TREAT THIRD PARTIES AS EXTENSIONS OF YOUR OWN RISK UNIVERSE

As if managing their own risk profile isn’t challenging enough, organizations must also concern themselves with how every one of their suppliers and vendors addresses risk. That’s right—organizations are responsible for the risk-related action or inaction of everyone in their service and supply-chain network.

With cybercrime increasing exponentially, alongside the current geo-political and financial landscape, organizations should be very concerned about the risks and dangers posed by third parties.

Poor decisions or cost-cutting measures implemented by third parties may create numerous vulnerabilities that hackers can quickly exploit, stealing your customers' or clients' data, personal information, and/or your organization's financial and operational data.

Your business now shares the financial, legal, and reputational sting of this vendor’s security and compliance inadequacies.

In short, third-party risk should be a top-of-mind concern for all businesses today—from global giants to two-person startups. If your business engages supply-chain partners or outsources anything, third-party risk should be on your radar.

Most businesses simply don’t have the capacity to conduct their due diligence on third parties, and it only takes one bad apple in the supply chain to create huge risks. This is where an information security consultancy can provide invaluable support.

Third-party risk is the likelihood that your organization will experience an adverse event (e.g., data breach, operational disruption, reputational damage) when you choose to outsource certain services or use software built by third parties to accomplish specific tasks. Third parties include software vendors, suppliers, staffing agencies, consultants, and contractors.

Relying on third parties for your business’s successful operation is intrinsically risky. After all, you must trust a separate entity over whose business practices and processes you have no control.

There are several reasons why third-party cyber risk management is essential:

Third parties are often the favored vector for cyber-attacks today. Attackers infiltrate supply-chain links, silently infecting their systems and devices, and then use the third party as a “platform” to launch attacks on higher-value targets. In fact, 80% of data breaches now originate with a third party.

Your organization can face huge fines or legal fees. A vendor falling victim to a network hack or natural disaster could cause a system lockdown and temporarily disrupt business operations. Additionally, reputational damage or negative public opinion can stem from reportable security breaches, legal violations, or poor customer interactions.

How can we help you?

Let our Advisory Services experts, as part of our information security consultancy, assess the cybersecurity, regulatory/compliance, financial, operational, reputational, and strategic risks posed by third parties to your organization. We can help you maintain strong governance over your vendors by assisting you to:

• Understand the risks associated with outsourcing various tasks and services to third-party providers.
• Identify your critical vendors while classifying vendors and the assets you want to protect.
• Create a vendor due diligence process for your organization based on your internal vendor risk appetite.
• Define the critical security, privacy, and business continuity controls vendors should have in place before they are permitted to work with your organization.
• Perform a risk assessment on each vendor to determine that the risks they pose to your organization are within an acceptable threshold. Vendors’ risk levels can be assessed by sending them questionnaires and/or using publicly available data sources such as security ratings.
• Mitigate select vendor risks by taking additional steps, such as putting a contract in place in which the vendor details how they will address the risks that your organization is concerned about.
• Monitor and audit vendors on an ongoing basis.
• Ensure that proper risk management procedures are in place during vendor offboarding.

Next step

Contact us to learn more about how Adapt Cybersecurity can help you with third-party cyber risk management (TPCRM) or to arrange a free consultation.