|
Recent surveys suggest that data privacy is a growing hot button issue worldwide. With businesses increasingly outsourcing key operations — often to overseas vendors — a new layer of complexity has emerged for companies that must ensure the security and privacy of this critical data
Companies with inadequate vendor contractual provisions for protecting the customer information that they share with offshore vendors may find themselves paying a high price later.
What major challenges do companies face with respect to protecting confidential personal data when outsourcing work to offshore vendors?
The uncertainty stemming from the lack of consistency in data-protection laws across different jurisdictions in particular can pose challenges to firms outsourcing business to vendors overseas. For example, local vendors in India providing outsourcing services currently are not uniformly subject to any extensive legislative or regulatory data-protection controls, whereas companies in Europe are subject to stricter privacy standards. In the US alone, despite the proliferation of state data protection laws, there currently is no comprehensive federal privacy statute for data protection blanketing all sectors of the economy. As there are no consistent universal standards governing privacy practices, firms outsourcing business to offshore vendors must ensure that they have well-constructed agreements in place or they may be subject to absorbing many of the penalties that arise from privacy breaches, even in cases where the offshore vendor is at fault.
|
