As more businesses tap into offshore talent to stay competitive, there’s one non-negotiable question on every operations manager’s mind: Is our data safe?

Outsourcing can drive down costs and help you hire in days, but without robust data security measures, it can also expose your business to risk. In fact, nearly 60% of small businesses close within six months of a data breach¹. That’s why data privacy and protection should be part of every outsourcing decision from day one. 

In this guide, we’ll walk you through the most significant security risks, the certifications that matter, and the best practices to protect your business and customer information when working with offshore teams.

Why data privacy is critical when outsourcing

Whether your offshore team handles customer records, payment information, or proprietary systems, sensitive data is likely being moved across borders and into third-party hands, which introduces a new layer of risk. Not only do you need to worry about potential cyber threats, but also whether your provider meets compliance requirements like GDPR, ISO 27001, or local data privacy laws.

The consequences of poor data security can be severe. According to the IBM Cost of a Data Breach Report 2024, the global average cost of a data breach has surged to USD 4.9 million - a 10% increase over last year and the highest figure ever recorded².

One in three breaches now involve shadow data³ (information businesses didn’t even realise they were storing), making it more challenging than ever to track and protect sensitive assets.

That’s what makes data security in outsourcing so complex: without clear processes and transparency from your partner in data handling, you’re flying blind.

The biggest data security risks in outsourcing

Not every breach is the result of a sophisticated cybercriminal. Many data security failures come down to basic but critical gaps in training, policy, or oversight. When working with offshore partners, those gaps can be even harder to spot and fix if you’re not proactive.

Here are some of the most common risks to watch out for:

1. Unauthorised access to systems or client data

When too many users have access (or the wrong people do), it increases the chances of misuse, whether accidental or deliberate. This is especially risky if role-based permissions aren’t in place.

2. Data leaks through unsecured channels or weak protocols

Sharing files via unencrypted email or using outdated collaboration tools can expose sensitive information to unintended recipients or third parties.

3. Cyberattacks like phishing, malware, or ransomware

Offshore teams are often targeted with phishing emails designed to trick them into giving up credentials or downloading malicious software, especially if security training is lacking.

4. Insider threats, both malicious and accidental

Not all threats come from outside. A disengaged, disgruntled, or careless team member can become a major liability if they mishandle or intentionally leak data.

5. Human error from lack of training or awareness

Simple mistakes such as sending client information to the wrong address or using weak passwords can expose your business to serious breaches, especially when teams aren’t regularly trained in data handling protocols.

6. Outdated infrastructure or lack of endpoint protection

If your provider’s systems or devices aren’t properly secured, patched, or monitored, they can become easy entry points for attackers.

Outsourcing can expose you to these risks if your provider doesn’t have the right security controls in place, or if your business doesn’t enforce them. And while some of these issues may seem minor, they can escalate quickly into a serious breach with major financial, legal, and reputational consequences. Security needs to be a shared responsibility between you and your outsourcing partner.

How to vet an outsourcing partner’s data security controls

Not all outsourcing partners take security as seriously as they should. Due diligence is critical, especially before you hand over access to sensitive business or customer information.

Start by asking the right questions. A reputable provider should be able to give clear, specific answers backed by documentation, not vague assurances.

Here’s what to ask:

• Do you hold recognised security certifications like ISO 27001, SOC 2, or PCI DSS?

These aren’t just badges - they show that the provider has passed rigorous assessments and follows globally accepted security standards. If they don’t have any certifications, ask why.

• What are your data privacy policies, and how are they enforced day-to-day?

A good policy means nothing without clear implementation. Find out how they train their teams, what internal controls are in place, and how they stay up to date with changing laws like GDPR or APPs.

• What encryption standards, firewall protections, and access controls do you use?

Data should be encrypted both in transit and at rest. Ask about their network security (firewalls, intrusion detection), as well as tools like VPNs and two-factor authentication.

• How is data stored, who has access, and what happens at the end of the partnership?

It’s crucial to know where your data lives, how it’s segregated from other clients, and what protocols are in place for secure deletion once your engagement ends.

• Do you have a documented incident response plan?

You want to know how quickly they detect, respond to, and report a breach. Ask for a walk-through of their process and whether they conduct simulations or tabletop exercises to stay prepared.

Also, ask for copies of certifications, audit results, or compliance reports. You can request a virtual tour or security overview session with their IT or compliance team.

If a provider is vague, unwilling to share information, or overly defensive, that’s a red flag. A transparent, security-conscious partner will welcome the conversation and be able to prove they walk the talk.

5 best practices to protect your business information

Even if you’ve chosen a provider with top-tier credentials, your job doesn’t end there. Data security is a shared responsibility, and the strongest defences come from putting layered controls in place across people, policies, and platforms.

Here’s how to protect your business at every stage of your outsourcing relationship:

1. Define data ownership clearly in contracts

The contract should be more than a service agreement. It’s your first line of defence.

• Spell out exactly who owns the data during and after the engagement
• Define how data will be stored, accessed, and deleted once the partnership ends
• Use NDAs and clauses that cover confidentiality, compliance, and liability for breaches

Ensure your contracts are reviewed by legal or compliance teams familiar with cross-border data handling.

2. Control access with strict role-based permissions

Not everyone needs access to everything. Limiting permissions is one of the most effective ways to minimise risk.

• Implement role-based access controls so users only see what they need
• Require secure VPNs and two-factor authentication (2FA) for all systems
• Regularly audit user permissions and login activity to spot irregularities
  
  

3. Train offshore teams in cybersecurity best practices

Human error is one of the biggest causes of data breaches. Training is your best defence.

• Provide onboarding and refresher sessions on:
  
  • Password management
  • Phishing awareness
  • Safe file sharing and device use
• Make sure offshore teams follow your internal IT usage and data handling policies
• Reinforce security protocols through regular reminders or simulated phishing drills
  
  

4. Use secure infrastructure and approved collaboration tools

Your tech stack matters. Avoid generic or unvetted tools that lack admin control.

• Use cloud platforms with strong admin settings (e.g. Google Workspace, Microsoft 365)
• Choose encrypted messaging and file-sharing tools
• Install endpoint protection on all offshore devices, especially if they access sensitive systems

If your team uses their own devices (BYOD), implement a security policy or use mobile device management (MDM) tools.

5. Plan for the worst with an incident response and recovery plan

Even the most secure setups need a plan B. This helps ensure you can recover quickly with minimal disruption.

• Back up critical data regularly and securely
• Run breach simulations with your offshore team to test your response
• Review your provider’s disaster recovery process - how fast they can react, restore access, and notify you
  
  

Certifications that matter in outsourcing

When it comes to outsourcing, trust is earned through action, not assumptions. Industry-recognised certifications are one of the clearest indicators that an outsourcing provider takes your data seriously.

Here are the key credentials to look for and what they actually mean:

• ISO 27001 - A globally recognised standard for managing information security. It shows that a provider has clear, documented processes for identifying, managing, and reducing security risks.
  
  
• SOC 2 (Type I or II) - Demonstrates that a provider has strong controls in place around data security, availability, processing integrity, confidentiality, and privacy. Especially relevant for tech-enabled service providers.
  
  
• PCI DSS - Essential for any business that handles credit card transactions. It ensures that cardholder data is stored, processed, and transmitted securely.
  
  
• GDPR compliance - Required if your business collects or processes data from individuals in the EU. It covers consent, access rights, data handling, and breach notification rules.
  
  
• HIPAA compliance - Critical for businesses handling health-related information, especially if outsourcing roles in healthcare or medical admin.

What does a secure outsourced setup look like?

When you outsource, your provider becomes an extension of your business, so their security standards need to match your own. A truly secure offshore environment includes encrypted cloud storage, strict access controls, dedicated workstations with endpoint protection, and admin-managed collaboration tools. Physical delivery centres should have safeguards like biometric entry and surveillance, backed by certified data centres and regular compliance audits.

Protecting sensitive data is only one part of the equation - strong security also lays the groundwork for sustainable growth. When your systems are locked down and your processes are clear, it becomes much easier to scale with confidence. And there’s a clear business case for it: companies that invested heavily in security AI and automation saved an average of USD 2.2 million per breach in 2024, according to IBM⁴.

If you're exploring offshore options, make sure you're not just ready to grow, but ready to grow securely. Not sure if you're ready to outsource? Here are 5 signs your business might be.

Data security at Teamified

At Teamified, your data security is non‑negotiable. Every outsourcing partnership is supported by secure infrastructure, strict access controls, and ISO‑aligned practices across key operational areas. We maintain a robust Business Continuity Plan (BCP) and comprehensive security measures, including endpoint protection, user access management, and network safeguards, to ensure uninterrupted protection. From onboarding to offboarding, we handle your business information with the highest care to minimise risk and protect your reputation.

Learn more about how we protect your data in our data security policy.

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References:

[1] Cybersecurity ROI: Why Small Businesses Must Invest in Cybersecurity (kaspersky.com)

[2-4] Cost of a Data Breach Report 2024 (ibm.com)

[5] A Guide to Ensuring Data Security When Outsourcing (emapta.com)

[6] Data security when outsourcing: how to keep your data safe (microsourcing.com)

[7] How to Ensure Data Security When Managing Outsourced Staff (outsourcingfit.com)

[8] Strengthening Data Privacy in Global Offshoring: Our Expert Take (staffdomain.com)

[9] Data Security In Outsourcing: 10 Best Practices For Safer Data (gearinc.com)