A third party security assessment is done to ensure that the potential business relationship is secured. This is especially tricky. Since even those who implement these practices. Still do experience cyber attacks from third parties. In fact, over 90% of them believe that their third party management is protective.
Third-party relations are indeed crucial. Come to think of it. You cannot control your third party’s security system. Moreover, you cannot take control of their processes too. You cannot implement safety practices for them. But, you have to connect with them. Because this means business.
As per the first half of 2019, more than 4 billion records are compromised. And more than half of that is caused by third parties.
This is how third party security assessment comes in. This assessment further protects you from potential risks. Because this can give you a heads up of this specific vendor. You can then further implement restrictions to some access. And you will know at which level you should grant them access.
What are the risks that come from third parties? How can we better employ third party risk assessments?
Most Common Third-Party Risks
Third-party risks can be classified into three.
Operational Risk
This means that a third party connection can disrupt your business operations. For instance, a data breach could stop you from providing your services. Or loss of data happens and you cannot further process your tasks.
Financial and Reputational Risk
It is when an organization pays the fee and fines. This may result in a loss of income. Or even worse, some companies were not resilient enough. That they have fallen into bankruptcy. Plus, the reputation of the company is mostly hit. It might take time to gain more of your client’s trust.
Legal and Regulatory Risk
For instance, your third-party vendor violates, you will be liable too. Thus, third parties have a direct impact on your legal compliance. Violations range from labor, data security, or environmental risks. This is how enough due diligence should really be done in this regard.
In most cases, a third-party incident can result in more than one risk. For example, a data breach happens. Thus, this incident not only affects your finances. But this can also further disrupt your business operations. Moreover, this also hits your reputation as a company.
While it is true that third party risks are inevitable. But there are ways to mitigate them.
Keep Your Data Map Updated
Being organized with your data saves a lot of pain. This well serves as a good foundation for your management.
Have a clear map of who your vendors are. And, what data do they have access to? This shall help you implement appropriate agreements.
Develop A Clear Process
Do not handle vendors on a case to case basis. The tendency is, you may miss some weak links in the process. Thus, you must have a clear framework for the process. This also ensures that each is thoroughly investigated.
Moreover, this will help have a clear objective of your assessment. You know for a certain why you are doing the process.
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