May 22, 2024

Darren Riel

Future Focused

Ensuring Third-Party Security In Your Business Operations

Introduction

Businesses are increasingly dependent on third-party suppliers for critical components and services. Third parties employ vendors, contractors and sub-contractors to perform tasks that may not be part of their core business. These third parties can include everything from your cleaning service to the company that handles your payroll to the software vendor you use for accounting purposes. All of these organizations have access to sensitive information about your company and its employees, but many organizations fail to adequately assess this risk before engaging in any relationship with a new third party provider. Businesses need to evaluate both internal and external risks associated with each type of interaction they have with a third party provider in order to effectively manage their exposure to potential security breaches.

What Is Third-Party Security?

Third-party security is the security of a business’s assets, data and network from third parties. Third parties are companies or individuals that provide goods or services to the business. Examples include vendors, suppliers, contractors, consultants and even employees who have access to sensitive information inside your organization.

It’s important for organizations to understand their risk exposure when it comes to third-party security because many cyberattacks start with compromised credentials from outside entities. This can lead directly into an attack on your company’s infrastructure if you don’t take steps now to protect yourself against these threats by implementing an effective third party risk management program in place at all times!

Why Should You Care About Third-Party Security?

You are responsible for your third parties. You can’t control what they do, or what they don’t do. If you hire an IT contractor to set up a new security system for your company, but he doesn’t follow through with the installation, then there’s nothing that can be done about it. You hired him and paid him–he has fulfilled his obligations as far as his contract goes. But what about when he leaves behind an open door for hackers? Are you still liable?

The answer is yes! Even though this third party isn’t directly employed by your business (and therefore not covered under any kind of employment contract), they’re still working on behalf of your company when providing services like installing new software or upgrading existing systems. That means if anything happens while performing these tasks–like leaving doors open without notice–then both parties are responsible for those damages incurred by hacking into unprotected networks or databases containing sensitive information such as credit card numbers or social security numbers (SSNs).

Evaluating the Impact of Third Parties on Your Business Operations

Evaluating the impact of third parties on your business operations is a crucial step in ensuring that you can continue to run your company without interruption. The first step is understanding what type of risks are associated with third-party security breaches and how they can affect the day-to-day operations of your business.

There are several types of third-party security risks:

  • Data exposure – This refers to any kind of information that has been shared with an outside party, such as customer data or employee records. An example would be if a company hires contractors who have access to its systems but do not have the same level of security clearance as full-time employees (e.g., janitors). These individuals may accidentally leave sensitive information unencrypted or stored on their computers while cleaning up after hours; this would put all kinds of sensitive data at risk if someone were able to access those devices later on down the line!

The Different Types of Third-Party Security Risks

There are three main types of third-party security risks:

  • Physical. These include theft, fraud, sabotage and other threats to property.
  • Technical. Cyberattacks, malware and ransomware are all examples of technical threats that can affect your business through a third party’s systems or devices.
  • Operational. Poor management of third parties is an operational risk because it can lead to poor service quality or legal issues within your company due to employee misconduct or negligence by outsourcing partners who don’t follow strict standards in their operations

Reducing the Risks of Third-Party Security Breaches

Reducing the Risks of Third-Party Security Breaches

Working with third-party vendors is a great way to streamline your operations and save money, but it also increases your risk exposure. When you’re working with outside providers, it’s important that you establish security policies and procedures that protect both parties from data breaches and other cyberattacks. Here are some steps you can take:

  • Work with third-party vendors to establish security policies. These should include things like password management, encryption of stored data (including backups), strong authentication methods like two-factor authentication or biometrics where possible, access control mechanisms like multi-factor authentication (MFA), vulnerability scanning/testing and patching processes for software updates on servers/workstations etc., incident response plans for all employees including those who work remotely but have access privileges over critical systems such as HRIS etc., regular audits conducted by both parties at least once every three months so everyone knows what everyone else is doing in terms of compliance requirements etc.. You may also want to consider using managed security services from companies like Cloud Sherpas which offer various levels of service depending on how much help you need managing these risks internally versus outsourcing them completely (which would require hiring an independent contractor). They also provide ongoing training sessions so employees stay up-to-date on best practices related specifically around third party risk management strategies.”

You can take steps to minimize the risks posed by third-party security breaches.

  • Understand the risks.
  • Understand the impact of a breach.
  • Have a plan for responding to a breach.
  • Have a plan for preventing breaches.
  • Have a plan for mitigating damage from a breach.

Conclusion

As you can see, third-party security breaches are a serious threat to your business operations. They can disrupt your ability to operate smoothly and even put your employees at risk of identity theft or financial fraud. Fortunately, there are steps you can take to minimize these risks by evaluating the impact of third parties on your business and reducing the likelihood of such breaches occurring in the first place.