How EDI Data is Protected and Why it Matters

How EDI Data Is Protected And Why It Matters

Your Company’s Valuable Information Relies on the Encryption and Authentication of Your EDI Data

Once you’ve implemented an EDI system in your business, you quickly realize your EDI data contains a lot of valuable information about your operations and potentially your customers. Whether you are legally obligated to protect your business data, or you simply want to protect the information that gives you a competitive edge – you need assurance that EDI is a secure communication channel.

Fortunately, EDI is one of the most trusted and widely used communication methods because of how secure it is. However, before we explain some of the security methods used in EDI, we’re going to share why EDI data protection matters.

Why EDI Data Protection is Crucial

Data is one of your company’s biggest assets, if not its biggest asset. Research shows that the average global cost per each stolen record containing confidential or sensitive data is $154 across all industries – and as high as $363 per record in the healthcare industry. When you consider that most data breaches result in a loss of thousands of records, the total cost adds up quickly.

Why Security Is ImportantHowever, the financial impact of stolen data doesn’t always appear immediately. Imagine you run a manufacturing with decades of experience in your industry and all of a sudden one of your competitors discovered how much you pay for raw goods, how your partnerships are structured, and other information about your operation. They could use that information to undermine your partnerships by approach key partners with a better deal. If certain suppliers got ahold of that information, you would lose your leverage in negotiations.

Every industry has scenarios where EDI data theft is problematic. Financial institutions could give up client bank account information, healthcare providers could reveal sensitive information about patients, and government agencies could expose classified materials.

Looming data security threats are a key reason that so many industries rely on EDI to this day because EDI communication is one of the safest methods of electronic communication available. Safe enough to meet HIPAA standards of the healthcare industry and to satisfy the security needs of government agencies.

How EDI Data is Protected

There are a variety of ways to protect EDI data depending on which EDI protocols you use. All EDI protocols are secure, but some protocols use more security measures than others. You can learn more about the different EDI protocols here.

1 Username and Password Protection

A common mistake organizations make is sharing the same username and password combination for all EDI users within the organization. For one thing, not every employee needs access to all of your EDI data in the first place. Another reason is that if one username gets compromised, you only have to worry about the information they had access to.

As much as we want to trust our employees, creating separate usernames is a fundamental security best practice.

2 Cryptography

Cryptography is the process of encrypting data by transforming the original text into cipher text during transmission. Once the receiving party receives the transmission, it is decrypted from ciphertext back to the original text.

With EDI transactions, only the receiving party can decrypt the cipher text, ensuring that no outside parties have access to the original data if they were somehow able to obtain the ciphertext.

3 User Authentication

User authentication is the use of digital certificates that verify the identity of the sending and receiving parties in an EDI transaction. This ensures that EDI data exchanged between you and your trading partners are both authentic and accurate.

Digital certificates are registered on your VAN, preventing your EDI platform from receiving transactions from companies not registered to exchange EDI data with you.

4 Digital Signatures

A digital signature is similar to a digital certificate, except it provides accurate confirmation that you have received an EDI transaction. Combined with digital certificates, digital signatures create nonrepudiation – verifiable proof of the EDI transaction’s validity.

In other words, one party legally can’t deny that a message was sent or received, nor can they deny the validity of the specific data within the message.

At BOLD VAN, EDI data security is a top priority, and we implement the highest security measures possible in our VAN. The best part is that once you have your EDI system implemented, most of the security measures are completely automated, so you have less risk of security breaches due to human error.

Learn more about outsourcing EDI to BOLD VAN.

Recommended Posts