Ten Things to Think About® when assessing a supplier for privacy risks
In today's digital age, businesses collect and store more data than ever before. This data includes sensitive information about customers, employees and other stakeholders. When businesses share this data with third-party suppliers, they take on a significant responsibility to protect it.
What are privacy risks?
Privacy risks are any potential threats to the confidentiality, integrity or availability of personal data. These risks can include data breaches, unauthorised access, loss of data and misuse of data.
Why is it important to assess suppliers for privacy risks?
It is important to assess suppliers for privacy risks to:
• comply with the law – in many countries, there are laws that require businesses to protect personal data
• protect your reputation – a data breach can damage your reputation and cost your customers
• manage your supply chain risks – a data breach at a supplier can expose your data and lead to financial losses.
What to consider when assessing a supplier for privacy risks
1. What security measures does the supplier have in place to protect data?
Understand the specific technical and organisational measures the supplier employs to safeguard data. This includes encryption, firewalls, intrusion detection systems and secure data storage practices.
2. Does the supplier have a privacy policy that is consistent with your own?
Review the supplier’s privacy policy to ensure it aligns with your company’s standards and commitments. This ensures that both parties have a mutual understanding and approach to data privacy.
3. What kind of personal data will the supplier be processing?
Identify the types of personal data the supplier will handle. This can include names, addresses, financial information and health records. Knowing the data types helps in assessing the level of risk and necessary safeguards.
4. Does the supplier comply with the laws and regulations that apply to personal data?
Verify that the supplier adheres to relevant data protection regulations, such as GDPR and other local laws. Compliance ensures that the supplier meets legal requirements and standards for data handling.
5. Has the supplier had any data breaches or other privacy incidents in the past?
Investigate the supplier’s history of data breaches or privacy issues. Understanding past incidents can provide insight into the supplier’s risk profile and their ability to prevent future breaches.
6. Can the supplier provide you with information about how your data will be used and protected?
Ensure the supplier can clearly articulate how they will use, store and protect your data. This transparency is crucial for maintaining trust and ensuring proper data handling practices.
7. Does the supplier have a plan for responding to data breaches and other privacy incidents?
Assess the supplier’s incident response plan. A robust plan should include steps for identifying, containing and mitigating data breaches, as well as notifying affected parties in a timely manner.
8. Does the supplier provide its employees with training on data privacy?
Verify that the supplier regularly trains its employees on data privacy policies and practices. Employee awareness and education are critical components in preventing data breaches and ensuring compliance with privacy regulations.
9. How much will the assessment cost?
Conducting a privacy risk assessment can be expensive, but it is important to weigh the cost of the assessment against the potential cost of a data breach.Consider the long-term benefits of mitigating risks versus the upfront costs of the assessment.
10. What is the company's risk tolerance?
Some companies are more willing to tolerate privacy risks than others.Understand your company’s risk tolerance and compare it with the supplier’s risk management practices. Aligning risk tolerance levels helps in making informed decisions about partnerships.
By considering these factors, companies can take steps to mitigate the risks of privacy breaches and other privacy incidents in their supply chains. By acting responsibly, companies can protect their customers' data, comply with the law and manage their supply chain risks.
