Many businesses are attempting to acquire other companies or outsource additional services to achieve a competitive edge. To determine the level of risk that vendors pose as enterprises grow their vendor base, there is an urgent need for Third-Party Risk Management (TPRM) and thorough cybersecurity measures.
Even though organizations evaluate and manage risk at many levels, third-party risk and a shortage of effective cybersecurity measures pose the biggest threats to business resilience. Critical systems of large corporations have gone offline due to breaches and service outages related to these risk categories.
Two major issues currently challenge long-term viability: third-party risk and cybersecurity. For a complete picture of their risk profile, businesses must be able to address each of these risk vectors separately. Addressing the overlap between these risk areas necessitates a cross-functional process to better secure the business and improve workflow efficiency.
System and data security depend on ensuring that the vendor’s cybersecurity policies align with the standards of the company. In fact, it is just as significant as the company’s stability or the quality of its product and service delivery.
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Dealing with Cybersecurity with Third Parties
A cross-functional approach to cybersecurity and TPRM avoids duplication of effort and provides the company, the partners, and the vendors with a deeper understanding of enterprise risk.
Here are some actions businesses can consider to strengthen their TPRM initiatives:
Bridging the Gap Between Cybersecurity and TRPM
For enterprises to better understand and manage regulatory requirements, internal policies, and processes, integration of TRPM and cybersecurity is crucial. The company should be aware that cybersecurity objectives identify the regulatory requirements and safeguards that vendors are expected to adhere to in TPRM.
The company must be aware of the level of access the third party has to its infrastructure, data, and systems. Additionally, they must make an effort to ensure that the necessary safeguards and controls are in place to protect those entry points and systems.
Carry Out Thorough Due Diligence
Organizations can start the due diligence process for both existing and new vendors once they have built a strong internal foundation for cybersecurity policies and metrics. To determine the residual and inherent cybersecurity risk of a vendor, TPRM teams should gather all relevant data, including the vendor’s incident history and outlook for the future.
Prospective vendors should be stratified according to the level of risk they pose to the company before being chosen and on boarded, and only if their cybersecurity practises are in line with the company’s policies.
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Continuous Monitoring is Crucial
Point-in-time evaluations fall short of understanding a vendor’s dynamic risk profile. In order to gain visibility into changes in the cybersecurity status and controls of the vendor population, it is crucial to carry out routine security assessments. Cybersecurity ratings performed during initial due diligence can offer an in-depth score of the vendor’s security, guiding the schedule for assessments. It is crucial to determine the scope and frequency of an evaluation based on the overall risk rating of the vendor at an annual or biannual triennial time frame.
Businesses that understand and employ integrated TPRM and cybersecurity systems have a holistic view of the risk profile of their vendors are well-prepared for potential security threats and compliance violations, and achieve better business outcomes with reliable, secure vendors.
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