In this age of data breaches, you are likely concerned about the security of any new software or cloud solution your organization maybe utilizing. After all, whether due to intentional hacks, accidental leaks or negligence, breaches can be costly for businesses – to the tune of $3.62 million, on average. Weak security can expose customer data and trade secrets, and jeopardize trust and other intangible assets.
But can your contract management software make you vulnerable to these risks? The short answer is no – but only if you are using a platform that offers the protection you need.
In fact, the right contract management software can actually give you the tools to protect your organization better than common piecemeal solutions for storing and sharing vital agreements, such as spreadsheets and SharePoints. Contract management software can not only reduce the risk of a breach but also help organizations more quickly locate the cause and contain security incidents should they occur, reducing costs and other fallout.
In order to better understand how your contract management solution can better keep your documents secure, it’s important to consider the main vulnerabilities within the contract management lifecycle, as well as the security features to look for to reduce your risk at every stage.
Vulnerability 1: Compromised access credentials and phishing scams
From sharing login information to phishing scams, there are numerous ways unauthorized individuals may gain access to cloud platforms, including your contract management software, online storage, and other sensitive locations.
How to reduce the risk: Look for solutions that offer features to ensure the person trying to gain access to your data is the one intended. Here are two features to look for that can protect against unauthorized logins:
- Multi-factor authentication: Some software relies on a combination of username or email and password alone. This is a problem because passwords alone are infamously insecure – they can be obtained through phishing scams, hacks, or, if they’re weak, just by guessing. Multi-factor authentication adds an extra layer of security by creating a “secret key”, such as a one-time verification code that is transmitted via text to the cellphone number within the authorized user’s profile. Verification codes are sent instantly, so this added security layer doesn’t come at the expense of timely access to contracts.
- Single-Sign-On (SSO): SSO is a centralized program that allows individuals to authenticate once and then access multiple company applications within a single session. Paired with a strong company-wide password policy, this feature can enhance security as it allows organizations to enforce in-house rules such as the requirement of new passwords at set intervals and password complexity standards.
Vulnerability 2: Malicious users and employee leaks
According to the Ponemon Institute, an independent research body that conducts an annual review of the causes and costs of breaches, as many as 75% of data breaches are caused by either human error or malicious attacks. When it comes to contract management, this can include the intentional and unintentional sharing of documents with unauthorized individuals. According to the Global Contract Management Association, as many as 80% of organizations use tools such as Excel spreadsheets or SharePoints to manage contracts. This solution can make limiting access to sensitive documents to only the right people a challenge. If a breach occurs, it can also make it challenging – if not impossible – to identify the breach and its culprit, and securing your contracts after the fact may require you to rebuild your contract repository from scratch.
How to reduce the risk: An important principle in data security is that of “least privilege”. According to this principle, granting users the minimal level of access to do their jobs can help to reduce the risk of breaches. In contract management, this means granting stakeholders access to only the documents they need. Customizable user permission levels take the notion a step further, allowing administrators to not only control who can access specific documents but also the type of functions they may perform. For example, some individuals may only need to be able to read specific contracts; by setting their permission level to “read-only” you can ensure that they cannot download copies. Features such as watermarking further discourage unauthorized sharing by displaying a digital watermark that includes the active user’s information, while audit trail reporting allows you to see who accessed what and when.
Vulnerability 3: Document storage and retrieval
Documents are only as secure as their container – how and where you store sensitive information is another important consideration when it comes to keeping your contracts secure. If you store documents in a physical container, such as a filing cabinet, that means employing tactics such as locks or security personnel to keep them safe. When it comes to using software to manage your contracts, the security options may not seem as obvious, unless you’re an IT person. But incidents such as hardware failure and hacker attacks are among the risks you’ll want to address.
How to reduce the risk: Configuring your own contract repository (or any in-house storage solution) requires your IT department to always stay on top of the latest threats and deploy patches and security updates immediately. But a solution with built-in cloud security can reduce this burden. While the security particulars will vary depending on your software solution, look for a provider that stores your data in multiple, geographically discrete centers, which can reduce the risk of loss due to hardware failure, physical theft, deletion and natural disasters. Data should also vencrypted, both while in transit and during storage.