How to Limit Data Security Breaches with Vendors

You may be doing everything you can to protect your customers’ data, but are your vendors just as diligent? If a security breach at one of your vendors includes theft or leakage of your data, you may be liable. How can you protect your data while it’s physically and metaphorically out of your hands? Here are some important steps to take.

Choose Secure Partners

The first step to protecting yourself is to make sure you’re working with companies that take security seriously. It’s not unusual these days to require an external security audit of any firm that handles your data or to make security provisions an important part of the initial vetting process. Look for vendors who can communicate intelligently about data security and who can vouch for the security of their storage and transmission systems.

Check Your Contracts

IT service provider contracts spell out how much liability each party accepts for data breaches, and the standard has evolved over time. Originally, the vendors typically accepted full responsibility for any data breaches that occurred on their watch. But as fines have become steeper and data breaches more common, those contracts have changed dramatically. It’s not unusual now to see contracts that cap the provider responsibility at a figure equal to just two or three months’ fees. It’s important to know what your potential losses are in case of a breach and stand firm when negotiating those contracts.

Collaborate Closely

The clearest path to solid security is to work together with your primary vendors to protect data. When data has to pass through a number of different systems and software, the odds of a breach increase dramatically. Working together with IT experts and advisers to mutually integrate solutions, encryption schemes, and communication methods is the best way to keep data safe.

Limit Vendor Access

Make sure you’re only sharing the data each vendor needs, rather than your entire database. That way you’re not putting all your information at risk unnecessarily. Put systems in place that strip your records down to the essential data for each vendor before you share your files.

Share Information Securely

Examine closely the methods you’re using to communicate with vendors. Make sure you’re using the most secure software possible and also following the best strategies for using those communication platforms securely. Keep this standard in mind not only when transmitting large amounts of data, but also when communicating over email or messaging systems about individual customers.

Cross-Train Staff

Do you prepare security training for your staff? If you’re teaching them how to discern whether an email might be a phishing scheme or grilling them on which customer data is considered privileged, you might want to offer those training materials at no charge to your vendors, or invite them to sit in on a security teleconference.

Keeping data safe while you’re sharing it with third-party vendors is a security hurdle that is inherent in our current data economy. Make it a priority to minimize your risk in order to protect your customers and your business.


  1. Choose Secure Partners – How to get into a solution that this particular partner is safe for protecting our data?