10 Tips for Protecting Your Data When You’ve Outsourced It to a Third Party

With rapid progress in technology and increased utilization of the cloud platform, you would expect to have reliable security for your data when you outsource it to third-party vendors. Outsourcing has gained tremendous favor among small to medium-sized businesses. But how safe is it indeed?

The Identity Theft Resource Center released a report that revealed that a total of 1039 data breaches occurred in 2016 and the number increased to 1120 in 2017. In that time more than 200 million records were exposed. These numbers are quite frightening because as time goes on, more people will look to outsource their work as it is more beneficial for small businesses.

So, with all that these statistics reveal and the fact that people will keep outsourcing works, the risks concerning security can no longer go unanalyzed. Especially since ITRC announced that the number of data breaches and record exposed occurred highest in two categories:

  • Business
  • Finance/ Bank

But even without all these hacks and thefts, there are other ways your data is at risk. The Banking industry in the USA took a severe hit in October 2012 when Hurricane Sandy hit the northeast part of the country. The storm that the hurricane brought flooded Jack Henry & Associates, which is an S&P 400 company, which supported more than 11,000 financial institutions with core processing services. Since Jack Henry never prepared for this kind of situation, the consequences were very harsh and many suffered all over the country. Banks who used its processing services suffered long delays processing checks and deposits, while many customers could not even access their funds.

Source: https://www.thebalance.com/hurricane-sandy-damage-facts-3305501

So, the threat that each business face when one outsources genuine and must be seen. Now how that can do is the question that needs to answer. Let us go through 10 tips that would show how to reduce risks to a bare minimum.

To be honest, no all business fall victim to cyber crimes but then again, you never know that you are entirely off the grid from hacks. So, instead of investing little on security, hire an expert who can assess the risks and take protective measures against security incidents which would otherwise prove to be very costly for you later on.

There are many out there who fall to such crimes first, then learn to amend such mistakes by strengthening security, is it not better to spend on security from the get-go?

2. Carefully construct the Outsourcing agreement

Formal agreements can take you a long way in the business world, so it is crucial that you deliberately create every line in a contract and that you specify what you want out of your negotiations. So, you must determine security concerns about data breaches and data leaks which you might be surprised to hear that it is often overlooked.

When you outsource work to someone, it falls on their shoulder to keep the data safe. In fact, you will find many data centers that will specify that they would not accept any responsibility for their client’s data outside their care. It is best to avoid these kinds of data centers and pick one with the best one even though it may be a little more expensive.

An excellent data center will not view your security concerns in the agreement form as the bare minimum; they should have the security measures that they apply to keep data safe and confidential.

3. Do not give full access to your data

When a project is big enough, third-party providers do not need full access to your data all the time. So, it is better to be safe and limit data access to only the parts that are necessary at a time. What this will do is reduce the number of people accessing your data and there limit the risk of it being hacked or leaked.

Privacy is also an important factor here; you have to specify to your vendor that you want them to keep your data isolated from all the other clients that they have so that your data is safe and other customers that they have do not mistakenly have access to your data.

4. Share security concerns with your employees

Most people do not see security as a concern unless they are a victim of it. In case of employees, they can be the quickest way to a data breach. Why so?

Most employees are not acutely aware of cyber crimes, and their security practices are somewhat lacking, making your data vulnerable to hacks. They unknowingly risk data all the time. Employees caused the majority of the data breaches that have reported.

A data breach can occur in many ways, a general approach to a data breach is to naively click on ads on the internet or a visible scam email. Sending a sensitive email unencrypted, saving raw data on an open computer or a flash drive can also lead to a data breach. These are many small ways that put security at risk, and if employees are made aware of such things, then the number of security failures will decrease significantly in a year.

5. Hire a lawyer

One of the most important things to remember is to specify the ownership of data when you outsource it to a third-party vendor. So, it is crucial to hire legal advice on such matters, on most of the world, your data belongs to you, no matter where you store it.

But in case this is not true because there are parts of the world where data transfer to another place would transfer ownership, you have to specify that this does not happen. A quick sitting with a legal counsel will put property firmly over to you, and you can sleep happily at night.

6. Ask for a physical security overview

Your data is not only at risk on the internet, but there have also been many cases of data breaches the old tangible way. So, thoroughly check your vendor’s security measures they apply on a physical level. The best ways to do this is through locked doors and alert employees.

If your data is not on the computer, then ask your vendors that your files be stored in places that are locked and therefore not accessible to everyone. Keeping them behind locked doors or a locked file cabinet is the way to go.

Ask them who could access these files and limit the number of their employees that actually could. Lack of awareness would cause employees to accidentally leave confidential records open on a desk while they get a coffee or a break. Your data should always be in a locked file cabinet unless the files are being worked upon. Making employees aware that they should still close doors, cabinets, log off computers at the end of the data would minimize the security risks significantly.

7. DO NOT turn off Firewalls

There are various reasons that you could have to turn off firewalls on your personal computers; most gaming pc's do require you to turn off firewalls to properly run a game. But your computer and work computer should be different, and firewalls should be turned on.

A firewall will prevent access to small-time hackers when you are connected to a network, especially an internet. A well-programmed firewall will deter pirates from locating your computer and therefore getting into your files. If possible, buy additional firewall programs apart from the ones already in the operating system that you use.

You should check your daily access controls regularly since a firewall is only as active as its access controls. So, set access controls to only those who required for the job.

If only one or two computers on a network are used to store sensitive information, then consider putting many layers of security to protect them.

8. Limit laptop and wireless device uses

Laptops and other wireless devices like smartphones and tablets is another quick way to a data breach, since they are very portable and not that secure, especially since they are not locked to a desk.

You should restrict the number of people that have access to these devices, if someone does not need to use that device specifically for work, then limiting them to laptops or phones that do not contain sensitive data.

If you do need a laptop for work, then consider fixing to a place where it is not portable, so locking it to a desk is an excellent way to increase security. If only one person uses the laptop in question, then ask your vendor to close the door when they are not in the room. A computer which uses biometric security is more secure than one with a password.

But even after all security measures, laptops stay portable at the end of the day. So, consider installing an auto destroy function that would destroy all sensitive information if the computer in question is stolen.

If wireless devices like smartphones are authenticated to connect to your network, then limit the users who actually can have access to the system. Limiting the number of users who can access the web is an excellent way to reduce risk. Say that you restrict access to the number of wireless users to only 2 or 3. Then it will be almost impossible for a 4th person to enter the network.

Using a WPA2 security capable device is better than any other routers out there.

9. Use software to detect possible breaches

Use paid data breach detection software to protect your computer against potential hackers. Open source software is not recommended as paid software is regularly updated to the latest firmware, and therefore, your computer will be safe with the most recent tricks out there.

Using logs is an excellent way to keep track of who has been on your computer. You can use a back door to which only trusted persons can have access to and so that hackers cannot delete the logs of his intrusion. So, in case of an attack, your record will provide you with all the information you need about the attacker.

Keep tracking computers that have multiple login attempts, if possible, in such cases; it is better to just temporary lock these computers until security measures have been taken to prevent intrusion from unwanted visitors.

Always ask for verification from a trusted party when a large volume of data is being transferred from one computer to another. Unexpected large data transfers will tell you that your information is being breached.

10. Be vigilant when picking vendors

Carefully picking a vendor is a must, especially when outsourcing to an offshore company. All security policies look great on a contract, but if they do not implement all security measures then papers mean nothing, so make sure your vendor enforce the security measures to the fullest extent.

Consider the case of a limited number of users that are allowed to use a network. All these security measures would mean nothing if, by chance, someone does enter the system and transfer all the data that is sensitive. So, preventive data transfer is mandatory for all vendors and pin code, or biometric authorization is the way to go.

All these measures will not be taken by all the vendors out there who are willing to take what you outsource; only the best will.

It is better to be vigilant than to be a victim of cyber crime, as the one data breach could see you losing a lot of money. An outsourced team can do so much more for you than a typical group of employees. Sure there are risks, but there are also these preventive measures that can be taken to reduce the risk to a great extent, and the benefits of outsourcing highly outweigh these risks.