An organization is considering outsourcing the processing of customer insurance claims.
An IS auditor notes that customer data will be sent offshore for processing.
Which of the following would be the BEST way to address the risk of exposing customer data?
Click on the arrows to vote for the correct answer
A. B. C. D.D.
The risk of exposing customer data is a significant concern when outsourcing the processing of customer insurance claims, especially when the data is sent offshore. As an IS auditor, it is important to recommend the best way to address this risk.
Option A, requiring background checks on all service provider personnel involved in the processing of data, is a good practice, but it may not completely mitigate the risk of exposing customer data. Background checks may identify individuals with a history of fraud or other criminal activities, but they do not guarantee that these individuals will not commit fraud or mishandle data in the future.
Option B, recommending the use of a service provider within the same country as the organization, is a good practice as it can reduce the risk of data exposure. However, this may limit the organization's choices of service providers and may not be cost-effective.
Option C, considering whether the service provider has the ability to meet service level agreements (SLAs), is an important consideration as SLAs specify the levels of service that the service provider is expected to provide. However, SLAs do not directly address the risk of data exposure.
Option D, assessing whether the service provider meets the organization's data protection policies, is the best option to address the risk of exposing customer data. Data protection policies specify the controls and procedures that service providers must follow to protect sensitive data, such as customer data. By assessing whether the service provider meets the organization's data protection policies, the IS auditor can determine whether the service provider is capable of handling customer data securely.
In summary, Option D is the best way to address the risk of exposing customer data when outsourcing the processing of customer insurance claims. However, background checks on all service provider personnel involved in the processing of data and considering whether the service provider has the ability to meet service level agreements should also be part of the overall risk management strategy.