How to Secure Third-Party Data Sharing | Best Practices & Risks

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How To Secure Third-Party Data Sharing
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• Data sharing with third parties is becoming very
  necessary. In todays corporate ecosystem,
  partnerships, alliances, and collaborations are
  the new money. Data, the lifeblood of modern
  businesses, travels between organisations,
  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.

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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 peoples personal
information was exposed as a result of a flaw in
third-party software.
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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
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• 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.

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• 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.

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• 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 sets statistical features but excludes any
  private information.

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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.
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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.
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