Tips for Managing Third-Party Risks in Data Protection

Today’s modern business world has become increasingly interconnected as more businesses share vast amounts of personal data (and access to the data) to third parties to achieve business efficiency. 

While this has helped make business processes straightforward and more cost-efficient, it has also increased data breach risks. To ensure third-party performance and vendor risk is managed accordingly, it is ideal to have the required expertise and knowledge in the area.

Dealing with Third Parties: Common Mistakes

Many organisations make mistakes when procuring a reliable third-party vendor for outsourced services. Unfortunately, these mistakes can be very costly to the organisation and can result in financial loss, reputational damage, and revenue loss.

Some of the most prevalent blunders organisations make when working with third-party vendors include:

  • Focusing solely on the price when picking suppliers
  • Qualifying suppliers based mainly on previous relationships
  • Failing to recognise the risks that third-party vendors bring to the organisation
  • Assuming that established or popular vendors pose a lesser risk
  • Insufficient contractual protection and arrangements
  • Failure to monitor performance
  • Lack of agreed performance
  • Failure to cultivate, sustain, and audit relationships with suppliers
  • Failure to track or address expiry, disputes, renewals, and termination

Data and Third-Party Vendor Management

Since there are now more stringent requirements, it is crucial for organisations to ensure there is effective third-party management governance. To do this, a third-party management plan has to be formulated. It should also be aligned to the organisation’s overall governance, risk management, and compliance (GRC) strategy. 

What Governance, Risk Management and Compliance (GRC) Means

GRC meaning is straightforward. GRC is a business strategy that is designed to enable organisations to achieve regulatory compliance through effective governance and risk management. Nowadays, there are GRC certifications that are developed and offered to help professionals gain a deeper understanding of GRC.

This is also important so they can develop the skills and expertise to be able to effectively integrate governance, risk management, and compliance in one capacity. They also now have access to GRC platforms so they can easily manage the different types of risk and compliance across multiple departments including HR and IT.

Principled Performance and GRC

According to OCEG, GRC is “an integrated suite of capabilities that aids an organisation to achieve principled performance.” It is also referred to as the dependable achievement of objectives while acting with integrity and addressing uncertainty.

Since the requirements and risks organisations face are constantly evolving, this can dramatically impact their operations. As a result of these challenges, organisations need to realign their business objectives. Principled performance and GRC will help enable them to effectively address uncertainties and achieve their goals at the same time.

Also, with data protection laws now being established globally, it has become a necessity for organisations to ensure that they are compliant with these new regulations. It is important to remember that data is at the heart of every business in today’s highly digital economy. That said, managing data is a risk area organisations should focus on in GRC.

A Data Protection Officer (DPO) will help an organisation manage risks in terms of processing personal data to ensure compliance with the current local data protection laws. Data protection compliance is considered a microcosm of an organisation’s overall GRC strategy and it focuses on the protection of personal information. If DPOs want to broaden their skills, expertise, and knowledge of governing personal data, they can embark on the GRC route.