How To Secure Third-Party Data Sharing
                     How To Secure 
Third-Party Data 
Sharing
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Data sharing with third parties is becoming very necessary. In today’s corporate 
ecosystem, partnerships, alliances, and collaborations are the new money. Data, the 
lifeblood of modern businesses, travels between organisations, creating chances for 
value generation and strategic growth. However, increasing interconnection 
necessitates strong data security.  
In light of this, data sharing may appear to have two sides:
•On the one hand, it promotes productivity, growth, and innovation.
•However, it exposes firms to potential data breaches, endangering critical data.
This blog will examine the hazards associated with third-party data sharing, as well as 
the challenges, and offer a road map for setting up a safe data-sharing environment.
Understanding Third-Party Data Sharing Risks
Companies exchanging their data with outside parties is known as third-party data 
sharing, and this trend is being supported by cooperative innovation. Sharing data, 
however, exposes organisations with insufficient data access control levels, a lack of data 
encryption during transit and storage, poor security configurations, inadequate 
monitoring, third-party application vulnerabilities, and lax password policies to increased 
security and compliance risk exposure.
A clear illustration of the harm that unsecured third-party data sharing can do is the 2017 
Equifax data breach, in which 143 million people’s personal information was exposed as a 
result of a flaw in third-party software.
Best Practice for Secure Data Sharing
Combining best practices is necessary for secure data sharing. Start with the most important 
ones.
1. Secure Data Transfer Protocol
The integrity and safety of data that is transferred between entities depend on secure data 
transfer protocols. These methods offer the means to protect data, reducing the risks 
connected with third-party data sharing:
 Secure File Transfer Protocol (SFTP): SFTP functions as a Secure Shell protocol 
extension to offer secure file transfer features. SFTP provides strong password and 
public key authentication procedures, ensuring the security and integrity of data while 
it is in transit.
• Hypertext Transfer Protocol Secure (HTTPS): A step above plain HTTP, HTTPS uses the 
SSL/TLS protocol to encrypt data sent over the internet, making sure that sensitive 
material is not revealed while being transmitted.
• FTP Secure (FTPS): FTPS adds further security features to the basic FTP protocol utilising 
SSL/TLS layers, giving data in transit an extra layer of security.
• Internet Protocol Security (IPSec): By establishing encrypted tunnels between devices, 
IPSec safeguards data as it is being transferred, enabling secure communication over 
potentially insecure networks.
2. Data anonymisation Technique:
Data anonymisation is the technique of obscuring original data while preserving usability in 
order to secure sensitive information. Effective application of these strategies depends on 
the type of data, the need for security, and the intended level of usage after 
anonymisation.
•Data masking: This tactic hides specific data components, making them illegible. Sensitive 
information like credit card or bank account details is frequently stored in it.
•Pseudonymization: This process involves using made-up names or pseudonyms in place 
of identifying fields in a data record.
• Generalisation: This method reduces the level of detail in the data, for example, by 
substituting age ranges for precise ages. In order to maintain the general distribution 
while separating individual values from their original records, shuffling entails 
rearranging the data values among related data fields.
• Synthetic data production: It entails taking the original data set and producing a brand-
new, synthetic data set that has all of the original data set’s statistical features but 
excludes any private information.
3. Partner Due Diligence
When sharing data, it is important to exercise due diligence by evaluating the security frameworks, 
compliance with data protection laws, and reliability of third-party screening processes of potential 
partners.
The way IBM handles partner due diligence is a wonderful example of best practice. They conduct 
thorough assessments of potential partners, checking to see if they adhere to relevant standards 
and gauging the breadth and rigour of their own third-party assessment processes.
This proactive strategy guarantees IBM only forms alliances with businesses that adhere to their 
strict security requirements, reducing the chance of data breaches. The business also keeps a 
strong plan for ongoing partner evaluation and adjusts its expectations in line with the most recent 
developments in cybersecurity trends and threats.
Conclusion
It is impossible to overestimate the importance of safe data exchange with third parties, 
especially given the complex modern network of relationships. The adoption and 
application of best practises can assist firms in navigating the potential minefield that is 
data sharing, creating avenues for collaboration and trust rather than opening the door 
for security breaches.
It has also become clear how crucial it is to strike a balance between security and 
cooperation because doing so fosters strong connections with outside partners. 
Businesses can create a more secure, cooperative future by approaching data security as 
a shared duty rather than a barrier. By following these recommendations, your company 
will enter the new era of data sharing, maximising the opportunities while mitigating the 
hazards.
THANK YOU!
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