With partnerships and collaborations now being the prime currency of the modern business landscape, the necessity for third-party data sharing is greater than ever. As the key asset that underpins enterprises today, data opens up many opportunities for strategic growth and value creation when shared between organisations. However, given the sensitive nature of this interconnectedness, it naturally warrants robust security, as data sharing can also become a double-edged sword.

In other words, while it can drive innovation and efficiency, it can also potentially cause unwanted data breaches and put sensitive information at risk. Thus, many businesses face the conundrum of performing their data-sharing initiatives in the most secure manner possible. Read on as we delve into the challenges involved in third-party data sharing and share tips on better securing your data-sharing environment.

Understanding third-party data sharing and the risks involved

Third-party data sharing occurs when an organisation agrees to share their corporate data with external entities, a rising trend that stems from the pursuit of greater collaborative innovation. However, as mentioned, organisations must first assess whether this venture is worth the increase in security and compliance risk exposure. Entering such a sharing scheme with poor data access control levels, insufficient data encryption protocols during storage and transit, third-party application vulnerabilities, and many other shortcomings will only spell disaster.

The 2017 Equifax data breach is one of the more prominent examples of when third-party data sharing goes wrong, as the incident compromised the sensitive information of approximately 143 million people due to a third-party software vulnerability.

Best practices to secure data-sharing environments

Sharing data with third parties as securely as possible demands a combination of best practices, the most important ones being:

1. Use secure data transfer protocols

Secure data transfer protocols are key to maintaining data integrity and security when sharing data with other third-party entities since they help mitigate the many risks of sending data over a network. The most well-known protocols used today include:

● Hypertext Transfer Protocol Secure (HTTPS) – an improved version of the standard as it leverages the Secure Sockets Layer (SSL) encryption and its more modern replacement, TLS (Transport Layer Security), to encrypt data that travels over the web and prevent it from being compromised.

● Internet Protocol Security (IPSec) – creates encrypted tunnels between devices that protect data in transit, enabling secure communications over potentially unsecured networks.

● FTP Secure (FTPS) – an extension of the original File Transfer Protocol (FTP) offering improved security features via SSL/TLS that provide data with an additional layer of protection during transit.

When choosing between protocols, consider the sensitivity and nature of the data you will be sharing, speed and efficiency requirements, and compatibility with your existing systems.

2. Implement data anonymization techniques

Data anonymisation is a process that obfuscates the original data while still retaining its usability. Effectively using these techniques largely depends on the data you are working with, the need for robust protection, and the required level of usability post-anonymisation. There are many ways to anonymise data, such as by data masking, generalisation, and pseudonymisation, to name a few.

Data masking obscures some parts of the data to make it unreadable. This is commonly used for sensitive information like bank accounts and credit card numbers. Meanwhile, generalisation works in a similar vein but more so by reducing the granularity of data or making it less specific, such as using age ranges instead of exact age. Lastly, pseudonymisation replaces identifying fields in a data record with pseudonyms or artificial identifiers.

3. Ensure due diligence with third-party partners

Partner due diligence means assessing the data security and cybersecurity posture of potential partners. This includes examining their security frameworks, compliance with data protection regulations, and their own vetting procedures for the third parties they work with.

IBM and their proactive approach to partner due diligence is a great example that other organisations can learn from. They fully assess the depth and rigour of their prospective partners' third-party assessment procedures and scrutinise their compliance with relevant standards. Such thoroughness ensures that they only partner with organisations that meet their high-security standards to virtually eliminate the risk of data breaches.

Conclusion

As the web of business connections becomes increasingly intricate by the day, so does the need to improve the security of third-party data sharing. By following the best practices surrounding data sharing as well as utilising must-have security measures, organisations can better mitigate the potential risks and make the most of its advantages.

Thus, to make the most of third-party sharing while steering clear of the risks, consider working with GROUP8 today to fully secure your data-sharing environment and bolster your overall cybersecurity posture. By leveraging our renowned offensive-inspired solutions – like vulnerability assessment and penetration testing services – that cover the entire cybersecurity ecosystem, you can rest assured that all your bases are covered and that you are always a step ahead of the opposition. For more information about our Singapore cybersecurity services, don't hesitate to contact us at hello@group8.co to learn more.