Your Third Party Data Classification is Outdated (and You Don’t Know It)

By Chris Murphey

Third Party Data Classification

Third-party vendors are essential to managing a sustainable and efficient business. However, each time you add a new vendor to your list, you are potentially opening up your data to more risk. 

Classifying your vendors and the data they have access to is just one step in properly protecting your information. Through proper categorization, you can keep a clear eye on who you’re working with, what information they have access to, and where that information is stored.

Unfortunately, many organizations are operating with outdated data classification systems. Without even realizing it, they are leaving gaps in their vendor risk management strategy. 

Refining and consistently updating your data classification for third-party vendors can help you ensure your security is strong and your information is protected. Let’s take a look at how to identify if your data classification system for third-parties is outdated, and what you can do to keep it up-to-date. 

How Third Party Data Classification Systems Become Outdated

Everyone has their own systems for classifying third-party data. It usually goes something like this… 

You begin a partnership with a new vendor. Early on in your discussions, you classify them based on what you believe your business relationship will look like. You input them into your system according to the types of data you believe they will need access to in order for that your partnership run smoothly. 

Unfortunately, that initial classification doesn’t consider what the terms and conditions actually are. After you’ve finished your onboarding process, the relationship may change.  Your initial categorization may no longer be accurate. 

This puts your data at risk in a few different ways. 

First, classifying your vendors the wrong way can give them access to information they don’t need. This kind of oversharing exposes both your data and your clients’ data to individuals without the means to properly protect it. 

Second, improper classification can cause you to waste resources. It can lead to unnecessary and time-consuming assessments for vendors who don’t warrant it.

Properly Classifying Your Third Party Data

Anytime you’re working with third-parties, you want to be sure they’re properly categorized and filed within your system. This means consistent reviews about the nature of your business with the vendor, as well as what data they’re given access to. 

Unfortunately, this can become a time-consuming process when you have hundreds or even thousands of vendors in your ecosystem, and your team usually doesn’t have the time to properly audit how they are categorized. 

However, with a little detective work, you’re able to automate the auditing process. This ensures each of your third-party vendors is classified the right way.

When most companies grant a third-party access to one of their systems, they register the person or company in their HR system. This gives them an account and will initiate the provisioning of access. You can leverage that managed data and cross-reference it with your vendor management, Configuration Management Database (CMBD) and procurement systems to identify anomalies. If, for instance, they have access to Personally Identifiable Information (PII) in your HR system but they’re not classified that way by procurement or Vendor Management, a red flag should go up that prompts you to reclassify them.

Rsam helps you automate this process. Through building logical rules, Rsam can use your third-parties’ Unique IDs to search for elements or classifications that seem out of place. The system can then send an email alert letting you know what needs your attention, saving you time and resources. 

Third-party vendors are an important part of running just about any business. However, to ensure you’re working with vendors as efficiently and safely as possible, you need to have a proper classification system. 

If you’re interested learning more about 3rd and 4th party data classification, let's continue the conversation.