• December 14, 2023
  • Catagory Security

Are You Managing Third-Party Risk?

By : Sanjeev Spolia

Even if you’re confident in your cybersecurity strategy, it’s not complete if you’re not managing third-party risk.

Good cybersecurity and robust risk management require that you consider the impact of your partners in your supply chain – the risk posed by these third parties is significant. Security questionnaires and third-party risk analysis services are ineffective, and you run the risk of having a data breach involving these third parties.

The problem with using third-party risk analysis services is what many organizations consider to be security posture indicators don’t fully represent their actual security posture. These services draw from information available on the internet, which don’t have much to do with the services the third party in the supply chain offers.

Security questionnaires tend to be somewhat general, and your supplier is unlikely to have much insight into the risk of the software or cloud services they use. The surveys also tend to focus on security technology and their settings without addressing the risk itself.

When managing third-party risk, it is critical that you evaluate each supplier individually because each one will expose you to a different level of risk depending on the product or service they provide. The most important things to do is assess how likely it is the supplier will become unavailable, and if sensitive information will be compromised as a result.

A more detailed approach is to review specific business processes that might be vulnerable and contribute to risk, which requires people on both sides who understand risk management and how it intersects data security. This review should result in a remediation plan that would be implemented in the wake of any incident involving the supplier.

Privacy legislation such as the EU General Data Protection Regulation (GDPR) can provide some inspiration as to what all parties should have in place to ensure an adequate security posture for any service provided.

It’s important that you establish internal processes and assessment criteria so you can comprehensively assess vendors in your supply chain as part of your risk management process. Security metrics to consider include frequency of security incidents when you compare potential vendors, as well as their response time to patch vulnerabilities.

A managed IT service provider knows all about evaluating third-party risk, so consider tapping into their expertise to help shore up risk management so you can protect against security threats that might emerge from the supply chain.