Mortgage

Securing Your Mortgage Business: The Critical Role of SOC Reports in Vendor Management

The mortgage industry faces an ever-growing list of compliance requirements and security challenges. System and Organizational Controls (SOC) reports have emerged as a critical tool for demonstrating a service organization’s commitment to robust internal controls and data security. Public accounting firms perform SOC examinations to help address organizational risks. Lenders should request a SOC from critical vendors, especially those providing services or IT solutions and third parties. Read below to learn why it is important that you request your vendors to be SOC-compliant.  

Why Should You Ask for SOC Reports from Your Vendors? 

Third parties and key vendors to independent mortgage banks need to provide you with a SOC report because they are critical to your risk management posture. SOC reports can give a view into the financial and operational health of your service organizations, helping you understand how they manage risks and control their processes to keep your company secure and meet their service commitments. This information is crucial to evaluate the potential risks associated with partnering with these third parties and service organizations. 

SOC reports serve to drive trust and transparency with both internal and external stakeholders. By undergoing independent audits and obtaining SOC reports, third parties and vendors demonstrate their commitment to upholding high security and compliance standards. This is essential in the mortgage industry where vendors handle sensitive data, such as borrower PII. If they don’t effectively protect your customers’ sensitive data, it could open you up to risk and make clients wary of working with you. SOC examinations are performed by Public Accounting Firms, so you can trust that your vendors are upholding high security standards and protecting your clients’ data effectively.  

Requiring SOC audits can increase efficiency while reducing compliance costs and time spent on audits and vendor due diligence processes. For independent mortgage banks, ensuring your third parties and key vendors have current SOC reports can streamline the assessment of their security controls and regulatory compliance, saving you time and resources in the long run. 

Overall, SOC reports play a critical role in helping independent mortgage banks assess the reliability and security posture of third parties and key vendors, drive trust and transparency, streamline compliance processes, and protect your business. 

SOC reports shouldn’t be seen as a way to check a compliance box but as a way to actively protect your business, clients, and reputation. Your security is only as strong as your weakest link. Don’t let that weak link be a vendor you haven’t properly vetted. Make SOC reports a standard part of your vendor management process to ensure you partner with secure vendors.  

Get Started Today 

Don’t know where to start? Seek guidance from Richey May’s experts. We understand the unique challenges independent mortgage lenders face. Our expertise allows us to provide tailored insights into System and Organizational Controls (SOC) reports, which are crucial for compliance and risk management in today’s competitive landscape. Contact us at info@richeymay.com today.