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Danger of Ignoring Security Compliance Protocols

For many organizations, outsourcing business operations to third-party vendors can be an attractive way of cutting costs and increasing efficiency. However, it is essential to remember that when you’re dealing with outside vendors, you’re not putting your organization at risk if they don’t adhere to the same security compliance protocols as you do.

While most businesses understand the importance of cybersecurity compliance, they may not be aware of the potential consequences of failing to ensure that their third-party vendors meet specific regulatory requirements, not to mention the reputational damage that could be done if a data breach occurs due to a vendor’s negligence.

For instance, HIPAA (Health Insurance Portability and Accountability Act), requires healthcare facilities that have access to Protected Health Information (PHI) to take actions to ensure the protection of patient data. In order to protect yourself and your organization, it is important to follow some critical steps to ensure that third-party vendors abide by security compliance protocols and not inadvertently putting your business at risk.

Evaluating Potential Vendors

When it comes to hiring third-party vendors, companies must be aware of the potential risks that come with selecting a non-compliant vendor. Without proper security measures, businesses can face serious consequences such as data breaches malicious content being served to their users, and the potential for viruses to spread throughout their systems — all of which can lead to irreparable damage to a company’s reputation and revenue.

It is essential for organizations to take the necessary steps when evaluating potential vendors and make sure they are compliant with all relevant security protocols. Companies should look closely at three key aspects: Access control, system monitoring, and data encryption.

Access Control

Access control helps regulate who has access to certain systems or information within an organization. When implemented effectively, access control prevents unauthorized individuals from gaining access to sensitive data and allows companies to track who is accessing confidential information inside their networks. It is important for organizations to make sure that their third-party vendors have strong access control measures in place that adhere to industry standards.

System Monitoring

System monitoring helps keep track of any changes or updates made to a system to quickly identify any suspicious activity or malicious actors attempting to gain access. Organizations should ensure that their technology infrastructure is secure by requiring their third-party vendors to use advanced system monitoring solutions with built-in capabilities capable of capturing and responding in case of attack attempts.

Data Encryption

Data encryption plays a vital role in protecting stored data from being accessed by unauthorized parties outside of the organization – thus ensuring that confidential information remains secure at all times. Companies must verify if third-party vendors have adopted robust encryption technologies such as SSL/TLS or AES-256 when transmitting and storing data over the internet. Additionally, they may want to consider encrypting all stored files on physical media or databases located on the premise to maximize security across all environments.

Understanding The Costs of Non-Compliance

When companies hire vendors with less-than-adequate security standards, there can be serious consequences. Fines and lawsuits can add up quickly and have a significant financial impact on a company. Likewise, non-compliance can damage a business’s reputation, causing customers to lose trust in their services.

In recent years, government regulations have become increasingly strict regarding data security and privacy. Companies must comply with all applicable laws or face stiff penalties. For example, for our legal transcription services, we must ensure that all transcriptionists are US citizens and have passed criminal background checks. Just one breach of security could mean costly fines from regulatory authorities or a major lawsuit from customers whose data was compromised.

In addition to financial costs associated with non-compliance, businesses may suffer significant damage to their reputations. Customers expect the companies they work with to take the necessary steps to protect them and their data. If an organization fails in its responsibility, then customers may be less likely to trust them in the future and look for alternatives instead.

Adopting Risk Mitigation Strategies

When selecting a third-party vendor, it is important for organizations, like law enforcement agencies and academic institutions, to use a comprehensive risk assessment of the vendor’s security measures. Below are some key strategies that organizations can use to reduce risk and ensure compliance with security regulations:

Prepare Comprehensive Contracts

Companies should create clear contracts that cover all potential risks when working with a vendor. This should include language outlining expectations on both sides and rules for responding promptly if something unexpected arises. This can help ensure smooth operations and avoid disagreements about what is expected from the vendor. It’s important for contracts to include provisions for when either party must provide systems or information, so there are no misunderstandings down the line.

Request Upfront Access to Systems

Another way for companies to protect themselves is by requesting upfront access to systems from their vendors. This will allow them to test and verify the systems before using them and ensure that any issues or risks are identified quickly. It’s also beneficial for companies to run penetration tests on any new systems before officially agreeing to move forward with the vendor to ensure they don’t contain any vulnerabilities that could lead to security breaches or other problems down the line.

Enforce Policies and Regulations

Having a clearly enforced policy helps ensure that vendors follow best practices regarding data security and privacy compliance. Companies should lay out exactly what is expected from their vendors, create rules that are easy to follow, and consistently enforce regulations and standards. This will help prevent unauthorized or unauthorized access to company data, which can be extremely damaging if not addressed immediately.

Regular Auditing Processes

Regular auditing processes can help companies avoid any potential risks associated with third-party vendors. Companies should audit their vendors’ operations regularly to ensure they are meeting all contractual obligations, following best practices, and maintaining software updates so that systems remain secure over time. Audits should also check for weaknesses within existing systems so that preventive measures can be taken if needed. Additionally, companies should have a plan for responding quickly if a breach occurs – this includes having proper incident response protocols in place and ensuring employees understand how such incidents should be handled from start to finish.

The Dos and Don’ts of Third-Party Vendor Relationships

When you are looking to hire third-party vendors, certain do’s and don’ts should be followed to ensure the security of your data. Here are some more detailed tips for businesses looking to find a vendor that is right for them:


Carry out thorough background checks on potential vendors, such as checking references, ensuring they have valid certifications, and researching their financial stability.

You should also make sure the vendor has robust oversight policies in place to ensure the security of your data. It is important to ensure that all security measures are up-to-date with current industry standards and best practices.

Request a detailed breakdown of their technical and organizational measures so that you understand how they protect data. This can include anything from encryption protocols to access control policies.

If possible, try to evaluate their services on a trial basis before making a commitment. This will help you understand how the vendor operates before entering into an agreement.


Cybersecurity is a priority for your organization. Don’t make cost-cutting decisions at the expense of cybersecurity. Investing in high-quality products and services will pay dividends in the long run regarding protecting your data.

You shouldn’t take the vendor’s word regarding their security procedures. Get written evidence that they are following industry standards and ask for regular updates about any changes or improvements made.

Finally, don’t assume all vendors will provide the same level of service and protection as you do. Data breaches where patient files are exposed can happen even when the vendor claims to be HIPAA compliant.  Ask as many questions as necessary before making a decision, so you know exactly what you’re getting from each one.

Take Action to Ensure Secure Vendor Relationships

Third-party vendors play an essential role in the business world and can provide companies with a number of great services. However, it’s essential to ensure that these contractors are always held to the highest security standards so that sensitive company data remains safe. By following the tips above, businesses can find trustworthy vendors and ensure that all of their partnerships remain secure and compliant with industry regulations.

Author Bio:

Ben Walker is a CEO, entrepreneur, and visionary leader that enjoys helping others become successful in business and in life. Ben’s company, Ditto Transcripts, provides user-friendly and cost-effective transcription services for the medical, legal, law enforcement, and financial industries for organizations all over the world. Ben is a sought after thought leader and has made contributions to publications like Entrepreneur Magazine, Inc, Forbes, and the Associated Press. Follow Ben’s Tweets: @benjaminkwalker

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