Risk Management For Third Party Vendors

Today, third parties are providing more and more services to business enterprises, and many find themselves reliant upon third parties even for various critical services.  Whether it’s due to cost-controlling measures, or the desire to improve speed to market, businesses of today seem to have a heavy reliance on the outsourcing of technologies and services.  And unfortunately, many have a false sense of security when it comes to the cyber matters that these third-party relationships create.  However, a business’s cybersecurity risks are not minimized by using third-party vendors, and these relationships actually create new layers of risk. If a third party gets hacked, it can be an easy back door into the network, and the consequences can be devastating.

In order to manage the risk of these third-party relationships and the responsibilities created by them, it is critical to have a well-thought out risk management program that considers all areas of third-party risk.  Relationships with vendors, customers, business partners, and others must be considered and addressed.  And although it is impossible to totally eliminate third-party risks, they can definitely be contained through aggressive and proactive planning. 

Here are some things to consider:

Internal Safeguards are very important because protection begins from within.  Having a multi-layer strategy that covers the whole enterprise is critical, and everything must be considered, including mobile devices, all applications and data, and all end-points. This in and off itself will eliminate some third-party risks.

Have a Comprehensive Data Security policy that includes vendor relationships for all employees to follow, and make sure they comply with every aspect of it

Have a Comprehensive Employee Cyber Education Training Program, because employees are the weakest security link in any business.  For instance, the employees must understand the importance of not releasing security credentials because that is a top way for hackers to get into a network. Employees must understand the security risks of dealing with third-party vendors.

Perform a Third-Party Vendor Assessment for every vendor, and constantly remember that even if a business partner is trusted, they can pose a security threat if they don’t do a good job from their end on cybersecurity issues.  Additionally, conduct regular, ongoing reviews of each vendor’s current security practices.

Have clauses in all Vendor Contracts that spell out their responsibilities for maintaining proper security protocols.

Make sure all vendors are required to perform Up-To-Date Patching and other protections, and have someone within your organization consistently check to make sure they are following their obligations.

Create a “Service Level Agreement” with the vendors which requires them to comply with your own security policies, and also gives you the right to review their compliance with your policies.

Educate your customers on good Cybersecurity Hygiene. Remember that smart phones and tablets are actually very powerful computers, and users need to protect their devices and data as aggressively as they do their home and office computers.

Remember, if your vendors and other associated third parties do not do a good job with cybersecurity matters, it will not matter how well you personally do from an enterprise standpoint…you still will have serious security holes just waiting to be breached.