5 biggest risks of using third-party services providers

As business processes become more complex, companies are turning to third parties to boost their ability to provide critical services from cloud storage to data management to security. It’s often more efficient and less expensive to contract out work that would otherwise require significant effort and potentially drain in-house resources to those who can do it for you.

The use of third-party services can also come with significant—often unforeseen—risks. Third parties can be a gateway for intrusions, harm a company’s reputation if a service malfunctions, expose it to financial and regulatory issues, and draw the attention of bad actors from around the world. A poorly managed breakup with a vendor can also be perilous, resulting in the loss of access to systems put in place by the third party, loss of custody of data, or loss of data itself.

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