Hey there, you’re on the hunt for a new loan origination system and want to make sure you choose one with strong security. Smart thinking. As digital transactions become increasingly common, so do the risks. The last thing you need is your system getting hacked, customer data compromised, and loans illegally approved or denied. What a nightmare. The good news is with some due diligence, you can find an LOS provider that makes security a top priority. Here are a few must-haves to look for to fortify your loan origination system against cyber threats. Read on to make sure you’re covering all your bases so you can choose an LOS that will safeguard your business and give you peace of mind.
Understanding Loan Origination Systems and Their Vulnerabilities
A loan origination system (LOS) is the software platform where loan applications are processed. As more LOS platforms move to the cloud, it opens them up to various cyber threats that could compromise sensitive customer data or disrupt operations.
To fortify your LOS, first understand how it could be targeted. Hackers often look for weaknesses in outdated software, unpatched systems, or improperly secured access points. They may try to gain unauthorized access through phishing emails or by brute force attacking login pages. Once in, they can install malware, steal data, or lock you out of your own system by ransomware.
Some precautions you can take:
-Keep all software up-to-date with the latest security patches. This includes your LOS platform as well as any integrated third-party systems.
-Use strong, unique passwords and two-factor authentication whenever possible. Enforce strict password policies for all users.
-Closely monitor for suspicious login activity or unauthorized access attempts. Set up alerts to notify you right away of any potential intrusions.
-Encrypt all sensitive data, especially customer personal information and financial details. Encryption helps ensure that any stolen data cannot be accessed or used.
-Educate your employees on cyber risks and best practices. Phishing simulations and security awareness training can help minimize human error.
-Have an incident response plan in place in case of an attack. Work with your LOS provider to determine how to isolate any compromised systems, restore data, and get back to normal operations as quickly as possible.
With constant vigilance and a proactive approach to security, you can help safeguard your LOS and protect against the damaging impacts of a cyberattack. While no system is 100% foolproof, doing everything in your power to limit vulnerabilities and risks will give you more confidence and peace of mind.
Top Cybersecurity Threats Facing LOS Today
When it comes to your loan origination system, cybersecurity should be at the top of your priorities list. As more and more of the lending process moves online, the threats facing LOS’ grow exponentially. Let’s take a look at some of the top cyber dangers you need to fortify against.
Data breaches
Sensitive client data like social security numbers, bank account info, and financial history are a goldmine for cybercriminals. A single data breach could compromise thousands of clients’ private details, resulting in identity theft and financial fraud. You’ll want to implement strong data encryption, multi-factor authentication, and regularly monitor for any unauthorized access.
Ransomware
Ransomware attacks are on the rise, where hackers lock you out of your own system and hold your data hostage for a ransom. This could grind your lending operations to a halt. Be extremely wary of phishing emails and malicious links, keep all your software up-to-date, and have a disaster recovery plan in place.
DDoS attacks
A distributed denial-of-service or DDoS attack aims to overload your system with traffic, causing it to crash. They’re often used as a distraction tactic to mask other hacking attempts. Use a reputable DDoS mitigation service to filter out malicious traffic while keeping your system online.
Social engineering
Some of the most damaging hacks start with social engineering, where cybercriminals manipulate people into giving up sensitive info or access. Educate your team on phishing and vishing scams, enforce a policy of verifying requests before acting, and limit employee access to only what’s needed for their role.
With cybercrime on the rise, the threats facing your LOS are real. But by making security a priority, staying vigilant, and taking appropriate precautions, you can help ensure your system and your clients’ data remain protected.
Implementing Strong Access Controls for LOS
To protect your loan origination system (LOS) from cyber threats, implementing strong access controls is crucial. As a lender, your LOS contains a treasure trove of sensitive data – everything from personally identifiable information (PII) to financial records. Restricting access to only authorized users is one of the best ways to lock down this data.
User Access Management
Designate certain staff members as administrators who can grant, modify or revoke access privileges. For standard users, implement the principle of least privilege, which means giving them the minimum access needed to do their jobs. Regularly review user access and disable any unused or outdated accounts.
Use two-factor or multi-factor authentication whenever possible. Requiring logins and passwords along with a code sent to a user’s phone or an app like Google Authenticator creates an extra layer of security for your LOS.
###Role-Based Access
Create distinct roles for different job functions, like underwriter, processor or closer, and assign access rights based on a user’s role. For example, underwriters would have access to application data but not closing docs. This limits what any one user can see and do in the system.
### Logging and Monitoring
Monitor your LOS regularly to detect any unauthorized access attempts or suspicious behavior. Review access logs to see who is logging in, what they are accessing and if their activities match their job duties. Many LOS platforms offer built-in auditing and logging features to simplify this process. Look for any unusual login times, locations or frequency to identify possible threats. Respond quickly to any detected issues to limit damage.
Following strong access control best practices for your LOS will help ensure sensitive borrower data stays private while still allowing authorized staff to work efficiently. Performing regular audits and monitoring gives you insight into how your LOS is being used and can uncover vulnerabilities before they are exploited. While cybercriminals continue to target lenders, focusing on access management and data security helps fortify your LOS against attack.
Encrypting Sensitive Data in Loan Origination Systems
Protecting sensitive data is crucial for any loan origination system. As a lender, your customers’ personal and financial information is one of your most valuable assets. Encrypting this data helps ensure it remains private and secure.
Encrypting Data at Rest
Data “at rest” refers to information stored in your Celestiq LOS database. Encrypt this data using strong encryption algorithms like AES (Advanced Encryption Standard) 256-bit to scramble the data and make it unreadable without the proper key. This way, even if there is a data breach, the encrypted data will be useless to attackers.
Encrypting Data in Transit
It’s not enough to just encrypt data at rest. You also need to encrypt data “in transit” as it moves between your LOS and other systems. Use a secure network protocol like SSL (Secure Sockets Layer) or TLS (Transport Layer Security) to encrypt all data transferred between your LOS and web browsers, mobile apps, and third-party systems. This prevents eavesdropping and “man in the middle” attacks where data is intercepted during transfer.
Requiring Strong Passwords
Implement a strong password policy that requires users to create passwords with a minimum of 8 characters, including a mix of letters, numbers and symbols. Enforce regular password rotations every 90 days. Passwords are the first line of defense for your LOS, so make sure they are difficult to guess. Consider using two-factor authentication as an extra layer of protection for user logins.
Restricting Access
Carefully control who has access to sensitive data and systems. Only provide the minimum amount of access needed for employees and third parties to do their jobs. Monitor access and watch for unauthorized logins. Remove access immediately when employees leave the organization.
By taking a multi-layered approach to data security with encryption, strong access controls, and vigilant monitoring, you can fortify your LOS against cyber threats. Customers will feel confident knowing their information is well protected, allowing you to build trust and loyalty. Protecting data in today’s digital world requires constant effort and adaptation as new risks emerge, but the investment in security is well worth it.
Securing APIs and Integrations in LOS
To secure your loan origination system’s APIs and integrations, you need to take a few important steps. As a software provider, Celestiq builds security into the core of our LOS platform and provides guidance for our clients to strengthen their cyber defenses.
First, enable two-factor authentication (2FA) for all user logins to your LOS. This adds an extra layer of protection for user accounts by requiring not just a password but also a security code sent to the user’s phone. Two-factor authentication helps prevent unauthorized access from stolen login credentials.
Next, use a web application firewall (WAF) to monitor and control traffic to your LOS web application. A WAF can help block common web attacks like SQL injections, cross-site scripting, and DDoS attacks. Celestiq’s LOS platform offers a built-in WAF, or you can use a third-party solution. Be sure to keep WAF rules up to date to protect against the latest threats.
It’s also critical to use secure coding practices for any custom code or integrations with your LOS. This includes validating all input data, using parameterized queries, and avoiding hardcoded sensitive data. Secure code helps eliminate vulnerabilities that could be exploited by hackers. Celestiq’s developers follow industry best practices for secure software development to deliver a robust LOS platform.
Limit access to APIs and only provide keys to trusted partners. All API access should require authentication to control who can access your LOS APIs. Monitor API usage regularly for any suspicious activity. Restrict API keys to specific IP addresses or domains when possible.
Keep all LOS software and components up to date with the latest patches. Software updates frequently contain security patches to fix vulnerabilities. Make updating a priority to ensure your LOS has the latest protections.
Cyber threats are constantly evolving, so maintaining strong security for your loan origination system requires ongoing effort. But by following best practices like enabling 2FA, using a WAF, writing secure code, limiting API access, and keeping systems patched, you can fortify your LOS platform against many common cyber attacks.
Conducting Regular Security Assessments of LOS
Conducting routine security assessments of your loan origination system (LOS) is critical to protecting sensitive data and maintaining compliance. As cyber threats evolve, your LOS may become vulnerable to new exploits if left unmonitored.
Penetration Testing
Hire an independent cybersecurity firm to perform penetration testing, also known as ethical hacking. They will attempt to hack into your LOS to uncover any weaknesses before malicious actors can exploit them. Pen testing should be done at least annually, if not biannually. Ask the firm to check for vulnerabilities like SQL injections, cross-site scripting, and privilege escalation.
Vulnerability Scanning
Use automated vulnerability scanners to regularly scan your LOS for known security holes. Scanners search for vulnerabilities that could allow unauthorized access like outdated software, improper permissions settings, and weak passwords. They provide reports that show which vulnerabilities were detected so you can promptly patch them. Vulnerability scanning should be done monthly or quarterly.
Risk Assessments
Conduct a risk assessment of your LOS to determine the likelihood and impact of potential threats. Review access controls, data encryption, employee training, and other security measures currently in place. Also analyze threats that could specifically target loan origination systems. The risk assessment will identify priorities to strengthen your security posture based on the severity of threats. Risk assessments should be done annually.
Policy Reviews
Review your data security policies, procedures and controls regularly to make sure they still meet compliance requirements and effectively protect sensitive data in your LOS. Watch for changes in regulations like GLBA, FACTA and state laws. Revise policies as needed to address new threats, close security gaps, and keep your LOS compliant. Policy reviews should be done at least once a year.
Performing these routine security checks of your loan origination system, like vulnerability scanning, risk assessments, and policy reviews, ensures your LOS stays secure and compliant over the long run. While no system is 100% hack-proof, conducting regular security assessments significantly reduces cyber risks and keeps your LOS, and the sensitive data within it, protected.
Training Employees on LOS Cybersecurity Best Practices
To fortify your loan origination system (LOS) against cyberthreats, properly training your employees on security best practices is essential. As the human element is often considered the weakest link in cyber defenses, equipping staff with the knowledge and tools to identify and mitigate threats can significantly reduce risk.
Conduct Regular Cybersecurity Awareness Training
Implement mandatory cybersecurity awareness training for all employees at least once a year. This helps ensure staff stay up-to-date with the latest risks, and are reminded of the role they play in protecting company data and systems. Focus training on topics like phishing email identification, strong password practices, and information security policies.
Educate Employees on LOS Access Control
Only authorized individuals should have access to the LOS. Educate staff on proper access request procedures, and the importance of limiting access to only those who need it to do their jobs. Remind administrators to frequently review access lists and deactivate accounts for terminated employees immediately.
Promote Secure Account Management Practices
Encourage employees to use unique, complex passwords for all system accounts and to enable multi-factor authentication when available. Educate staff on the risks of account sharing, password reuse, and writing down or sharing passwords. Promote secure workstation use by training employees to lock workstations when away and be cautious of shoulder surfing.
Report Suspicious Activity Promptly
Explain to employees the importance of remaining vigilant for suspicious system activity or security events and reporting them promptly to the information security team. This could include things like unauthorized access, malware infections, phishing attempts, or stolen account credentials. Early detection of threats is key to minimizing damage.
Providing your staff with cybersecurity know-how and promoting a culture of awareness and shared responsibility will strengthen your defenses and reduce the chances of a damaging cyberattack on your LOS. But while employee education is essential, it does not replace the need for strong security controls and technology solutions to protect your systems and sensitive data. A multi-layered approach is the most effective strategy.
Creating an Incident Response Plan for LOS Breaches
An incident response plan outlines the steps your organization will take in the event of a cyberattack targeting your loan origination system. Having a plan in place will allow you to respond quickly and efficiently, minimizing damage.
Assemble an incident response team
Designate key personnel from IT, security, legal, public relations, and executive management to serve on the incident response team. Define each member’s role and responsibilities in advance so they know how to respond during an actual incident. Provide regular training to keep the team up to date with the latest cyber threats and response procedures.
Have a plan for different scenarios
Your incident response plan should include specific actions to take for various types of cyber events, such as data breaches, denial-of-service attacks, malware infections, etc. Detail how to detect and analyze the incident, contain the damage, eradicate the threat, and recover normal operations. The plan should also specify when and how to notify affected parties, law enforcement, and regulatory agencies.
Practice and test the plan
Conduct fire drills regularly to practice implementing your incident response plan. Rotate different team members into leadership roles during the drills so they gain experience addressing cyber events. Analyze how the practice incidents were handled and update the plan accordingly. Staying well-prepared will allow for an efficient response during an actual LOS breach.
Provide ongoing education
Educate all employees on the dangers of phishing emails, weak passwords, unsecured Wi-Fi networks, and other common cyber risks. Explain how a single lapse in security can compromise the entire loan origination system. Keep training engaging and up to date as new threats emerge. An educated workforce is your first line of defense.
Following these steps to develop and maintain a robust incident response plan will help fortify your loan origination system against cyber threats. Be proactive and stay vigilant, regularly evaluating new risks and updating your strategy. In today’s digital world, it pays to be prepared.
Loan Origination System Cybersecurity FAQs
Cybersecurity should be a top priority for any company handling sensitive customer data, especially in the finance industry. As a provider of loan origination software, we know you likely have some questions about how to keep your system and customer data safe. Here are some of the most frequently asked questions we receive about cybersecurity for loan origination systems:
How can I prevent data breaches?
To avoid data breaches, implement strong security controls like two-factor authentication, role-based access, and encryption. Conduct regular risk assessments to identify and patch any vulnerabilities. Educate your employees about phishing and social engineering attacks. Monitor your system and network for any unauthorized access.
What security standards should my LOS meet?
At a minimum, your LOS should meet PCI DSS for payment security and GLBA for financial data. For the strongest security, aim for compliance with NIST Cybersecurity Framework. These standards encompass encryption, access control, vulnerability management, and more.
How often should I audit my LOS security?
It’s best to perform regular audits of your LOS security – at least annually and anytime there are major changes to your system or business processes. Both internal and third-party audits can help identify risks, ensure compliance, and provide an outside perspective on your security posture.
What security features should I look for in an LOS?
Choose an LOS with built-in security like two-factor authentication, role-based access control, encryption of data at rest and in transit, and an audit trail of user access. The system should enable security policy enforcement and make it easy for your team to control permissions. It’s also ideal if the LOS undergoes regular third-party penetration testing and audits to validate its security.
How can I stay up-to-date with LOS cybersecurity threats?
Monitor cybersecurity news and alerts about vulnerabilities in loan origination software, database platforms, and any other technologies you use. Subscribe to updates from your LOS provider to get patches and updates as soon as they’re released. Staying up-to-date with the latest cyber threats will help ensure your system is protected against new risks as they emerge.
By making cybersecurity a priority, regularly evaluating risks, and choosing an LOS with strong safeguards in place, you can feel confident in the integrity of your system and customer data. But security is an ongoing process, so vigilance and continuous improvement are key.
Conclusion
So there you have it, these are some of the steps you can take to protect your loan origination system and the sensitive data within it. By now, you should have a good sense of the risks and how to mitigate them. Staying on top of security is an ongoing process, not a one-and-done deal. Make it a habit to regularly assess potential vulnerabilities, keep software up to date, monitor for threats, and ensure user access controls are air-tight. The threats facing lenders today are real, but with vigilance and the right safeguards in place you can have peace of mind that your systems and data are well-fortified against cyberattacks. Stay secure!
