In 2004, the National Cybersecurity Alliance and the U.S. Department of Homeland Security designated October as Cybersecurity Awareness Month to help individuals stay safe online. Since that time, internet access has skyrocketed, storage has moved from the office to the cloud, and cybersecurity threats have grown exponentially.
Total spending on cybersecurity is expected to reach $212 billion in 2025 but investment in your own security framework isn’t enough. Research shows that over a third of data breaches in 2024 were not caused by internal vulnerabilities, but failings of third-parties. This staggering statistic highlights the importance of verifying that third-party vendors have robust cybersecurity programs in place.
In particular, third-party loan servicers have access to extremely sensitive customer data, so breaches can create negative headlines and erode trust in your institution. Fortunately, a SOC 2® audit is an effective method of gauging a partner’s commitment to cybersecurity.
What is a SOC 2® Audit?
SOC stands for systems and organization controls, and it’s a framework that was created by the American Institute of Certified Public Accountants [AICPA] in 2010. The SOC standard is used during a professional audit to evaluate the effectiveness of an organization’s security and privacy protocols.
The SOC 2® examination compares the framework to a company’s methods for treating customer data, particularly when it is stored in the cloud. This detailed, third-party evaluation helps establish trust between third-party service providers and the organizations that partner with them.
What does a SOC 2® audit measure?
During a SOC 2® examination, an independent auditor measures the organization’s compliance with 5 Trust Services Criteria [TSC]. These are:
- Security. Information is protected from unauthorized access.
- Availability. Employees and clients can rely on the systems in place.
- Processing Integrity. Company systems operate as intended.
- Confidentiality. Sensitive information is protected by limiting access, storage, and use of the data.
- Privacy. Sensitive personal information is not available to unauthorized users.
Other security frameworks use a rigid, one-size-fits-all approach to measure effectiveness, while a SOC 2® audit allows controls to be unique to the organization. In other words, each company designs its own controls that best fit the operations and risks, and the auditor determines if the company’s systems and processes comply with TSC requirements.
Like most audits, the SOC 2® examination can result in “findings” – which are areas that need improvement. The auditor then determines if these deficiencies impact their overall decision regarding the outcome of the audit. A “modified opinion” is issued when an auditor finds material issues during the audit or does not have sufficient information to complete the examination. Only companies that have completed the appropriate audit without a modified opinion can display the SOC logo on their website and marketing materials.
Why partner with a loan servicer that has completed a SOC 2® audit?
At its core, a SOC 2® audit helps establish trust. Internal review and self-assessments have their place, but the criteria measured and the processes for establishing quality outcomes can be opaque. Conversely, a SOC 2® audit is completed by an independent third party using a clear set of standards. This independent examination leads to confidence in three main areas – data protection, system reliability, and operational integrity.
Confidence in Data Protection
Customers share sensitive information with their lender – like their Social Security number and financial history. This data must be protected, and a SOC 2® audit helps verify that a loan servicer has effective processes in place to prevent outsiders from accessing it.
The SOC 2® examination includes a wide range of security measures, including access controls, network security, encryption, and incident response plans. Together, these processes are designed to protect customer data from unauthorized access and create a clear plan to respond to any potential security breaches.
Trustworthy and Reliable Systems
Borrowers need to make payments and access their loan information at any time, so reliable loan servicing systems are an important feature to seek in a third-party loan servicer. A SOC 2® audit measures the servicer’s procedures for minimizing downtime and keeping systems available.
Some of the factors that the audit examines are system monitoring, disaster recovery, and backup procedures. Reliability in these areas translates to a dependable experience for both you and your borrowers.
Operational Integrity
Loan servicers handle many borrower transactions each month, so accuracy is another key feature of a loan servicing partnership. Operational errors can lead to borrower disputes, compliance issues, and damage to your reputation. Fortunately, a SOC 2® audit measures operational controls that assist in preventing these negative outcomes.
For example, the audit would verify that interest calculations are consistently correct, payments are applied to the right accounts, and loan data is not lost or corrupted. This level of scrutiny provides confidence in the foundation of accuracy that is essential for a healthy loan portfolio.
Overall, a SOC 2® audit is an important part of due diligence when choosing a partner in the lending and servicing industries, where errors can have significant consequences. By choosing a loan servicer who has completed a SOC 2® audit, you gain a better understanding of their commitment to security and accuracy.
Partner With AmeriNat for Cybersecurity Confidence
At AmeriNat, we take cybersecurity and the protection of customer data seriously, so we have regularly completed SOC 2® audits since 2018. This independent analysis has showcased our robust internal controls and reaffirmed our processes to control access to sensitive customer information.
When you partner with us for loan servicing, you can trust customer data and relationships are handled with the utmost care. Our team understands the important role a loan servicer plays in protecting your reputation, and we’re committed to maintaining the trust of your customers through robust data security and SOC 2®-certified practices.
To learn more about our loan servicing solutions, contact a member of our team today.
