What to do when your vendor has a data breach
It is not a matter of if, but when one of your vendors will experience a data breach. The prevalence of third-party breaches is on the rise, with 61% of companies reporting incidents in 2023, according to a study by Prevalent. These breaches are not only costly but also take a significant amount of time to be detected and contained, as highlighted in the 2024 IBM/Ponemon Cost of a Data Breach Report.
Some notable breaches this year include Russia’s attack on Microsoft’s email systems, resulting in data theft from the US government, and the theft of personal information from Bank of America customers via Infosys McCamish. With such incidents becoming more common, it is crucial for businesses, especially those handling customer data like marketing departments, to be prepared for when a breach occurs.
There will be a breach
Statistics show that data breaches are inevitable in today’s digital landscape. The increasing frequency and severity of these incidents emphasize the importance of being proactive in safeguarding sensitive information.
What to do before it happens
Prior to a breach, businesses should already have robust IT security measures in place, including thorough vendor vetting processes, adherence to security standards, and data handling protocols. Implementing multi-factor authentication, maintaining vendor inventories, and securing cyber insurance are crucial steps in mitigating risks.
The first thing to do
Upon receiving notification of a breach from a vendor, swift action is essential. Informing the security team and providing them with relevant details is the initial step in containing the breach and minimizing its impact.
Establish clear lines of communication with the vendor
Designating a point of contact for communication with the vendor is vital to ensure a coordinated response. Regularly verifying data protection measures and vendor cooperation are key components in managing the aftermath of a breach.
Review the contract
Legal review of the contract with the vendor is imperative post-breach to determine responsibilities and remediation actions. Clarity on data breach notification requirements and vendor obligations is essential for maintaining a productive vendor-client relationship.
Set clear expectations for next steps
Establishing a clear roadmap for post-breach actions, including deep audit testing and vendor cooperation, is critical in restoring trust and addressing vulnerabilities. Transparent communication with customers regarding the breach is paramount in preserving relationships.
After the breach
Internally, assessing the extent of the breach, notifying relevant authorities, addressing root causes, reviewing security processes, and documenting the incident are crucial steps in post-breach response. Protecting customer relationships while ensuring transparency and compliance are key priorities.
FAQs
1. What should businesses do to prepare for a potential data breach?
Businesses should implement robust IT security measures, conduct thorough vendor vetting, and maintain data handling protocols to mitigate risks.
2. How should businesses communicate with vendors post-breach?
Designating a point of contact for communication, verifying data protection measures, and ensuring vendor cooperation are essential in managing the aftermath of a breach.
3. What role does legal review of contracts play in post-breach response?
Legal review helps determine responsibilities, remediation actions, and ensures clarity on data breach notification requirements and vendor obligations.
4. Why is transparent communication with customers crucial after a breach?
Transparent communication helps preserve customer trust, demonstrates accountability, and ensures timely information dissemination.
5. How can businesses protect customer relationships post-breach?
By prioritizing transparency, providing timely updates, and demonstrating proactive measures to address vulnerabilities, businesses can safeguard customer relationships.
