How To Secure Third-Party Data Sharing

Data sharing with third parties is becoming very necessary. In today’s corporate ecosystem, partnerships, alliances, and collaborations are the new money. Data, the lifeblood of modern businesses, travels between organizations, creating chances for value generation and strategic growth. However, increasing interconnection necessitates strong data security.

In light of this, data sharing may appear to have two sides:

• On the one hand, it promotes productivity, growth, and innovation.
• However, it exposes firms to potential data breaches, endangering critical data.

This blog will examine the hazards associated with third-party data sharing, as well as the challenges, and offer a road map for setting up a safe data-sharing environment.

Understanding Third-Party Data Sharing Risks

Companies exchanging their data with outside parties is known as third-party data sharing, and this trend is being supported by cooperative innovation. Sharing data, however, exposes organisations with insufficient data access control levels, a lack of data encryption during transit and storage, poor security configurations, inadequate monitoring, third-party application vulnerabilities, and lax password policies to increased security and compliance risk exposure.

A clear illustration of the harm that unsecured third-party data sharing can do is the 2017 Equifax data breach, in which 143 million people’s personal information was exposed as a result of a flaw in third-party software.

Best Practice for Secure Data Sharing

Combining best practices is necessary for secure data sharing. Start with the most important ones.

1. Secure Data Transfer Protocol

The integrity and safety of data that is transferred between entities depend on secure data transfer protocols. These methods offer the means to protect data, reducing the risks connected with third-party data sharing:

• Secure File Transfer Protocol (SFTP): SFTP functions as a Secure Shell protocol extension to offer secure file transfer features. SFTP provides strong password and public key authentication procedures, ensuring the security and integrity of data while it is in transit.
• Hypertext Transfer Protocol Secure (HTTPS): A step above plain HTTP, HTTPS uses the SSL/TLS protocol to encrypt data sent over the internet, making sure that sensitive material is not revealed while being transmitted.
• FTP Secure (FTPS): FTPS adds further security features to the basic FTP protocol utilising SSL/TLS layers, giving data in transit an extra layer of security.
• Internet Protocol Security (IPSec): By establishing encrypted tunnels between devices, IPSec safeguards data as it is being transferred, enabling secure communication over potentially insecure networks.

2. Data anonymisation Technique

Data anonymisation is the technique of obscuring original data while preserving usability in order to secure sensitive information. Effective application of these strategies depends on the type of data, the need for security, and the intended level of usage after anonymisation.

• Data masking: This tactic hides specific data components, making them illegible. Sensitive information like credit card or bank account details is frequently stored in it.
• Pseudonymization: This process involves using made-up names or pseudonyms in place of identifying fields in a data record.
• Generalisation: This method reduces the level of detail in the data, for example, by substituting age ranges for precise ages. In order to maintain the general distribution while separating individual values from their original records, shuffling entails rearranging the data values among related data fields.
• Synthetic data production: It entails taking the original data set and producing a brand-new, synthetic data set that has all of the original data set’s statistical features but excludes any private information.

3. Partner Due Diligence

When sharing data, it is important to exercise due diligence by evaluating the security frameworks, compliance with data protection laws, and reliability of third-party screening processes of potential partners.

The way IBM handles partner due diligence is a wonderful example of best practice. They conduct thorough assessments of potential partners, checking to see if they adhere to relevant standards and gauging the breadth and rigour of their own third-party assessment processes.

This proactive strategy guarantees IBM only forms alliances with businesses that adhere to their strict security requirements, reducing the chance of data breaches. The business also keeps a strong plan for ongoing partner evaluation and adjusts its expectations in line with the most recent developments in cybersecurity trends and threats.

Conclusion

It is impossible to overestimate the importance of safe data exchange with third parties, especially given the complex modern network of relationships. The adoption and application of best practises can assist firms in navigating the potential minefield that is data sharing, creating avenues for collaboration and trust rather than opening the door for security breaches.

It has also become clear how crucial it is to strike a balance between security and cooperation because doing so fosters strong connections with outside partners. Businesses can create a more secure, cooperative future by approaching data security as a shared duty rather than a barrier. By following these recommendations, your company will enter the new era of data sharing, maximising the opportunities while mitigating the hazards.