How To Secure Third-Party Data Sharing?

Date: 24 August 2023

The need for third-party data sharing has intensified past the point of no return. Collaborations, alliances, and partnerships are the new currency in the business ecosystem of today. Data, the lifeblood of modern enterprises, flows between organisations, opening up opportunities for value creation and strategic growth. But this interconnectedness also mandates robust data security.

Against this backdrop, data sharing can seem like a double-edged sword:

  •  On the one hand, it drives efficiency, innovation, and growth. 
  •  On the other hand, it exposes businesses to potential data breaches, putting sensitive information at risk. 

The conundrum businesses face is not whether to share data but how to do so securely

This article will delve into the complexities of third-party data sharing, explore the risks, and provide a roadmap for creating a secure data-sharing environment.

Understanding Third-Party Data Sharing Risks

Third-party data sharing entails companies sharing their data with external entities — a trend fueled by collaborative innovation. However, sharing data raises the security and compliance risk exposure for organisations with inadequate data access control levels, lack of data encryption during transit and storage, poor security configurations, insufficient monitoring, third-party application vulnerabilities, and weak password policies. 

The Equifax data breach of 2017 provides a stark example of the damage insecure third-party data sharing can wreak, with approximately 143 million people's sensitive information compromised due to a vulnerability in third-party software.

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Best Practices for Secure Data Sharing

Secure data sharing demands a blend of best practices. Let’s dive into the most important ones.

Secure Data Transfer Protocols

Secure data transfer protocols are fundamental for the safety and integrity of data which moves between entities. These protocols provide the means to safeguard information, mitigating the risks associated with third-party data sharing: 

  • Secure File Transfer Protocol (SFTP): SFTP operates as an extension of the Secure Shell protocol to provide secure file transfer capabilities. SFTP guarantees the confidentiality and integrity of data in transit, offering robust password and public key authentication mechanisms. 
  • Hypertext Transfer Protocol Secure (HTTPS): A step above the standard HTTP, HTTPS leverages SSL/TLS protocol to encrypt data transferred over the web, ensuring that sensitive information is not exposed during transmission. 
  • FTP Secure (FTPS): FTPS extends the original FTP protocol with additional security features using SSL/TLS layers, providing an extra layer of protection for data in transit. 
  • Internet Protocol Security (IPSec): IPSec protects data in transit by creating encrypted tunnels between devices, allowing secure communication over potentially unsecured networks. 

When choosing protocols, factor in the nature and sensitivity of the data, the requirements for speed and efficiency, and compatibility with existing systems.

Data Anonymisation Techniques

Data anonymisation refers to the process of obfuscating original data to protect sensitive information while maintaining its usability. Using these techniques effectively depends on the nature of the data, the necessity for protection, and the desired level of usability post-anonymisation. 

  • Data masking: This technique obscures certain data parts, rendering it unreadable. It's often used for sensitive data such as credit card or bank account numbers.
  • Pseudonymisation: It involves replacing identifying fields within a data record with artificial identifiers or pseudonyms.
  • Generalisation: This technique reduces the granularity of data, e.g. replacing exact ages with age ranges.
  • Shuffling: It involves rearranging the data values amongst similar data fields to preserve the overall distribution while detaching individual values from their original records.
  • Synthetic data generation: It involves creating a completely new, synthetic data set from the original data set that preserves its statistical properties but contains no confidential information.

Partner Due Diligence

Due diligence in data sharing involves an examination of potential partners' security frameworks, their adherence to data protection regulations, and the solidity of their vetting procedures for their own third parties. 

IBM's approach to partner due diligence serves as an excellent example of best practice. They undertake comprehensive evaluations of prospective partners, scrutinising their compliance with relevant standards, and assessing the depth and rigour of their own third-party assessment processes. 

This proactive approach ensures IBM only enters partnerships with companies that meet their high security standards, mitigating the risk of data breaches. The company also maintains a robust programme for continuous partner evaluation and updates its expectations based on the latest cybersecurity trends and threats.

If you are considering data sharing, planning with B2B data providers can help avoid the pitfall that can land you into data security problems. You also get access to a lot more data without worrying about compliance and, at the same time, get access to useful features to boost your lead generation efforts.

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Building Bridges of Trust: Balancing Security and Collaboration

Trust underpins successful third-party data sharing. It requires a careful balance between stringent security protocols and open collaboration. 

  1. Regular communication about security measures and improvements is vital. Sharing updates and progress builds confidence in the partnership.
  2. Transparency about data use, storage, and transfer is crucial. Partners should understand how their data is handled, stored, and protected.
  3. Proactive sharing of security audits and compliance reports provides an additional layer of assurance and demonstrates a commitment to security.
  4. Implementation of mutually beneficial security standards can align the partnership towards a common goal of data security.
  5. Quick and thorough incident response to cybersecurity events is critical to mitigating damage.
  6. Continuous education and training in data security helps to keep pace with emerging risks and security practices.

These strategies, apart from their individual benefits, help to establish a secure data-sharing ecosystem.

Case Study: Secure Third-Party Data Sharing in Practice

Cisco Systems is an excellent example of secure third-party data sharing. Using a combination of robust data transfer protocols, advanced data anonymisation techniques, and rigorous partner due diligence, Cisco has crafted a secure data-sharing practice that significantly minimises risk.

Their transparent communication — emphasising collaboration and joint responsibility for data security — is instrumental in fostering trust with their partners. They are proactive in sharing their audits and compliance reports, and implement mutually beneficial security standards.

Additionally, Cisco invests significantly in promoting security education amongst its partners. Their learning initiatives contribute to a more secure data-sharing ecosystem, reinforcing each partner's commitment to data security.

Their approach has yielded a highly secure data-sharing environment. The lessons gleaned from Cisco's practice can guide businesses seeking to bolster their third-party data-sharing security.

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Conclusion

The significance of secure third-party data sharing cannot be overstated, especially with the increasingly intricate web of connections we have today. Adopting and implementing best practices will help organisations navigate the potential minefield that is data sharing, building bridges of trust and collaboration instead of breaches of security. 

The importance of balancing security and collaboration has also become evident — it builds robust relationships with third-party partners. When businesses treat data security not as a hurdle but as a joint responsibility, they lay the foundation for a more secure, collaborative future. Following these guidelines will take your business into the new era of data sharing, making the most of the opportunities while safeguarding against the risks.

About the Author: Lisa Levy

Lisa

Lisa works as a content specialist at Satori, the Data Security Platform. She has published several books, white papers, and articles across a diverse collection of topics.

 

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