There are plenty of potential cyber risks in HOA communities. Threats to data security may not seem like a priority. After all, who would want to target a homeowners association? Yet, cybersecurity remains a top concern among many associations, with both personal and financial data at risk. Fortunately, there are ways to strengthen cybersecurity in an HOA.
What are Cyber Risks in HOA?
Over the past two decades, technology has come a long way. Many HOAs now use websites, email, online banking, and digital record storage. Even associations that rely on paper still have a digital footprint. This is because banks, county offices, and vendors usually maintain electronic records.
Due to this, cybersecurity is essential for all HOAs, regardless of their size or level of technology use. Even one breach could cost the association thousands of dollars and expose sensitive homeowner information. Understanding cyber risks is the first step toward better protection.
Here are the most common cyber risks in HOA communities.
1. Data Breaches
A data breach occurs when unauthorized individuals gain access to protected information. This can involve hacking into databases, stealing laptops, or exploiting weak security settings.
For an HOA, a breach might mean exposing member names, addresses, bank account numbers, and social security information. For example, if an HOA uses a payment portal and it gets hacked, resident payment details could be stolen.
Another common source of breaches is employee negligence, such as leaving a password on a sticky note near a shared computer.
2. Phishing Attacks
Phishing involves tricking people into giving up personal information through fake emails, texts, or phone calls. These messages often look legitimate, mimicking banks, vendors, or even HOA leadership.
For example, a board member might receive an email appearing to be from the HOA’s management company, requesting sensitive login information. If the board member responds, hackers gain access to private HOA systems.
Phishing can also spread malware when victims click on fraudulent links or open dangerous attachments.
3. Ransomware
Ransomware is a type of malware that locks digital systems until a ransom is paid. Hackers encrypt files, making them inaccessible to the HOA.
Imagine the association’s vendor contracts, financial data, and meeting minutes suddenly becoming unreadable. A hacker might demand payment in cryptocurrency to unlock the files.
Even if the HOA pays, there is no guarantee they will regain full access. Restoring systems after a ransomware attack is costly and time-consuming.
How to Mitigate Cyber Threats in HOA Communities
Effective HOA cyber risk management strategies can help prevent and minimize cyber threats. Here are the ways an HOA can strengthen its cybersecurity and protect the community.
1. Conduct a Cyber Risk Assessment
First, an HOA should evaluate its vulnerabilities. A cyber risk assessment can help identify where sensitive information is stored, how it is protected, and potential gaps. For example, the HOA might discover that member lists are kept on an unsecured cloud account. They might also find out that their website has outdated security certificates.
By identifying these weaknesses, an HOA board can prioritize the necessary improvements. In doing so, they can prepare the HOA before a real incident occurs.
2. Create a Cybersecurity Policy
Every HOA needs a cybersecurity policy tailored to its specific operations. This should include clear rules on password protection, file sharing, device use, and breach reporting.
Board members should ensure consistent enforcement when addressing cyber risks in HOA communities. For example, the policy should require strong passwords, mandate two-factor authentication, and limit the use of personal devices for HOA business. The board should review this policy regularly to stay up-to-date on potential threats.
3. Control Access
Not every board, committee, or staff member needs access to all HOA information. By implementing access control, an HOA can limit who can view, edit, or transfer sensitive data.
For instance, only the treasurer and president might access bank account details. Lower-level staff could be limited to general homeowner information. When there are fewer people who have access to critical data, there are fewer opportunities for a breach.
4. Use Passwords
Strong passwords are a basic but crucial layer of protection. All of the devices, accounts, and platforms that the HOA uses should come with password protection.
There is no room for simplistic passwords either. Passwords should be complex. They should consist of a mix of letters, numbers, and symbols. It is also important to change these passwords regularly.
5. Use Multi-Factor Authentication
Multi-factor authentication
(MFA) requires users to provide two or more forms of identity verification before they can access an account. This might include a password, as well as a code sent to a mobile device. Even if a hacker steals a password, they still cannot log in without the second factor.
An HOA should set up MFA on all financial accounts, emails, and portals. This will help protect data against phishing and brute-force attacks.
6. Secure the Network
Associations must secure their networks to better guard against cyber risks in HOA systems. More specifically, wireless routers should come with encryption. Moreover, it is important to install strong firewalls.
For example, if the board uses a shared office, that network should have a unique and protected Wi-Fi password. It’s also a good idea to change this password every six months.
Board members and staff should avoid connecting to public Wi-Fi networks when conducting HOA business. This will help protect HOA data from potential attacks and breaches.
7. Perform Routine Backups
When it comes to HOA data security, routine backups are a must. Performing routine backups will help protect against data loss, especially during ransomware attacks. Even simple hardware failures or user errors can wipe data clean.
An HOA should store its backups off-site or in the cloud with strong encryption. This way, the HOA can protect its backup and quickly restore essential information in the event of an incident.
Manual backups are prone to human error and failure. For this reason, an HOA should set up automatic backups and test this system periodically.
8. Keep up With Software Updates
All computers, apps, and systems must have the latest software updates. This allows the HOA to install patches, which often fix known security vulnerabilities that hackers tend to exploit.
For example, outdated accounting software might have gaps that allow unauthorized people to access the system. By setting automatic updates, an HOA can ensure that it never misses an important patch.
9. Educate Board Members and Personnel
Believe it or not, human error remains the biggest cybersecurity risk. This is why it is essential to train board members, staff, and others who have access to HOA information. In doing so, the HOA can reduce the likelihood of members falling victim to phishing scams or mishandling sensitive data.
It’s a good idea to adopt a practical approach to training. Moreover, an HOA should schedule this training session every year. This way, board members and other stakeholders can learn to recognize suspicious emails, set up secure passwords, and ensure automatic backups.
10. Obtain Cybersecurity Insurance
Even if an HOA pulls out all the stops, no system is 100% secure. Fortunately, cyber insurance can help cover the financial damage stemming from cyber risks in HOA communities.
Policies often include coverage for data recovery, legal costs, notification requirements, and public relations efforts. An HOA should carefully review available policies to ensure the coverage matches its risk exposure.
Hiring an HOA Management Company
Many professional HOA management companies offer support for cybersecurity efforts. They often have protocols and security systems already in place.
Hiring a management company can relieve the board of day-to-day cybersecurity responsibilities. This includes protecting payment portals, ensuring routine backups, and maintaining secure communication systems. Management companies can also assist the board in reviewing cybersecurity policies annually and organizing risk assessments.
When interviewing management firms, boards should inquire about their cybersecurity practices, insurance coverage, and experience in handling cyber incidents.
Digital Safety for HOAs
Cybersecurity remains a chief concern for many homeowners associations. By employing the strategies above, boards can mitigate cyber risks in HOA communities.
Cedar Management Group offers technological services to HOA communities. Call us today at (877) 252-3327 or email us at help@mycmg.com to get started!
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