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Third-Party Data Risks: How BPOs Can Boost Data Security


In call centers, the customer’s data is the heart of daily operations. Customer interactions shape business landscapes as representatives work tirelessly to support requests and enhance customer service.

The global call center industry had a market size of $314.5 billion in 2022, highlighting the immense impact of this industry worldwide. With this number, you can only imagine how many people use this industry and the sheer volume of third-party data it distributes across various platforms. 

However, balancing the power of customer data while safeguarding it from potential risks becomes challenging—especially as technology continues to evolve. While technological advancements promise efficiency and innovation, they come with data risks that could have severe repercussions for businesses. As the industry grows, so do the threats that jeopardize sensitive customer data. 

How do you mitigate them? Well, knowledge is the best defense against potential pitfalls. Understanding these strategies is paramount for the seamless functioning of both your company and call centers in the modern age. Delve into the intricacies of third-party data breaches in call center operations and explore strategies to help fortify your data security.

What is a Third-Party Data Risk?  

Third-party data refers to information collected and stored by external entities, such as vendors, with whom an organization collaborates. Risks arise due to potential third-party data breaches that happen in various partnerships ranging from payroll processing tools to vendors collecting customer/client data.

Managing third-party risks poses inherent challenges, primarily due to the lack of direct control over the risk management processes of external vendors. Therefore, you should carefully understand and evaluate how external partnerships are critical for safeguarding your company’s sensitive data.

Third-Party Data Risks: Stats and Facts 

Explore revealing statistics and compelling facts that explain the challenges and vulnerabilities organizations face when entrusting sensitive information to external entities.

  • In 2022, the average time to contain a data breach was nine months  (LinkedIn)

It took a total of 277 days to detect and contain a data breach in 2022, and though that’s 9 out of 12 months for that year, it’s still a 10-day decrease from the previous year.

While the decrease in time signifies progress, the duration of detection remains concerning. Almost half of breach costs accrue over a year after the incident, underlining the lasting financial impact despite improved detection and containment timelines.

  • There were 255 million reported phishing attacks in 2022 (SlashNext)

By the close of 2021, 50,000 malicious URLs were identified daily, marking a 68% surge from the year’s onset. In less than a year, this figure surged to 80,000 malicious URLs daily, resulting in the detection of 255 million phishing attacks in 2022. The increase in phishing detection means an increase in thwarting strategies. 

  • Software publishers remained the leading source of third-party breaches, contributing to 23% of incidents for three consecutive years (Black Kite)

These companies, engaged in software development, production, and distribution, are targeted by hackers exploiting their vulnerabilities in software code. Often, these weaknesses are undetected, as businesses commonly assume the security of the employed software without scrutinizing potential flaws in the digital supply chain.

  • In 2023, the worldwide average expense for a data breach reached $4.45 million, reflecting a 15% surge over three years (IBM)

The data breach cost escalated to a record high of $4.45 million in 2023, reflecting a 2% upswing from the preceding year’s $4.35 million and underscoring the persistent and growing financial impact of cyber incidents on organizations. This uptrend highlights the urgency for businesses to continually enhance their cybersecurity measures, especially as cyber threats evolve to bypass security protocols.

  • Google thwarted more than 231 billion spam and phishing emails in November 2022. (Google)

Regrettably, the holiday season witnessed an acceleration in malicious activities. Google intercepted and blocked over 231 billion spam and phishing messages—a notable 10% surge compared to the average volume.

Effects of Third-Party Data Risks on BPOs

Navigate the impact that data vulnerabilities pose to business process outsourcing (BPO) entities and understand the specific challenges they face in safeguarding data integrity. 

  • Loss of data control

Organizations that lose data control are not able to monitor, manage, or protect their data effectively. A data breach exposes sensitive information, compromising confidentiality and eroding your patrons’ trust in your business’s data security.

  • Reputational risks 

Third-party data breaches not only compromise all existing data but also tarnish a company’s reputation. Instances that include divulging sensitive financial information, such as credit card details, can lead to negative publicity and loss of trust from your clients. This, in turn, may result in decreased sales, investor concerns, and long-term damage to your brand.

  • Regulatory non-compliance

Regulatory non-compliance harms organizations financially and erodes client trust, especially when handling sensitive data like patient records. Violation of regulations such as the Health Insurance Portability and Accountability Act (HIPAA) may result in hefty fines and legal actions. 

  • Financial repercussions

Data breaches are not only dangerous but also costly. Besides paying for punitive damages, you’ll also face the immediate costs for investigation, remediation, and notifying affected parties.

Moreover, a breached organization may suffer financial losses due to decreased client trust. For instance, a financial institution falling victim to a phishing attack may incur immediate financial losses and experience a decline in clientele, impacting its long-term economic health.

  • Operational disruptions

Consider a scenario where a manufacturing company experiences a data breach that compromises its production schedules, supply chain data, or intellectual property. Operational disruptions can cause delays in product releases, increased downtime, and potential legal battles, affecting timely deliveries and market competitiveness.

5 Key Strategies for Boosting Data Security in BPOs

In a BPO service setting, safeguarding sensitive data is paramount to maintaining trust and upholding regulatory compliance. This section discusses how you can fortify data security within your company, encompassing continuous system monitoring, data encryption, and the like.

1. Ensure access controls 

Access controls are not solely for gaining access but also for restricting them. BPOs should implement them based on their employees’ job roles to regulate data access.

Securing this may involve user authentication processes, defining authorization levels, and ensuring that only authorized personnel can access specific data. It also mitigates the risk of unauthorized access, whether intentional or unintentional.

2. Monitor all computer systems

Continuous monitoring of computer systems helps identify and promptly address potential vulnerabilities or security breaches. BPOs should regularly audit systems, employ real-time monitoring, and use proactive tools to track network activity, system logs, and user behavior for early detection of unusual activities.

Avoiding a compartmentalized approach ensures a thorough examination of all systems, preventing difficulties in identifying the source of a third-party breach.

3. Encrypt sensitive data

As of March 2022, a staggering 51% of small businesses don’t have cybersecurity measures in place. Given the involvement of BPOs with highly sensitive information, you’ll need robust data privacy efforts and encryption protocols. 

Implement encryption to encode data, rendering it unreadable without the corresponding decryption key. You can also leverage modern technologies such as artificial intelligence, machine learning, and blockchain for enhanced encryption methods.

4. Conduct regular cybersecurity training 

Mistakes happen all the time, but it doesn’t mean there’s no solution for it. Human error is a significant factor in data breaches, with studies revealing percentages ranging from 88% to 95%. Prioritize ongoing cybersecurity training, including recognizing phishing, password best practices, and secure data handling guidelines for your employees.

5. Implement multi-factor authentication (MFA)

MFA adds an extra layer of security by requiring users to provide multiple forms of identification. While it doesn’t stop 100% of attacks, MFA increases security by 30%. It often involves a combination of passwords, biometric verification, or one-time codes. In call centers, MFA is important for strengthening access controls and reducing the risk of unauthorized access to sensitive client information.

Benefits of Strengthening Data Security in BPOs

From fostering client trust to ensuring regulatory compliance and organizational resilience, explore the multifaceted benefits of enhancing data security within BPOs.

Less vulnerability to data risks 

Implementing robust data security measures significantly reduces the likelihood of data breaches, unauthorized access, and other cybersecurity threats. Adopting encryption protocols, access controls, and regular security audits creates a secure environment, minimizing the risk of data exposure.

Increased client trust

Clients prefer BPOs prioritizing data protection, especially considering the sensitivity of the financial information handled. A strengthened data privacy policy enhances your patrons’ confidence, positioning the BPO as a trusted guardian of sensitive information. This commitment enhances the BPO’s reputation and credibility.

Enhanced operational efficiency

Without the fear of third-party data risks, operational processes become more efficient. Security practices contribute to streamlined operations by preventing disruptions. It allows you to focus on core business activities without being sidetracked by the aftermath of data breaches. 

Well-established access controls and monitoring systems can maintain smooth operations. In contrast, a company neglecting data security might face downtime, investigations, and resource allocation to address the aftermath.

Reduced legal and financial liabilities

Adhering to data protection laws and regulations saves you from hefty fines and legal actions. Non-compliance, on the other hand, may lead to severe penalties, impacting the company’s financial stability and reputation. Moreover, wouldn’t it be better for your business if your clients knew that they were working with a company that complies with regulations and upholds legal standards?

Fortified competitive edge in the market

Strong security measures, including penetration testing and resilience against cyber threats, become critical differentiators, attracting customers seeking advanced protection. Prioritizing data protection builds a positive brand image and positions you as reliable and responsible. You mitigate legal risks and showcase ethical practices.

Frequently Asked Questions

1. Who is accountable for managing third-party data risk?  

Accountability for managing third-party data risk typically lies with the organization’s data governance and compliance teams. These teams oversee contracts, monitor third-party activities, and ensure adherence to data protection standards.

2. How can organizations ensure data security compliance with evolving privacy regulations?

You can ensure data security compliance by regularly reviewing and updating policies, conducting audits to assess compliance, staying informed about new regulations, and implementing robust security measures that align with evolving privacy laws.

3. What role does employee training play in preventing data breaches and ensuring data privacy?

Employee training is crucial in preventing data breaches because, as a BPO, you most likely work with your agents to provide your clients with solutions—thus, human error can happen. Well-trained employees act as the first line of defense against potential security threats and ensure compliance with privacy regulations.

4. What are the key considerations when selecting and implementing data security technologies for a business?

When selecting data security technologies, consider factors like scalability, compatibility with existing systems, effectiveness against current threats, regulatory compliance, and ease of integration and management within the organization’s infrastructure.

Safeguard Success in a Data-Driven Future

The call center industry’s exponential growth underscores the pivotal role of client data in shaping global customer service. With technology shaping the daily lives of its users, so do risks that threaten to expose sensitive information. Because of this, you must know how to identify and mitigate third-party data risks to fortify data security and ensure seamless call center operations on a global scale.

For a call center in the Philippines that prioritizes data safety, look no further than EB Call Center. We provide efficient customer service outsourcing solutions to elevate your operations, safeguard your valuable data, and propel your business toward unparalleled success. 

Secure a technologically advanced and protected future by exploring EB Call Center’s services.  

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