Bruce Philips, Chief Information Security Officer for WFG’s WEST division, explains how the pandemic increases vulnerability for email fraud.

Like every segment of financial services, companies across the mortgage and real estate sector had to quickly adjust to the threat of COVID-19. That means increased use of existing technology, as well as a push to adopt under-utilized processes such as remote notarization.

All this comes as America shelters in place with near-total reliance on the Internet for communication. As office workers continue to work from home, forward-looking executives are seeking cybersecurity solutions to protect their businesses from the growing, long-term threat of email fraud.

In March, as the pandemic was gaining a foothold, the FBI was already reporting an increase in phishing attempts. By May, according to Bruce Philips, Chief Information Security Officer at WEST, a Williston Financial Group company, the Bureau was seeing a quadrupling of fraud reports on its Crime Complaint Center.

We recently spoke with Phillips to learn more about how COVID-19 is impacting the mortgage industry, his own company and workload, and the demand on WEST’s cybersecurity services, Westprotect™, which will roll out to the larger public in September.

WEST is WFG’s marketing and technology division, which includes Phillips’ team of enterprise security professionals. They provide information security expertise, tools and services that both warn and protect companies in and beyond our industry, including those under the WFG umbrella, when a cyberattack is active or imminent. WFG Chairman and Founder Patrick F. Stone asked Phillips to create an in-house cybersecurity system to shield WFG National Title Insurance Company agencies, who were increasingly coming under attacks, from mail fraud and other malicious Internet activity. Since soft-launching WESTprotect, Philips and his team have averted more than $19.6 million in wire fraud away from customers.

Here’s his take on how COVID-19 is changing the world of cybersecurity and what WEST is doing in response:

How has COVID-19 impacted cybersecurity?

The reality is, scammers adapted to the pandemic quicker than the industry did. The upheaval in how business is conducted has been a boon to the global cybercrime industry. People are now working from home – many for the first time – and finding themselves completely reliant on the Internet and emails for communication. Based on discussions I’ve had within the industry, we’re probably seeing a six-time increase in wire fraud attempts and a doubling in their success rate.

Most people haven’t been taught to recognize the difference, for instance, between an authentic CDC email and a bogus facsimile from a scammer. And often we are none the wiser. Many of the perils our customers face stem from the vulnerability of being lured into a situation that they are made to believe is COVID-19 related.

We had a situation where an attacker, pretending to be the lender, said to a home buyer that, because of COVID, the lender moved up the closing and “we had to change our bank account so here are your new wiring instructions.” Five days and $183,000 later, the buyers went to closing thinking they were ready to close, only to be asked by the lender, “When are you going to wire the money?”

That’s why it is more important than ever to make sure that we educate businesses across the entire vertical about the huge potential danger for lenders, agents and consumers and help them more readily recognize when something seems out of place

How has the pandemic impacted the industry?

In a word, COVID-19 has changed everything about the mortgage industry as it interacts with cybersecurity, and that has meant a mountain of work my team has had to adapt to over these past several months in order to keep up and try to stay ahead in this new working environment.

And to throw gas on the fire – this is happening while the market is booming. With interest rates so low, everyone is refinancing, which is just slamming the business across the entire vertical, from mortgage origination all the way down to the closing.

From the technology stack perspective, the challenge is not just figuring out if it functions in this new work environment, but whether your tech stack is agile enough to allow work to be done anytime, anywhere and on any device safely. The biggest hurdle to changing the technology stack to adapt to this new way of working comes down to security.

It’s a lofty goal and it brings a lot of risks. It’s one of the challenges that we have to think around as we come into the new normal. I don’t see everyone rushing back into offices.

How has COVID-19 changed how WEST operates?

For WEST, the pandemic has meant working as a completely remote team within a larger organization, while accommodating changes COVID-19 has brought to the life of each team member and client.

Because we’ve always worked in split teams, with some working from home and others in the office, we were prepared for the shift to remote working. But now that everyone is working remotely, it has somewhat leveled the playing field, which is important in that there is greater awareness of the challenges of working remotely.

For instance, it means remote workers were generally left out of the kind of casual office conversations – like breakroom chats – that can be informative. Those conversations aren’t happening for anyone anymore. Still, that personal interaction is of utmost importance and so my team tries to incorporate that feel by starting each virtual meeting with conversations that allow employees to talk about family and personal projects.

There is a technology change that has happened, but the biggest change is systemic. That’s been a fairly challenging development that will endure for the long term. How we now live and work has totally changed and the line between what is work and what isn’t has blurred.

Another challenge is distinguishing free time within the work-from-home environment. When you are home all of the time, the weekends and workdays tend to blur together. So it is important to carve out time for hobbies. For me, that has meant reconfiguring my home office space to house my collection of guitars and getting reacquainted with brewing beer. 

NEXT Mortgage News logo

Stay in the know

Get the daily intel that impacts your customers, employees and market. 

Up NEXT eNewsletter — Industry news

Thank you!

Share This