In an Experian study, “Securing Outsourced Consumer Data” produced by the Ponemon Institute it was revealed that 46% of organizations do not evaluate the security and privacy practices of vendors before sharing sensitive or confidential information.
The survey of almost 750 individuals in organizations that transfer consumer data to third-party vendors was undertaken to increase understanding of data breach frequency when consumer data is outsourced, to determine what steps are taken to ensure vendor's data stewardship, and to evaluate privacy and security practices between companies and outsource vendors.
"Many companies have higher standards for their in-house data security practices than they have for vendors that they enlist to hold customer information,” said Michael Bruemmer, vice president at Experian Data Breach Resolution. “The standards should be consistent, because not adhering to the same policies leaves companies vulnerable."
When sharing sensitive and confidential consumer information, 49% said that they do not monitor or are unsure whether their organization monitors vendor security and privacy practices.
Additional key findings from the survey include:
•56% of respondents acknowledged incidents when their organizations did not act on a vendor’s data breach
•Outsourcing consumer information demands oversight survey results indicate that organizations that transfer or share consumer data with vendors experience data breaches more often than not
•65% of respondents said their organization had a data breach involving the loss or theft of their organization’s information
•64% of respondents reported their organization has experienced more than one data breach
•Training is essential to protect against data breaches. Causes for data breaches can be reduced significantly through enforcement of policies and effective training
•45% of respondents reported negligence as the root cause of third-party data breaches
•40% of data breaches were the result of lost or stolen devices
•Security and control procedures need improvement
•56% said their organization learned about a data breach accidentally
•Only 27% said the organization’s security and control procedures uncovered the incident
•23% said the vendor’s security and control procedures alerted the organization to a breach
“It is imperative that businesses and organizations place a priority on evaluating a vendor’s ability to secure sensitive data” said Dr. Larry Ponemon, chairman and founder of the Ponemon Institute.