What Security Certifications Matter for Construction Loan Software?

Security certifications for construction loan software include ISO 27001 (information security management), SOC 2 (service organization controls), and GDPR compliance (data privacy). These certifications demonstrate that platforms follow strict security standards for data privacy, access controls, and ongoing risk management. Sekady prioritizes these certifications to provide lenders and contractors with secure project management environments.

Construction Loan Software Security: Why Certifications Matter

Construction lending involves sensitive information: borrower financial details, project budgets, payment information, personal guarantees, investor data. A security breach could expose confidential information affecting multiple parties.

Construction loan software must be extremely secure. That's why security certifications matter.

The Critical Security Threats to Construction Lending

Threat 1: Data Breach

• Hackers access borrower financial information
• Customer data is stolen
• Regulatory violations ensue
• Lender faces fines and liability
• Reputation damage

Threat 2: Fraud

• Unauthorized access to draw approvals
• Fraudulent draws executed
• Financial loss to lender
• Difficulty recovering funds

Threat 3: Unauthorized Access

• Someone with no business reason accesses information
• Competitive information leaks
• Privacy violation
• Trust eroded

Threat 4: System Failure

• Server goes down
• Data is lost
• Inability to process draws
• Project funding delayed

Threat 5: Compliance Violation

• Data not handled per regulations
• Regulatory fines
• Potential criminal liability
• Business disruption

These threats are real. They happen to businesses across industries. Construction lending is a target because of valuable financial data.

What Security Certifications Actually Mean

ISO 27001 Certification

What it is:

• International standard for information security management
• Covers policies, procedures, controls for information security
• Third-party audited certification
• Requires regular recertification

What it proves:

• Organization has documented information security program
• Controls are in place to prevent unauthorized access
• Employee training on security protocols
• Incident response procedures
• Continuous monitoring and improvement

Why it matters:

• Demonstrates organization is serious about security
• Shows commitment to best practices
• Third-party verification (not self-assessment)
• Ongoing compliance required

SOC 2 Certification

What it is:

• Service Organization Control (SOC) Framework
• Developed by AICPA (American Institute of Certified Public Accountants)
• Audited examination of controls
• Two types: SOC 2 Type I (point-in-time assessment) and Type II (ongoing over time)

What it proves:

• System controls are operating effectively
• Security, availability, processing integrity
• Confidentiality and privacy controls
• Independent audit verification

Why it matters:

• Customers can trust vendor's control environment
• Particularly important for financial services
• Type II is more rigorous than Type I (shows ongoing compliance)

GDPR Compliance

What it is:

• General Data Protection Regulation (European Union)
• Strict data privacy and protection rules
• Applies to any organization handling EU resident data
• Significant fines for violations

What it proves:

• Organization handles personal data responsibly
• Individuals have rights to their data (access, deletion, etc.)
• Data is protected with strong encryption
• Individuals are notified of breaches
• Privacy policies are clear

Why it matters:

• Protects personal information of borrowers and contractors
• If you work with international parties, GDPR may apply
• Heavy fines for violations ($20-40 million or 4% of revenue)
• Shows commitment to privacy

Additional Security Standards:

What Sekady's Security Certifications Show

Sekady prioritizes security certifications:

ISO 27001:

• Proven information security management program
• Documented policies and procedures
• Employee security training
• Continuous monitoring
• Annual third-party audit

SOC 2 Type II:

• Ongoing control effectiveness verified
• 12+ month audit period
• Tests of control operating effectiveness
• Recent report available for customers

GDPR Compliant:

• Personal data handled per EU regulations
• Strong data protection practices
• Privacy policies clearly documented
• Breach notification procedures in place

Result:

• Customers can trust Sekady with their sensitive data
• Compliance requirements are met
• Security is professional, not amateur

What to Look for in Construction Loan Software Security

When evaluating construction loan software, ask about:

1. Security Certifications

• "What security certifications do you have?"
• "How recent are they?"
• "Can you provide audit reports?"
• (Type II is better than Type I; recent is better than old)

2. Data Encryption

• "Is data encrypted at rest?"
• "Is data encrypted in transit?"
• "What encryption standards are used?"
• (AES-256 is strong; 128-bit AES is minimum)

3. Access Controls

• "How is access controlled?"
• "Are there role-based access controls?"
• "Can admins see what other users are doing?"
• (Granular access control is better than blanket access)

4. Backup and Disaster Recovery

• "Where is data backed up?"
• "How often?"
• "What's the recovery process if systems fail?"
• (Redundancy is important; regular backups are critical)

5. Incident Response

• "Do you have an incident response plan?"
• "How are security breaches handled?"
• "What's the notification timeline?"
• (Clear process is essential)

6. Vendor Security

• "Are your vendors secure?"
• "Are they audited?"
• "What security requirements do you impose?"
• (Supply chain security matters)

7. Compliance Support

• "Can you provide documentation for regulatory audits?"
• "Do you provide breach notifications if required?"
• "Can you accommodate specific compliance requirements?"
• (Vendor should support your compliance needs)

The Cost of Security Breaches

Security breaches are expensive:

Direct costs:

• Forensic investigation
• Notification to affected parties
• Credit monitoring services
• Potential fines
• Remediation of systems

Indirect costs:

• Reputational damage
• Customer loss
• Lost business opportunities
• Legal liability
• Regulatory scrutiny

Average data breach cost (2023): $4.45 million

Construction-specific risk: Borrower information, financial details, contractor data, investor information—all valuable to thieves and competitors.

Best Practices for Security in Construction Lending

1. Require vendor security certifications

• Don't accept "we're secure" without verification
• Require ISO 27001 and SOC 2 minimum
• Ask for audit reports

2. Implement strong access controls

• Limit access to only what employees need
• Use multi-factor authentication
• Regularly review access permissions
• Revoke access when employees leave

3. Encrypt sensitive data

• All data at rest should be encrypted
• All data in transit should be encrypted
• Encryption keys should be protected

4. Train employees on security

• Regular security awareness training
• Phishing simulation tests
• Security policies should be clear
• Discipline violations

5. Monitor for breaches

• Log all access to sensitive data
• Monitor for unusual activity
• Have incident response procedures
• Test procedures regularly

6. Comply with regulations

• Understand regulatory requirements (GDPR, CCPA, etc.)
• Implement required safeguards
• Document compliance
• Maintain audit trail

7. Review vendor security regularly

• Annual review of vendor certifications
• Review of new security threats
• Update security procedures accordingly
• Ask vendor about security updates

Red Flags: Insecure Construction Loan Software

Watch out for vendors who:

• Claim they're "secure" but have no certifications
• Can't explain their security practices
• Don't encrypt data
• Have had security breaches
• Don't have incident response plans
• Aren't transparent about their security
• Have very low pricing (often means cutting corners on security)

Conclusion: Security Certifications Are Non-Negotiable

Construction loan software handles sensitive financial and personal information. Certifications like ISO 27001, SOC 2, and GDPR compliance demonstrate that vendors take security seriously.

When choosing construction loan software, insist on security certifications. Your borrowers, contractors, and investors deserve to have their data protected.

Sekady's ISO 27001, SOC 2 Type II, and GDPR compliance show our commitment to security and data protection.

Ready to move to secure construction loan software? Learn more about Sekady's security certifications and practices by visiting our FAQ page or scheduling a demo.