New Concepts for Protecting Sensitive Data While Real Estate Transactions
Between 2015 and 2017, there was an 1100% increase in real estate fraud in the United States.
As the world of cybercrime becomes more sophisticated, the onus of sensitive data protection is on the parties involved in the transactions. Keeping this reality in mind, we have compiled this list of useful tips, tricks, strategies, and concepts to protect sensitive data in real estate transactions.
The fundamentals of data protection are the same across sectors. However, some measures apply to real estate transactions only. Let’s find out more about data protection in real estate transactions.
New concepts for protecting sensitive data while doing real estate transactions
In the following sections, we’ll cover everything you need to know about protecting your data while transacting for real estate purposes. However, note that cybercrimes are always changing, and fraudsters are developing newer and more elaborate tricks. More than anything else, you must always be aware of the new scams happening in real estate transactions.
Users can transfer sensitive files and documents using these platforms. Learn more about how you can implement this into your day to day work routine.
1. Understand the common threats to sensitive data in real estate transactions
Before delving further, it’s important to understand the basic threats to sensitive data in real estate. We can briefly summarize them as follows:
Cybersecurity threats: Hackers can try to access sensitive data such as financial information and personal identification through email scams or by hacking into computer systems.
Additionally, with the proliferation of the digital world, they might exploit the anonymity of the dark web to trade and sell stolen data, making it imperative for organizations to implement dark web monitoring as part of their cybersecurity measures.
Physical threats: Physical documents containing sensitive data can be stolen, potentially leading to identity theft or fraud.
Insider threats: Employees or contractors who have access to sensitive data may misuse it for personal gain or to harm the company.
Social engineering threats: Scammers try to trick individuals into giving away sensitive data by pretending to be a legitimate company or individual.
Third-party vendor threats: Companies that handle sensitive data on behalf of the real estate company often don’t have adequate security measures in place, leading to data breaches.
Once you’re aware of each of these threats, you can better protect your transactions. Incorporating security measures like a backconnect proxy can significantly enhance your defense against cyber threats. It provides rotating IP addresses that mask your online activities. Hackers will find it hard to target your real estate transactions directly.
2. Ensure the businesses you’re dealing with meet GDPR requirements
General Data Protection Regulation, or GDPR requirements, include rules for businesses such as purpose limitation of data, integrity and confidentiality, and storage limits. Its aim is to protect consumers in the EU region against fraud, scams, and unfair treatment.
You should only deal with businesses that are GDPR compliant because it means they are following the data protection laws set out by the European Union's General Data Protection Regulation. As part of this, personal data must be protected from unauthorized access/misuse, and individuals' personal data must be under their own control.
Dealing with GDPR compliant businesses ensures that your personal data is handled responsibly and in accordance with the law. So before dealing with a real estate business, ensure it’s GDPR compliant.
Understanding GDPR also involves recognizing how personal data is collected and shared online, which directly relates to the question: how is a digital footprint created? A digital footprint is formed every time a user interacts with websites, social media, or other online platforms, leaving behind traces of personal information such as browsing history, login details, and preferences. These interactions contribute to a data trail that can be used for analytics or marketing, but GDPR regulations ensure that individuals maintain control over this data and how it’s processed. By dealing with GDPR-compliant businesses, you can better manage how your digital footprint is created and utilized
3. Use secure communication channels for exchanging sensitive information
A secure communication channel refers to any mode of communication that emphasizes data protection and confidentiality. When engaging in any real estate transaction, monetary or non-monetary, always use secure communication channels.
Here are some secure communication options you can use:
Encrypted email: This is a secure way to send and receive emails that contain sensitive information.
Virtual private network (VPN): A VPN allows for secure communication over the internet by encrypting data sent between devices.
Secure file-sharing platforms: Users can transfer sensitive files and documents using these platforms.
Secure messaging apps: Consider using apps such as Signal that offer end-to-end encryption for secure communication.
In-person meetings: Secure meetings can be held in private, confidential locations to discuss sensitive information.
4. Implement strong passwords and authentication measures
Strong passwords and authentication measures are an important part of protecting sensitive data since they’re the easiest way to prevent unauthorized access.
Strong passwords should be long, complex, unique, and confidential. In addition to passwords, it is also essential to use additional authentication measures, like two-factor authentication (2FA) or multi-factor authentication (MFA). These measures require you to provide additional proof of your identity before accessing sensitive information. It helps prevent unauthorized access even if a password is compromised.
Secure passwords and authentication measures are crucial for protecting sensitive data and preventing breaches.
New technologies for protecting sensitive data
Cybersecurity is constantly improving to make online transactions safer. Cutting-edge data protection technologies include online, offline, and hybrid methods to secure sensitive information. Here are the most noteworthy developments you should pay attention to:
Blockchain: Blockchain technology uses a decentralized database to store data, making it difficult for hackers to access or alter it.
Artificial intelligence (AI) and machine learning: AI and machine learning have the potential to identify and prevent cyber attacks in real time.
Encrypted data storage: Encrypted data storage technologies use advanced encryption algorithms to protect data at rest, making it difficult for unauthorized parties to access the data.
Identity and access management (IAM) systems: IAM systems help to manage and control access to sensitive data, granting only authorized users access to the data.
Biometric authentication: Biometric authentication uses unique physical characteristics like fingerprints or facial recognition to verify identity, providing an additional layer of security.
5. Use artificial intelligence to detect and prevent data breaches
Among the emerging data protection technologies, artificial intelligence and machine learning deserve special focus. Artificial intelligence and machine learning are revolutionizing sensitive data protection with new ways to detect and prevent cyber-attacks.
AI and machine learning algorithms can analyze vast amounts of data to identify patterns and anomalies that indicate a security threat. They can also learn from past attacks and adapt to new threats, making them more effective at detecting and preventing future attacks.
As we start using AI and machine learning more intensively in real estate transactions, we’ll be able to protect sensitive data better than ever.
AI and machine learning significantly bolster data protection in real estate transactions by enabling anomaly detection for early threat identification, automating compliance monitoring, and offering advanced encryption methods.
These technologies enhance authentication through sophisticated means like biometric verification and improve fraud detection by analyzing transaction data for irregularities. Additionally, AI can secure transactions via smart contracts on the blockchain and streamline due diligence processes for real estate transactions.
6. Utilize virtual reality for secure property showings
One of the most exciting recent technological innovations is virtual reality (VR). Interestingly, it has found a unique use case in the real estate industry. VR real estate tours are a cost-effective and efficient way for real estate agents and brokers to show properties to numerous potential buyers.
At the same time, it also protects buyers from potential scams and shady schemes.
If you’re a buyer looking for a new property, virtual reality can bring thousands of properties to your doorstep. You can walk through the property and see it from different angles and get a sense of the layout and flow of the space.
Over the next several years, the use of VR in real estate is expected to increase significantly.
When selecting cybersecurity insurance, start by assessing your organization's specific risks and determining the necessary coverage scope, including data breach costs, ransomware, and business interruption.
Opt for insurers with robust cybersecurity expertise, offering clear policy details on coverage and exclusions. Compare quotes from multiple providers, paying close attention to premiums, deductibles, and policy limits.
Ensure the policy aligns with regulatory requirements and your cybersecurity practices. Investigate the insurer's claim support and services, and understand the claims process upfront. Regularly evaluate and update your insurance coverage to match evolving business needs and cyber threat landscapes, maintaining optimal protection and compliance.
7. Learn about cybersecurity insurance
Cybersecurity insurance protects businesses and individuals from the financial consequences of cyberattacks and data breaches. It generally covers the cost of responding to a data breach, the cost of recovering from a cyberattack, and the cost of defending against lawsuits related to the breach.
As cyberattacks become more commonplace and sophisticated, the need for cybersecurity insurance will increase. However, you can stay ahead of the curve by getting yourself insured against online fraud and scams. It will also protect you from any real-estate-related fraud that’s mostly operated on the internet.
8. Encrypt sensitive data wherever possible
In encryption, data is transformed into an unreadable form that can be accessed only with the correct decryption key. This makes it much more difficult for hackers or unauthorized individuals to access the data. In addition, it prevents them from using it to their own advantage.
Encrypting sensitive data is especially important you’re transferring data over the internet or storing it on a device that could be lost or stolen. Additionally, it is crucial to encrypt data stored in the cloud and on shared servers.
If you want to secure your sensitive data, encrypting them whenever possible is an effective approach.
9. Learn to identify real estate scammers
Before you agree to any real estate deal, research the property and the seller to ensure they are legitimate. Look for information about the property and the seller online, and be wary of deals that seem too good to be true. Verify the identity of the seller through a government-issued ID or other official documents.
Always be wary of unsolicited offers, especially if they come from someone you do not know. It is possible for scammers to fool you into thinking a property you didn't know was for sale is a good deal.
Once you understand the common traits of real estate scammers and learn to recognize patterns, you’ll get a sense of who is genuine and who is fake. But to get to that place, you will need to always keep learning about new scams and crimes in the real estate market.
You can be safer if you understand how these threats work.
Stay one step ahead of scammers with these data safety principles
Most cybercrimes have their origins in human negligence.
A huge percentage of online crimes and fraud can be prevented by being more aware of cybercrimes and how they’re carried out. More than anything else, the purpose of this guide is to make you enlighten you about the nuances of fraud in real estate transactions.
Author bio
Atreyee Chowdhury is a freelance content writer with more than 10+ years of professional experience. She is passionate about helping SMBs and enterprises achieve their content marketing goals with her carefully crafted and compelling content. She loves to read, travel, and experiment with different cuisines in her free time. You can follow her on LinkedIn.