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October 2023 ยป thefivestar.com 43 October 2023 F E A T U R E S T O R Y Evaluating Risk #1: Physical Security Concerns T op-tier offshoring companies have their offices in software technology parks, special economic zones, or special- ly designated information technology (IT) cities. Access to such locations is restrict- ed and includes multiple layers of secu- rity, including physical security posted at entry/exit, restricted badge access, and mandatory identification/access cards. Only authorized personnel are allowed to access buildings and premises. In addition, offshoring companies offer additional access restrictions for client-specific needs, such as white rooms or Offshore Development Centers (ODCs). Background verifications are an important part of the offshoring process, and verifications include identification, education, address, and criminal checks. This helps to ensure that outsourcing pro- viders are hiring and aligning only those resources who have a clear background verification check. Evaluating Risk #2: Digital Security Concerns P rominent offshoring companies have also implemented information securi- ty management systems that ensure they are in compliance with international pri- vacy laws, including FTC, HIPAA, GLBA, FCRA, CPRA (in the U.S.), and GDPR and IT Act 2000 (in Europe and India). Data privacy is paramount, with pro- cesses implemented to ensure the data is neither stored locally nor transferred out of client environments. To protect data, outsourcers have controls in place for physical equipment, system access for personnel, and data movement. They also require annual privacy training, and com- puters can only be accessed by authorized personnel. Many organizations have implement- ed data loss prevention, which does not allow data to be moved, and triggers an alarm if there is an attempt to move said data. In some cases, personnel are not even allowed to carry their phones into restrict- ed areas to avoid any potential breaches. To ensure that their systems are safe from potential external attacks, offshor- ing companies have implemented the lat- est antivirus and cybersecurity controls. That includes all personnel routinely completing training on information secu- rity, such as modules on phishing attacks, management of data, classification of data, social engineering breaches, cyber- attacks, phone/voice phishing, and frauds conducted using artificial intelligence such as deepfake scams. Not to mention, if required by an originator client, offshoring companies can participate in audits conducted by external auditors who visit, review, and validate the offshoring company's oper- ations and their adherence to client and regulatory requirements. Evaluating Risk #3: Business Continuity M ost offshoring companies have business continuity processes built into their organizations which allow them to restore critical functions and rapidly return to "business as usual" opera- tions in the case of a disruption. Having multiple sites across geographies helps offshoring companies spread operational risks, an option not always available to the originator. These business continuity plans help save lives in case of a disaster and main- tain a seamless experience for the end customer. All employees and processes normally go through an annual business continuity test to validate existing plans and make improvements as necessary. The benefits of partnering with an experienced outsourcing provider can improve a client's bottom line while maintaining a positive customer expe- rience. In the current mortgage sector environment, which we expect to contin- ue for the next several quarters, a strong offshore presence can help offset lower production volume with lower costs while building scalability to get ready for the next cycle. Risks cannot be complete- ly removed, but an experienced BPO can reduce the risk through their experience and knowledge. In the current mortgage sector environment, which we expect to continue for the next several quarters, a strong offshore presence can help offset lower production volume with lower costs while building scalability to get ready for the next cycle.