How to manage the cybersecurity risk from 3rd party vendors you work with?

Jun 16, 2022 | Cybersecurity Explained | 0 comments

Organizations are becoming increasingly interconnected with the use of third-parties in the supply chain. Vendors, suppliers, and service providers are a crucial piece of the puzzle and working in tandem with them to reduce and mitigate cybersecurity risks is a must. But where do you begin such a process and why is it important in the first place?

Why is managing cybersecurity risks important?

Cybersecurity threats are all around us every single day. Malicious attackers seek to infiltrate organizations of all sizes in order to gain access to sensitive client data, cause reputational damage, seek ransoms in exchange for not leaking critical information with this causing serious financial losses and so much more. 

These threats are already hard for an organization to deal with on their own. However, it becomes even more challenging with third-parties involved in a business’ supply chain. Whether big or small, third parties must guarantee safeguards for mitigating and reducing cybersecurity risks in order for an effective and productive professional relationship to be created and to build trust between all the parties involved.

How can you mitigate third-party cybersecurity risks?

Third-party vendors are crucial in the business ecosystem. They can help with anything ranging from providing HVAC services to other more highly specialized ones such as data management and storage as well as payments processing. Each of these examples, and so many others, mean that third-party vendors can and do have access to sensitive company and customer data and this exposes the entire organization to cybersecurity threats and risks. There are, however, some ways in which you can address these risks and solidify the relationships with your suppliers and service providers. Here are 10 key steps to follow:

  • Map your data flow

As a starting point, it’s crucial to map your data in both digital and physical formats, from origin and development to its disposal. Appoint data guardians to monitor each step in the process, including at which point of the data process third-parties come to the fore and what role they play.

  • Identify the vendors your organization is using

After mapping your data flow, it will be necessary to identify all the third-party vendors that your organization has contractual relationships with. These can range from small service providers who take care of your office’s heating and cooling to more professional services such as remote data storage and processing and payments processing.

  • Determine their risk potential and risk profiles

Once you have a list of all the third-party vendors that are a part of your organization’s ecosystem, you will want to create a risk profile for each one. These risk profiles can be tiered in terms of low, medium, and high. Each risk tier should be accompanied by selected and pre-determined risk criteria.

  • Ask each vendor to complete a security questionnaire

Further to the above, you will now need to go into more depth about how each third-party vendor handles cybersecurity risks and threats. One of the best ways to do so is to send them a professional questionnaire that assesses how they safeguard data and how and which cybersecurity policies and plans they have implemented to reduce risks. Once you’ve done this, you can determine whether their risk mitigation and management practices are secure or whether they require more input and more stringent safeguards.

  • Develop a security scorecard

After assessing each vendor’s cybersecurity protection efforts, you will want to develop a security scorecard. This scorecard will require some high-risk vendors to undertake immediate corrective actions, whereas medium-risk vendors will need to implement corrective actions within a given time period. Low-risk vendors, on the other hand, will be required to create a mitigation plan over the longer term.

  • Prioritize risks and address them in that order

Once a scorecard is developed, you should prioritize the third-party vendors in terms of the risks they could potentially expose your organization to and then request that the higher- and medium-risk vendors address potential threats and gaps in their cybersecurity protocols as swiftly as possible before proceeding to enter into a contract with them.

  • Create a stress test to determine weak spots

Stress tests are scenarios which are artificially created to simulate a data breach and the third-party vendor’s response efforts to such a breach. Stress tests are an excellent way of determining where the third-party’s weak spots lie and they enable you to communicate effective ways of addressing these weaknesses for the benefit of both organizations before an actual risk occurs.

  • Include data breach requirements in all contracts

The language of the contracts that your organization enters into with each third-party vendor should include a reference to cybersecurity and data breaches. In addition, it should mention who will be responsible for what, what ramifications there are in the event of a data breach, how a breach should be handled, and how responsibility is to be shared.

  • Set risk expectations and requirements with the third-party

In addition to stipulating responsibilities in your contracts, there should also be clear expectations set with the third-party vendor in terms of risk management. These expectations should be clearly set out for the vendor so that they know exactly where they stand and what their responsibilities are in the event of a data breach. 

  • Continuously monitor, strengthen, and streamline

Cybersecurity management is not a once-off process but rather an ongoing endeavour that needs continuous monitoring, evaluation, development, refinement, and streamlining. As a result, this means that your cybersecurity risk mitigation efforts, when viewed in conjunction with third-party vendors, requires ongoing refinement and honing. As cyber threats evolve, so should the response of your organization and those of the third-parties you deal with. 

Final thoughts

Organizations in today’s business landscape operate in increasingly vulnerable worlds. They need to tread the waters of cybersecurity very carefully in order to mitigate, prevent, and address security breaches, which can be costly for any business. The interconnectedness of organizations also means that third-party vendors should offer a series of safeguards for how they mitigate and deal with cybersecurity risks. But the onus lies on the primary organization to ensure that the vendors it works with have clear expectations, follow set protocols within clearly established deadlines, and continuously work to minimize cybersecurity risks and threats. At 3Cyber-Sec, your third-party relationships in terms of cybersecurity can seamlessly be addressed through professional methodologies to mitigate such risks. 

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