converting it into a code that is only decipherable with a specific key. Real estate companies can take advantage of this by encrypting confidential data, such as customer details and financial records, to ensure that the intruder cannot read the stolen data in the event of a data breach.
#4 Regular employee training
Data breaches often occur due to employee errors or negligence, such as falling victim to a phishing scam or using weak passwords. By coaching and instructing staff members regarding the most effective methods for cybersecurity, real estate companies can decrease the number of human error-triggered data breaches.
#5 Regularly update systems and software
Cybercriminals are enormous fans of outdated software, as they can easily exploit its vulnerabilities to access a system. Therefore, real estate professionals must remain up-to-date with the most recent security patches and software upgrades.
The real estate industry is progressively becoming a focal point for cybercriminals because of the extensive volume of confidential information exchanged during transactions. This has further emphasized the significance of cybersecurity.
Advancements in technology, which have made life more convenient for buyers and sellers in the real estate industry, have likewise enhanced the business’ susceptibility to more sophisticated and dangerous cyber threats.
Implementing robust cybersecurity measures is no more a choice but an imperative for firms that operate in the real estate sector.
Individuals in the real estate industry must prioritize cybersecurity to protect sensitive data, maintain trust with clients, and avoid the disastrous consequences of cybercrime. By embracing a forward-thinking strategy, the industry can safeguard itself and its customers against the growing and detrimental impacts of cyber attacks.
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