The increase in data breaches has only led to more regulatory scrutiny. Regulatory focus on third-party vendors was already increasing after the 2008 financial crisis, but has reached a fever pitch in recent years. New data privacy laws often make companies liable for the mistakes of their vendors, even as businesses are relying on outsourcing more and more. So this reliance on vendors, suppliers and subcontractors means increased liability.
Under a law like the CCPA, your organization is responsible for data breaches of third-party and even fourth-party vendors that have access to your customers’ data. A lack of preparation can lead to loss of consumer confidence, reputational damage, and mounting fines which can put a decided dent in your bottom line. For small and mid-sized businesses, the damage can be devastating. So it’s time to look more closely at the regulatory requirements for your vendors.