How Third-Party E‑Commerce Tools Impact Safety of My Customers’ Data

The amount of valuable tools and apps on the internet is something incredible. Website builders, communication tools, social media schedulers, search engine tools, analytical tools, and dozens of others. Whatever tool you need to run your e-commerce business, there’s probably one (or several) on the market already. That makes it easier than ever now to find apps that can give you exactly the features your e-commerce site needs to thrive.

However, several serious problems are connected to using several third-party tools. Namely, protecting your customers’ data when it’s spread among many different applications, ensuring compliance with privacy regulations, and preventing cyber threats and privacy issues.

Avoiding e-commerce security threats is especially important, as a data breach or non-compliance lawsuit can turn most customers away from your store, which might have long-lasting consequences.

So how can you ensure that your consumers’ data is safe while using those applications? Read on – we’ll show you how you can use those tools effectively without risking the security of your data.

What are third-party applications?

Third-party tools are various applications created by external companies that store owners can use to handle some of the tasks related to running e-commerce sites faster and more efficiently. And with how easy they are now to find and install, the popularity of third-party e-commerce applications has skyrocketed.

The main reason why we are using those? Simply – they save a lot of the time and energy we would have to spend to do a task manually. For example, thanks to those apps, your team no longer has to send store newsletters, track performance metrics, or post social media updates manually. Instead, third-party apps can do those tasks for us – in many cases, much better than we could.

Take our Luigi’s Box, for example.

To keep bringing visitors to your e-commerce site and enhance their store experience, you need plenty of data. For example, what keywords they use, the products they browse, the articles they read, and what eventually makes them abandon the store. Plus, you also need to keep an eye on the store’s traffic, conversion rates, revenue, lost opportunities, and several other metrics. If you had to track all those metrics manually, you or your team would probably need to spend hours on the daily basis gathering and comparing the metrics.

Meanwhile, Luigi’s Box can collect the data from the store and update it 24/7 without missing a single piece of information. All your team has to do is open the app, and they can see everything they need on the visual dashboard:

• Trending searches
• Conversion rates
• Search issues (such as common typos or niche queries that lead to “No result” pages), etc.

That allows them to instantly find out what their customers expect from them and adjust the store’s functionality or fix issues – such as the suspiciously high number of “no results” searches.

Plus, when the third-party tools handle most of the manual tasks for your team, they have far more time to focus on the store visitors. That way, they can spend more time preparing a new marketing campaign or thinking of original ways to bring more customers to their store.

Third-party tools and data security risks

Another massive benefit of third-party tools is how valuable data they can give to e-commerce owners. You no longer have to rely on a “gut feeling” when it comes to promoting your store and keeping your customers happy. Instead, you can use the information coming from the apps to tailor your strategy and store experience to the customers.

The problem is, though, those applications require plenty of data to work to their full potential. And among the data they need, you can very often find personal customer information such as the customer’s full address, purchase history, or credit card details. Giving third-party service access to that data comes with several security and privacy issues, though:

• Cybersecurity risks – As third-party e-commerce tools store so much information inside their databases (often including financial details as well), they are a very tempting target for cybercriminals. Using those tools as entry points is also often far easier for them than attacking the company’s network directly, as the security in many applications is lacking. That’s, unfortunately, why various researchers point to third-party vendors as one of the biggest threats to e-commerce security. According to some, even 60% of all data breaches happen via third-party vendors – mainly because of insufficient security.
• Compliance risks – Using external tools for collecting and storing data also poses compliance risks, especially if those apps have access to sensitive information such as social security numbers or financial details. What’s more, in case of a data incident, your e-commerce store will be charged – not the service provider. So to avoid lawsuits and hefty fines for non-compliance, you should check every application you plan to use for compliance with privacy regulations.
• Reputational risks – Buying in your e-commerce store is a sign that the customers trust you. However, once they learn there has been a data breach at your company, they might leave and never buy anything from you again. In a Ping Identity survey, 81% of respondents said they would definitely stop engaging with a brand online following a data breach. What’s even more worrying is that it might be very difficult for you to bring new customers to your store after a data incident – which will directly affect your revenue.

Why did third-party security become so important in recent years?

Thanks to the spread of cloud services, it is now easier than ever to find and use third-party tools. There’s no need anymore to download programs onto the computer and then go through a lengthy installation process. Instead, most applications can be used immediately as users only need to create an account, and the application is ready to work.

On the one hand, that gives us access to hundreds of useful third-party applications: SEO analytics, spell checkers, image editors and optimizers, and so on. Even better is that we can use those applications on any device we need – we just need a stable connection, and we can access the customer database or create a new social media post.

Unfortunately, many of those applications still need to be improved when it comes to security and privacy protection, making them easy targets for hackers. For example, Veracode research revealed security flaws in 7 out of 10 open-source applications (out of 85,000 applications tested). Add to this that many users use weak or reused passwords for their accounts, and the data might easily fall into the wrong hands, as the passwords can be cracked just with a brute force attack.

Another worrying thing is that business owners and IT admins often don’t know how many applications their employees use. For one of their reports, Microsoft asked IT admins from various companies how many applications they think their company is using. Their answer? 30 or 40 on average. According to Microsoft, the actual number is far higher, though – there might be 1000 separate apps being used in a company!

The reason for this massive difference is that the vast majority of employees (80%) add and use applications without the management or IT staff knowledge. Moreover, they rarely check whether those apps match the company’s security and compliance policies.

In another study, 90% of respondents said they allow third parties to access the company’s internal resources and sensitive data. This one should be especially concerning for business owners, as such behavior increases the risk of a data breach or privacy issues tenfold. Furthermore, by adding a seemingly harmless application to a company’s network, the employees might unwittingly give unauthorized people an easy way to access the internal data – with all the consequences.

How to lower the risk of security threats coming with third-party applications

So do you need to stop or severely limit the number of third-party tools you use in your e-commerce store just to keep your network and customers safe? Not necessarily.

With some simple steps, you can boost your e-commerce security and minimize the impact of cyber threats while using the tools to their full potential. Here are some of the best ways you can use to keep your store’s data away from the wrong hands:

Make a list of all third-party applications used in your company

Drafting a list of the applications used in your company is the first step to improving your store’s security. It will make it clear how many are connected to your system and how many are actually needed.

For example, you might find out that your employees use five different apps for social media management, as there were no guidelines on which app they should use. Once you know this, you can review all those applications and pick one that all your employees should use for social media, to lower the number of apps used in your company.

Checking how many apps your employees use will also help you spot applications that are no longer used but still have access to the company’s data. These apps could be easily used as entry points into your system without you even noticing – so they should be immediately removed. It’s also an excellent practice to mail the provider to ask them to delete all data they might have stored related to your store and users.

Establish third-party application security policies

After you have reviewed all apps used in your company and removed the unnecessary apps, it’s time to create (or update) your security guidelines. One of the points you should add is to describe clearly how your employees should handle the data going to and from third-party applications – especially sensitive data. Another point to include is what will be the new procedure for adding new applications to the network. For example, all new applications employees want to use should be first sent to IT admins for review and approval.

A good idea is also to outline how the employees can access the data while working on their personal devices. It’s especially essential if they use their home or local cafe’s internet connection on the daily basis since that might increase the risk of privacy issues and breaches – so they should be trained on how to secure the internet connection.

The policies are also a great way to educate your employees about the most common cyber threats (like phishing attacks) and how they should behave if they notice a security breach or privacy issue. This way, you can make them more careful while working and ensure that they will know how to react (and who to alert) in case of any issues.

Enforce strict password policies

Using short and easy-to-guess passwords or reusing the same password for multiple apps is dangerous enough for private apps. Meanwhile, that should be unacceptable for business apps, but it still happens way too often.

NordPass research found out that employees working for Fortune 500 companies have been using passwords that could be hacked in less than a second, just with a brute-force attack. With such a weak password as “password” securing the applications with their customers’ data, campaign plans, or store’s financial details, the risk that the data might fall into the wrong hands grows several times over.

That’s why you need to ensure your employees are using strong passwords for each application they are using and that they don’t use the same password for a few applications. One of the best ways to do that is to implement password management software that automatically generates strong, unique passwords that are very difficult to crack, even with brute-force software.

Plus, as the manager can store all passwords in a database, the employees will only need to remember one password, or they will use it to log in to the manager. The great idea is to pick a password manager that supports multi-factor authentication, to protect the database and passwords further inside.

Set permissions on who can access what type of data

It might be surprising to learn, but employees, not third parties, actually cause the majority of data incidents. According to a study by CybSafe, human error, whether intentional or unintentional, was the main reason behind 90% of data breaches in 2019. The breaches might happen especially often when there are no regulations on which employees can access sensitive or critical data – and so everyone can access all resources.

You can significantly reduce the risk of this happening, though, by setting strict permissions on who can access what data and limiting access to the most sensitive files only to employees who need it for work through the admin panel. The permission settings can also be changed from your admin panel whenever you need, so you can, for example, use those to temporarily grant privileged access to some employees and then remove those permissions later.

The security can be further improved by adding two-factor authentication for access to especially sensitive resources. Then, in case your employee’s credentials will somehow get compromised (for example, through a phishing attack or brute-force attack), the extra verification step should stop unauthorized users from accessing the resources.

Keep the tools regularly updated

Lastly, ensure that all applications your employees use are regularly updated – especially those on their remote devices. While it might sometimes feel tedious to keep an eye on the updates for all the applications your team uses, regular software updates are essential to your digital safety and data security.

Older versions of the applications might have code vulnerabilities, privacy issues, or other security faults that cybercriminals can easily exploit. What’s more, the older versions might be prone to crashing or malfunctioning, which also puts your data at risk. By regularly updating all the applications your team uses, you can prevent all those issues and gain access to the latest tools and features.

Moreover, most applications can be set up to automatically update themselves once a new version is available just by allowing this option in the admin panel. That way, you don’t have to worry about checking for daily updates and then updating the apps to ensure you are using the latest, safest version of an app.

Conclusion

How much time and energy would we be wasting on a daily basis without third-party tools? Probably far too much. Now though, those tools can take over most mundane tasks like gathering analytics or posting on social media, giving e-commerce brands far more time to focus on their store visitors and customers. What’s more, the data from those tools are invaluable when it comes to boosting shoppers’ store experience and engagement.

However, those apps can also quickly become a significant e-commerce security threat if you and your team aren’t careful enough while searching for new applications to add to your store. For example, some of the applications might not comply with your security or privacy policies – or might have serious security flaws that can give hackers easy access to your data.

Once you find the right ones, though, we bet you won’t imagine running your business without those anymore – maybe Luigi’s Box could be one of those?

Frequently asked questions