Types of service providers

A service provider is an organisation or person that provides any form of service to another organisation or individual.

Most service providers will have access to, use or store data or information in relation to providing a service that could be involved in a data security breach.

Such data or information may include personal information, confidential financial information or trade secrets, intellectual property and government official information.

A data security breach may arise whenever data or information of a service provider is accessed or used in any manner without permission, or is stolen, lost, corrupted, damaged or destroyed.

This may occur through the deployment of malicious code, by the acts or omissions of the service provider’s employees or contractors, and through unauthorised access to and use of a service provider’s data, or information by theft of data or information, or theft of IT devices on which such data or information is stored.

If a service provider does not maintain effective data security, it may be exposed to a number of risks, in particular, legal, financial and reputational risks.

Where a service provider subcontracts or outsources services or tasks to another party, it should ensure that the security posture of the other party is at least as effective as the security posture of the service provider.

The service provider should also consider whether the jurisdiction in which such other party is located would enable the service provider to effectively enforce contractual obligations in relation to data security against the other party.