Optimizing Vendor Risk Management with External Data Privacy

Executive Takeaways

  • Strengthening vendor risk management (VRM) is crucial as organizations are more reliant on third-party vendors to supplement or complement operations.
  • Traditional VRM solutions are missing a critical feature that scans external sources for exposed employee data, creating a security gap.
  • External Data Privacy (EDP) solutions can help organizations bridge a security gap via a solution that scans for and monitors the data shared with third-party vendors.
  • VRM solutions often focus too much on information storage and sharing, neglecting external PII and the risk posed by Data Brokers and People Search sites.
  • Integrating EDP can help organizations comply with newer data privacy laws that place more onus on ensuring that their vendors are compliant with regulations.

Organizations are increasingly reliant on third-party vendors to supplement or complement operations. This increasing reliance expands organizational threat surfaces, as vendors require access to sensitive employee and customer Personally Identifiable Information (PII). For these reasons, strengthening vendor risk management (VRM) is crucial.

A critical feature missing in traditional VRM solutions is one that scans external sources for possibly compromising employee data. Hence, exploring the possible need for an effective External Data Privacy (EDP) solution within a VRM framework is critical. 

EDP can help organizations close this security gap via a centralized platform that scans for, removes, and monitors the external data often shared with third-party vendors.

What is External Data Privacy?

EDP refers to the 24/7 scanning, removal, and monitoring of external employee PII data. In this context, “external” means any data outside an organization’s technical infrastructure. This includes personal data obtainable via a simple Google search and in the databases and websites of Data Brokers and People Search Sites.

Data Brokers and People Search Sites have fueled PII’s proliferation, dissemination, and publication/sale. Both have been major catalysts in the rise of social engineering and spear phishing attacks. Among the key players driving this trend are people search sites, which have played significant roles in enabling social engineering to thrive.

Data Brokers

Data Brokers have built a $250+ billion industry specializing in collecting, packaging, and selling PII to third parties. A load of controversy surrounds Data Brokers, as they are known to sell PII without the knowledge or consent of individuals.

Regrettably, Data Brokers’ practices are still largely unregulated, and their data collection and storage methods are not well known.

This lack of transparency threatens individual and organizational privacy and stability. Data Brokers have violated several laws, including the Fair Credit Reporting Act (FCRA), the California Consumer Protection Act (CCPA), and the Federal Trade Commission (FTC) Act.

Some have been accused of crimes like transferring credit card numbers, selling sensitive information, and discriminatory practices. Others fail to provide adequate security for collected data, contributing to the high number of data breaches in the industry.

People Search Sites

People Search Sites are a type of Data Broker that collects large amounts of data from public records. Like other Data Brokers, People Search Sites pose a threat to organizations, as they collect and sell employee PII.

People Search Sites are a unique threat in that they have more access to public records. Because their target market tends to search for contact information about a specific individual, the contact data collected on said individuals are usually more complete and thus dangerous. For organizations, this means more precise PII that can be used to evade security controls.

Several People Search Sites even contain sensitive PII such as Social Security numbers and others. Like Data Brokers, People Search Sites have also been accused or found guilty of violating several federal and state laws.

The Need for EDP-Focused Solutions in Modern VRM Models

Access to customer and employee PII carries innate risks, including data breaches and other forms of attack.

Most VRM solutions tend to overemphasize what information is stored and how it is shared or otherwise managed. Few if any do anything to address the problem of external PII. Fewer recognize or are aware of the threat that Data Brokers and People Search sites pose.

We are all familiar with the consequences of overlooking an attack vector. By adding an EDP-focused application to traditional VRM solutions, organizations close a vital security loophole and enhance their security posture.

Business leaders must understand that modern VRM solutions are missing a vital security element. Integrating an EDP solution focused on the scanning, deletion, and monitoring of possibly compromising third-party vendor employee PII is critical for organizations with the necessary risk profile.

It’s important to take proactive measures to reduce the innate risks of vendor relationships. A practical solution must monitor and assess vendor partners’ data privacy practices, including tracking and auditing their access to sensitive data like customer and employee PII. A good solution should also enable automated alerts for potential security risks or non-compliance issues, which we will discuss.

EDP and Vendor Compliance Synergy

Besides reducing the attack surface of organizations and their vendor partners, EDP solutions assist them in compliance with data privacy laws.

Personal data privacy is quickly becoming a demand of the masses (thanks in no small part to the vast increase in data breaches and the uncovering of Data Broker and People Search Site misdeeds.) This growing public concern has resulted in the passing of several data privacy laws, a legal trend most experts believe will continue.

Most critically, recent data privacy regulations are placing more onus on organizations to ensure that their vendors are compliant with the relevant regulations. Any VRM framework must take this into account.

The legislation introduces additional VRM requirements for organizations. Under the CCPA, companies are accountable for vendor handling of information. Before entering into a contract, organizations must gauge vendors’ privacy and security practices through due diligence. Additionally, organizations must continuously monitor third-party vendor activity for CCPA compliance.

Similar to the CCPA, the VCDPA requires businesses to assess their vendor relationships and ensure vendors take the necessary measures to protect consumer data. This means investigating vendors’ policies, procedures, and security practices concerning consumer data protection.

The result of this shift in the regulatory landscape is a tilting of the data responsibility table, to the chagrin of organizations. Here’s where an EDP-VRM solution comes in.

An EDP-VRM solution can help organizations comply with data privacy laws and regulations by:

  • Giving a comprehensive view of third-party vendor activity
  • Providing automated tools for assessing vendor privacy and security practices
  • Monitoring changes to a vendor’s data privacy stature 

Optimize Vendor Risk Management with Privacy Bee

Privacy Bee’s free Vendor Risk Management application provides organizations with the tools and resources to assess, monitor, and manage their vendor relationships. The solution helps organizations identify potential risks associated with vendors, such as data compliance issues or security vulnerabilities.

The platform provides visibility into vendor data management activities and allows organizations to track changes to vendor risk over time. Moreover, the VRM application enables organizations to create custom policies for each vendor and set up alerts for any vendor PII changes that could affect the organization’s security posture.

Powerful, customizable features of Privacy Bee’s VRM application include:

  • Top at-risk Vendors are identified, giving insight into possible next steps.
  • Privacy Risk Thresholds to set a minimum tolerance for vendor risk scores.
  • Privacy Risk Assessments to ensure every vendor is following best practices.
  • Department-level risk assessments allow organizations to identify the specific operations that are most at risk.
  • A list of vendors curated by Privacy Bee’s VRM experts.

Learn about the Privacy Bee platform and how it can de-risk your organization.

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