Proven Tips to Secure Third-Party Data Sharing

Third-party vendors are five times more likely to have poor security. 98% of organizations have at least one vendor that has become a victim of data breach in the last two years.

What do these cyber challenges demand? A consistent data-centric approach. Let’s discuss some proven tips to secure third-party data sharing for long-term strategic sustenance.

What Do You Mean by Third-Party Data Sharing?

Third-party data sharing is a practice of sharing your data with external entities or organizations that are not directly affiliated with the primary data holder.

This data transfer can be in different formats. The purpose of this transfer might be analysis, processing, or collaboration. 

In the process, many risks compromise your individual and organizational security.

The Rise in Third-Party Data Sharing in Recent Years

The practice of third-party data sharing has seen a tremendous upsurge in recent years. Businesses increasingly rely on external partners, vendors, and service providers to analyze and process data. 

Ransomware accounted for 27% of third-party breaches in 2022.

Whether it’s for enhancing marketing strategies, improving customer experiences, or making informed decisions, data sharing has become integral to modern operations. 

While this collaboration can yield significant benefits, it also brings new challenges related to data security, transparency, and accountability.

Data Privacy Concerns and Legal Regulations

With the rise in data sharing, concerns over data privacy have heightened. Individuals and customers are becoming more conscious of how their personal information is used and shared. 

Simultaneously, governments and regulatory bodies enact stringent data protection laws, such as GDPR and CCPA, to ensure that personal data is handled responsibly. 

This necessitates organizations to implement robust data privacy measures, including precise consent mechanisms and data encryption, to abide by the legal requirements and gain the trust of their stakeholders.

7 Proven Tips to Secure Your Data 

Your data is an asset. It is your responsibility to ensure that it is appropriately handled. Let’s discuss some proactive methods to secure your data.

1. Classify the Data and Assess the Risk

The foundation of a robust data protection strategy lies in the meticulous identification of data categories. You must distinguish between different types of data, such as personal information, financial data, intellectual property, and operational records. 

By categorizing data, organizations gain clarity on what they’re dealing with, making it easier to implement appropriate security measures.

Is Data Sensitive?

It is essential to assess the sensitivity of the data within each category. This evaluation considers factors like the potential impact of data exposure and the likelihood of such an event. 

For instance, personal medical records are susceptible, while public marketing materials may have a lower sensitivity. This assessment guides decisions regarding the protection and access controls needed for each data type.

The healthcare industry accounted for 34.9% of incidents of third-party breaches in 2022.

Keep Your Checks

Organizations need to be strict in risk assessments. These assessments involve identifying potential vulnerabilities in data-sharing processes, evaluating the security practices of third-party recipients, and considering the overall impact of data breaches or mishandling. 

It’s essential to weigh the benefits of data sharing against the associated risks and implement mitigating measures, such as robust contracts, encryption, and continuous monitoring, to ensure data security. 

• Design a Data Framework

The foundation of any effective data-sharing strategy is formulating comprehensive data-sharing policies and procedures. 

These documents outline how data is shared, who is responsible, and the steps to ensure its security. They serve as a roadmap for employees and collaborators, offering clear guidelines on ethical and secure data handling. 

Well-structured policies and procedures are essential for consistency and accountability in data-sharing practices.

Access Control

Access controls are a crucial part of data-sharing policies. They determine who can access specific data, how they can access it, and under what circumstances. 

By implementing access controls, organizations can limit data exposure to authorized personnel and protect against unauthorized access. 

Aligning Your Framework with Regulations

Data-sharing policies must align with regulatory frameworks like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). 

• Be Sure About Your Third-Parties

When considering third-party partnerships, it’s essential to establish clear vendor evaluation criteria. 

These criteria should encompass various aspects, including the vendor’s reputation, track record, financial stability, and industry standing. 

Equally important are the vendor’s technical capabilities, compliance with data security standards, and aligning their services with your organization’s needs. 

By establishing these criteria, organizations can filter potential partners effectively and focus on those that align with their goals and values.

Reviews and Past Experiences

A thorough investigation into the background and operations of the potential partner is essential. This examination should encompass the vendor’s legal and financial standing, references from past clients, and a review of their corporate culture. 

Security Assessment

Vendor security assessments are a fundamental aspect of ensuring data safety when partnering with third parties. These assessments evaluate the vendor’s security practices, including data protection measures, incident response plans, and cybersecurity infrastructure. 

You must ascertain industry-standard security protocols while sharing data with vendors.

• Security In-Transit and Storage

When data is in transit, traveling from one point to another, it’s vulnerable to interception and tampering. This is where encryption protocols come into play. 

These protocols encode the data in a way that makes it unreadable to unauthorized parties during transmission. 

Secure Sockets Layer (SSL), Transport Layer Security (TLS), and IPSec are widely used encryption protocols that establish secure connections over the internet, safeguarding data as it moves between servers and clients. 

This encryption ascertains that if intruders intercept the data, they can’t decipher its contents without the encryption keys. It is also crucial to know what is your IP address to keep the protocols in line for the future.

• Look for Authentication and Control

Access control and authentication are vital in safeguarding sensitive information and ensuring only authorized individuals can access data and systems.

Role-Based Access Control (RBAC)

Assigning specific roles to employees within an organization, granting them access to particular resources and functions based on their job responsibilities only. It reduces the risk of unauthorized users in areas where they are not needed.

Multi-Factor Authentication (MFA)

MFA can include something you are, such as a fingerprint or facial recognition. By requiring multiple forms of verification, MFA significantly enhances security, making it highly challenging for anyone other than the rightful user to gain access.

Make sure that your vendors have these controls so that not everybody can access your data saved with them.

• Monitor and Audit Continuously

The ongoing scrutiny allows immediate detection of unusual activities, such as unauthorized access or suspicious behavior. It’s a proactive approach to data security, providing organizations the means to respond swiftly to potential threats.

When it comes to data safety with vendors, design teams work together with vendors for the audits. 

Work with audit trails and data logging for better safety procedures. Look for security practices such as intrusion detection in your third-party partners for better intimation of any breaches.

• Work for Data Minimization and Anonymity

By reducing the amount of data you hold, you limit the exposure of sensitive information, which limits unauthorized access.

This practice not only enhances security but also simplifies data management, reducing the risk of data breaches and privacy violations.

Anonymizing data is like giving your data a disguise. This technique removes or alters personally identifiable information from datasets, making it impossible to trace data back to individuals.

Golden Rule of Law: Your Data, Your Responsibility!

We are always at risk of breach, no matter how prepared we are! The idea is to manage your risk and the cost of being exposed to a breach. Third parties are just the handlers of your data; give yourself control to remove all access in case of any breach.