The Rising Cost of Non-Compliance: Lessons from Marriott’s $52M Data Breach

Marriott’s recent $52 million data breach settlement is a stark reminder that non-compliance and poor vendor oversight can lead to significant financial losses and reputational damage.

For businesses, especially those managing complex networks of vendors, maintaining compliance with data privacy regulations is a growing challenge. Effective Vendor and Contract Lifecycle Management (VCLM) is no longer optional—it’s essential for mitigating risk.

The Marriott case is a prime example of why organisations need to focus on compliance from the vendor onboarding stage all the way through to contract termination. Without the right safeguards, procurement teams risk financial penalties and the loss of customers’ trust.

Important Lessons Procurement Teams Can Learn from Marriott’s Data Breach

The Marriott breach offers procurement teams valuable lessons about safeguarding sensitive data when managing vendors and contracts:

• Vendor Data Access Visibility: Procurement must maintain clear, centralised records of which vendors can access sensitive customer data, ensuring appropriate security measures are in place.
• Ongoing Cybersecurity Assessments: Relying solely on initial vendor evaluations is a mistake. Continuously monitor vendors’ cybersecurity practices to catch vulnerabilities before they result in a breach.
• Data Protection Clauses in Contracts: Contracts should include specific data protection clauses, such as encryption and breach notification protocols. If these aren’t included or reviews are manually managed, key protections may be missed, increasing exposure to data risks.
• Compliance with Data Protection Regulations: Data privacy regulations like GDPR and CCPA require strict compliance when contracts involve customer data. Manually tracking compliance deadlines and clauses increases the chance of non-compliance, potentially leading to legal action and fines.
• Vendor Offboarding and Data Access Termination: When a vendor contract ends, it’s crucial to ensure that their access to sensitive customer data is fully revoked. Manual processes can overlook this step, leaving data vulnerable to unauthorised use.

Why Manual Vendor and Contract Management is a red flag

Data breaches are no longer just hypothetical risks - they are happening all around us, often through third-party vendors. Companies across every industry are outsourcing more services than ever, relying on external partners to handle everything from payroll processing to customer data management.

With this shift, the need for robust vendor oversight has become a critical part of cyber risk management strategies.

But here’s the challenge: managing vendor risk in a manual, reactive manner is no longer sustainable. Your organisation needs more than just a basic contract in place.  It needs continuous, real-time insight into the security practices of its vendors.

Your business must take a proactive approach to vendor risk management, especially for cybersecurity, so it can act before a vulnerability turns into a full-blown breach.

Building Security Into Vendor Relationships

Effective vendor onboarding starts with capturing the right information from the outset.

By using dynamic smart forms, your business can automate the collection of critical vendor data, ensuring the process is efficient without sacrificing thoroughness. These forms can capture critical security information about a vendor’s certifications, encryption practices, or breach history.

This tailored approach enables procurement teams to conduct comprehensive due diligence from the outset, helping to identify potential risks early and reducing the likelihood of costly issues later on.

Another key element of the onboarding process is the use of customised due diligence questionnaires. These questionnaires allow your business to focus on its specific risk areas, addressing topics like cybersecurity measures and regulatory compliance.

By designing questions that target high-risk areas, your business can ensure its vendors are fully vetted before contracts are signed.

The Importance of Cyber Risk Monitoring

Real-time visibility into your vendors’ cybersecurity can protect your business from the financial penalties experienced by Marriott.

Tools such as MarketIQ allow you to continuously and automatically monitor your vendors’ security practices and receive actionable insights, such as identifying potential vulnerabilities or emerging risks.

Cyber risk monitoring allows you to identify vendors with weak cybersecurity postures, including slow response times to critical security patches or a history of breaches. With this information, you can take proactive steps such as adjusting vendor agreements, requiring additional audits, or enforcing stricter security measures to safeguard customer data.

Automation: The Game Changer for Compliance

Automation further enhances the process by distributing questionnaires, tracking responses, and maintaining an audit trail for future reference, making vendor oversight both proactive and efficient.

Another key element of cyber risk management is ensuring that your vendors meet regulatory requirements. Data protection regulations such as GDPR and CCPA have made it clear that organisations must have strict security measures in place for any entity handling sensitive data.

Implementing automated compliance workflows helps you stay ahead of these regulatory requirements.

They ensure that all vendor contracts deliver the necessary provisions for data security and privacy on time. Automation also removes the human error factor, reducing the risk of non-compliance and ensuring that any changes in vendor compliance status are flagged immediately.

When it comes to protecting sensitive data, there's no room for delays or guesswork.

The Power of a Central Repository

One of the cornerstones of VCLM is having a central repository for all vendor and contract data. This repository is particularly beneficial for procurement teams as it consolidates all vendor-related information into one accessible location, reducing the chance of missed details or oversight.

By centralising this data, procurement teams can more easily track which vendors have access to sensitive customer information, enforce security protocols, and ensure compliance with data protection regulations.

This centralised approach also helps procurement quickly identify vendors that may pose a security risk, allowing for timely intervention before issues escalate.

Proactive Risk Management is the Future

As cyber threats continue to evolve, we know that reactive measures are not enough. At Gatekeeper, we’re focused on empowering your business with the tools and insights it needs to protect sensitive data proactively.

The reality is that data security isn’t just the responsibility of a single department—it’s a company-wide initiative that involves every team, from procurement to legal to compliance.

By embedding security protocols into your vendor relationships and leveraging real-time insights from platforms like MarketIQ, businesses can not only protect themselves from potential data breaches but also build stronger, more resilient vendor partnerships.

Conclusion

Marriott’s costly data breach is a reminder that inadequate vendor and oversight can result in massive financial and reputational damage. For businesses managing sensitive customer data, automated vendor and contract lifecycle management is essential.

By centralising vendor information, automating compliance, integrating cybersecurity monitoring, streamlining due diligence, and providing audit trails, your business can reduce the risk of data breaches, protect customer data, and ensure that its vendors meet stringent security and regulatory standards.

If you're ready to take control of your vendor data and protect your business from data breaches, get in touch today.