What is data minimization and why is it important in vendor data handling?

• A. Collecting more data than needed to maximize analytics.
• B. Deleting data before processing begins.
• C. Collecting and processing only data necessary for the purpose; reduces exposure and risk.
• D. Sharing data with all vendors to increase transparency.

Answer: (C)

Data minimization is the practice of collecting and processing only the data necessary to achieve a specific purpose. In vendor data handling, it means limiting what you collect, keep, and share with third parties, and only for as long as needed. This reduces exposure and risk because there is less data that could be misused or breached, and it helps meet privacy and regulatory requirements by enforcing purpose limitation and data retention controls. The other options would either increase risk or hinder operations: collecting more data than needed expands exposure; deleting data before processing defeats the purpose; sharing with all vendors unnecessarily broadens data circulation.