Cybersecurity breaches are a significant threat to any business, but real estate professionals are especially vulnerable. Realtors collect sensitive customer information like finances, Social Security numbers and contact details — data hackers would love to get their hands on. The consequences of a major data breach could potentially sink a company. A 2022 IBM report estimated the average cost of data leaks at a staggering $4.35 million.
Rigorous cybersecurity practices are a mandatory aspect of real estate business operations. Realtors need to guard against cybersecurity risks and implement comprehensive data security protocols. Here are the cybersecurity risks realtors need to protect against and how to implement comprehensive data security protocols.
Why real estate professionals are a target for cybercrime
Not only do real estate companies store precisely the information that hackers are after, but they also utilize digital payment platforms, collaboration tools and "property tech" solutions that expose them to cyberattacks. Additionally, many realtors operate out of small offices that lack the resources for a sophisticated cybersecurity suite.
Hackers are very interested in real estate offices because they store customer information and realtors must work with it daily. It only takes one successful phishing attempt or a careless realtor to let cybercriminals access bank account details or mortgage documents.
Real estate executives implement cybersecurity solutions and strict protocols to mitigate these risks. Protecting against data breaches and maintaining client trust can be achieved by proactively securing online information.
Common cybersecurity threats to watch out for
Phishing: One common type of cyberattack is when hackers use social engineering tactics to trick individuals into providing sensitive information. As part of social engineering, phishing is pretending to be a trusted business to get private information.
Although it's easy to spot scam attempts with spelling errors, poor grammar and odd syntax, sophisticated fraudulent emails can be challenging to identify. For example, hackers may design emails virtually identical to communications from a trusted brand. It's essential to exercise caution when opening emails and clicking on links to avoid falling victim to a phishing scam.
Ransomware: When hackers use malware to attack a network and demand payment in exchange for ceasing their activity and disclosing any stolen information, it's called a ransomware attack. Small companies are especially vulnerable to this type of cyber threat, as they likely have weaker protections, and a data breach of this scale could disrupt business operations.
Human error: Not surprisingly, human error accounts for most cybersecurity breaches. Verizon's 2022 Data Breach Investigations Report found that 82% of data breaches were caused by human factors such as stolen credentials, phishing scams, and employees failing to adhere to established company cybersecurity measures.
Five cybersecurity strategies for the real estate industry
The increased digitization of real estate operations means cybersecurity is more important than ever. The following steps provide an effective model for preparing for and responding to cyber threats:
- Risk assessment: Evaluate the company's cybersecurity infrastructure to identify potential security gaps. Use this information to create an affordable, efficient and effective long-term cybersecurity plan tailored to the business's data security needs. Implement specific procedures for monitoring potential malicious activity and risk exposure, mainly if the company works with third parties with sensitive data access.
- Employee training: Include cybersecurity awareness in company training and the onboarding process. Ensure employees are fully educated on spotting phishing and ransomware attacks and update training programs as cybercriminals adjust their strategies. Regular phishing tests are an excellent way to determine if employees follow protocol. Also, caution staff against oversharing on social media, particularly regarding work projects or potentially identifying client information.
- Improve access control: Hackers exploit cybersecurity weaknesses to access accounts and databases. Protect against this with rigorous security measures and consistent internal user access policies. For example, employees must only use their business email for work purposes and set up two-factor authentication for remote or hybrid workers. Ensure that organizational email encryption and anti-malware programs are always current and that personal and professional mobile apps aren't tracking and sharing sensitive information.
- Proper data storage and disposal: In addition to maintaining standard electronic security measures like email encryption and firewalls, bolster real estate cybersecurity standards with regular computer security scans, two-factor authentication, password managers and vulnerability assessments. Follow established FTC guidelines for consumer data disposal to guarantee personal information cannot be accessed by unauthorized users, read or reconstructed after deletion.
- Have a Plan B: Expect the best but be prepared for the worst. Ensure that the security team has a plan to deal with data breaches if they occur. Compile documentation outlining the company's intended post-breach action plan, including templates for client notification and public statements. Note that there are federal and state legal requirements for data breach notifications: make sure the company complies.
The continuous digitization of our personnel and professionals poses nearly as many dangers as advantages, including the risk of data leaks. Cybersecurity breaches may lead to irreversible financial losses and a destroyed reputation, so real estate businesses must commit time and resources to implement a comprehensive cybersecurity plan. After implementing this, real estate businesses should regularly evaluate and update their security measures to adapt to the ever-changing cyber threat landscape. Realtors can build trust with their clients and protect their sensitive information by prioritizing data security, ultimately leading to a more successful and sustainable business.