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Business Protection: How To Protect Your Company When Working With Third-Party Vendors

July 17, 2017
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Business Protection: How To Protect Your Company When Working With Third-Party Vendors

For many businesses, working with third-party vendors is a critical part of their operations. The partnership allows them to access certain services, reach a larger segment of the target market, and focus on other activities the company. However, third-party vendors impact the security of an organization to a great extent. While some of these partners have security systems in place for data protection, others don’t, and partnering with them can expose your firm to security and data breaches.

Most firms that partner with third parties report breach through the same partners. For this reason, there’s a need to evaluate any potential vendors before entering into contractual agreements with them and sharing private business and client information. Read on for actionable insight into some of the measures you can take to protect your company when working with third parties.

Set up Internal Security Systems

The most efficient way of protecting your enterprise from breaches when dealing with third parties is starting with internal systems. Start by setting up internal safeguards and multilayered defense systems that cover every network and system within the organization including computers, laptops, and business phones. These security systems should include two- or three-step authentication prompts for all requests made by third parties for data access.

Set up internal data access right, limitations, and policies that should be followed by employees. This is because employees can also play a role in breaching security systems and exposing sensitive information to hackers. For the security systems to be effective, your IT team should conduct timely software updates and installation of anti-spyware programs in all your computers.

Carry Out Third-Party Vendor Assessment

Companies partner deal with tens if not hundreds of vendors such as phone providers, data encrypters, data backup companies, IT professionals, data destruction companies, coders and code reviewers, and data center professionals. The information, systems, and networks accessed by these vendors can easily be leaked if the parties don’t have the best practices in place. Before partnering with any of them, a business should undertake a third-party assessment to ensure that sensitive information will be safe in their hands.

It is a wise idea to contract third-party assessment services to a company with the right resources and technical know-how. These companies conduct due diligence on vendors based on whether they are low, medium, and high risk so as to determine which ones are suitable for partnerships. Also, they provide vendor credentialing services. These services involve assessing and managing vendor risk, collecting certificates, and ensuring compliance with insurance terms and agreements.

Create Service Level Agreements

Setting up internal security systems and evaluating third party vendors can only help so much in mitigating data and network breaches in your business. However, if third party vendors don’t have any obligation to protect your information, they can be reckless with it. Creating a service level agreement (SLA) with all your vendors can be an effective way of guaranteeing their accountability. These agreements ensure that these third parties comply with your company’s policies regarding information privacy, data and network access, and threat and risk analysis.

Your SLAs should also have a clause that allows your business or a contracted company to carry out regular audits and monitoring on the vendor’s compliance with your security policies. This way the company can identify vulnerabilities and determine whether to manage inherent risks or do away with the supplier. Additionally, the third parties should be tasked with the responsibility of reporting any breaches to your business for analysis and damage control.

You have to be hyper-vigilant when dealing with any parties that could impact the security of your data. Take these steps to protect the business data and customer information from access by scammers and cyber criminals through vulnerable third-party security systems. Avoid contractual agreements with high-risk vendors that expose your enterprise to security breaches.