As cybersecurity regulations continue to tighten their grip on vendor security, a greater weight of responsibility is expected to fall on Third-Party Risk Management Programs. So if you're currently struggling to keep up with your vendor security due diligence, your workflow congestion will only worsen without a scalable Vendor Risk Management program.
This post outlines the framework for scalable Vendor Risk Management (VRM) that depresses the impact of third-party data breaches while also supporting business continuity and regulatory expectations.
Common Vendor Risk Management Scaling Challenges
The pathway to a scalable Third-Party Vendor Risk Program (TPRM) begins with an understanding of the typical obstacles impeding this effort. As long as these hindrances remain, a foundation for a scalable VRM program cannot be laid.
To support the mitigation of these growth obstacles, each listed item also includes suggested corrective efforts.
Fear of Reputational Damage
The fear of reputational damage caused by overlooked risk exposures in the supply chain consistently plagues the minds of senior management and stakeholders.
This fear is further amplified by the fact that reputational damage could also result from a third-party breach - a very likely outcome given that 51% of organizations experience a data breach through a compromised third party.
Reputational damage, as devastating as that might be for a business, isn't the only cyber threat following ecosystem compromise. Data breach damage costs are exceptionally high, especially for highly-regulated industries like financial services and healthcare.
These fears combined deter even the consideration of a reformed third-party risk management process, lest the new process expand the potential risks instead of depressing them.
How to Overcome the Fear of Reputational Damage
A reluctance to audit security controls for fear of new processes failing can be overcome in two steps.
Step 1 - Understand that data breaches are common
It is estimated that at least 45% of US companies have experienced a data breach, and one report revealed that 94% of studied organizations suffered an insider data breach in 2021.
These statistics highlight the imperfect nature of data security initiatives across most businesses, a fact that should both dispel any unrealistic expectations of perfection and also spur a desire to improve cybersecurity defenses.
Step 2 - Place your faith in the proven success of information security programs
Vendor risk management solutions with a proven track record of success are highly likely to address the cybersecurity risks deteriorating your security posture rather than exacerbate them.
Learn about the top VRM solution options on the market >
Poor Vendor Attack Surface Visibility
With a myopic outlook of the security vulnerabilities exposing service providers to cyberattacks, it's impossible to securely scale cybersecurity efforts across the third-party attack surface.
How to overcome the problem of limited attack surface visibility
Comprehensive attack surface visibility across both the internal and third-party landscape can be instantly achieved with an attack surface monitoring solution. Such a solution is capable of representing the operational risks and cyber risks associated with existing and new vendors from a single dashboard.
Poor Vendor Risk Assessment Processes
At the heart of an ineffectual and unscalable vendor risk management program is an inefficient third-party risk assessment process.
Many organizations rely on spreadsheets to manually track security questionnaire submissions and vendor performance metrics. When such manual systems are in place, it's impossible to scale at the same rate as competitors that automate their vendor security workflows.
How to overcome the problem of inefficient vendor risk assessment processes
With a third-party risk management platform, it's possible to streamline the complete risk management process throughout the entire vendor lifecycle, from onboarding new vendors to strengthening existing vendor relationships.
Such solutions eliminate the manual processes commonly associated with vendor risk security:
- Risk assessment tracking - In place of the eye-watering process of ensuring accuracy across each individual spreadsheet row, security teams can track the status of all assessments in real-time from a dashboard optimized for an enjoyable user experience.
- Risk assessment design - In place of the arduous process of composing risk assessments by referencing different cybersecurity frameworks, security teams can choose from a library of editable questionnaire templates based on popular risk assessment frameworks such as NIST SP 800-53, ISO 27001, and the GDPR.
- Third-party risk tracking - Specialised vendor risk management solutions empower security teams to focus their remediation efforts on high-risk vendors to support an efficient distribution of response efforts - an outcome facilitated by a feature known as Vendor Tiering.
Learn how to implement an effective VRM workflow >
Insufficient Vendor Accountability
Before a scalable vendor risk management program can be implemented, it's important to establish a sustainable outlook of the cybersecurity responsibility of each vendor. The achievement of a resilient third-party risk management program isn't solely dependent on the efforts of internal security teams. Third-party vendors must also be held accountable for their security issues.
When this symbiotic risk mitigation relationship is achieved, optimized processes start to naturally reshape vendor risk management programs into a more scalable model.
4-Pillar Framework for Scaling your VRM Program
In addressing all of the obstacles to efficient vendor risk management, you will naturally lay the foundation to a more scalable vendor risk management program.
To capitalize on this effort, apply the following 4-step framework for scalable VRM.
1. Identify Vendor Risk Management Skills Deficits
Insufficient bandwidth to address all third-party risk management obligations isn't always a sign that you're ready to scale your cybersecurity efforts. This could also result from a skills deficit.
Audit the skillset of your security team against the standards of proper Vendor Risk Management. Identify cross-training opportunities with experienced staff members if certain skills are not shared across team members.
2. Partner with a Managed Service
A skills deficit is no longer an obstacle to scalability. Vendor Risk Management programs have developed to the point of now offering managed services to organizations wanting to expand their third-party security efforts cost-effectively.
Insufficient human resources is one of the biggest obstacles to scaling VRM efforts.
Such a service isn't intended to necessarily replace existing teams, but to cooperate with their efforts, allowing them to flex into a larger degree of vendor risk management whenever required.
3. Leverage the Benefits of Automation
Implement solutions that replace all manual processes associated with administrative efforts. A process that's most prone to time-consuming manual assignments is vendor questionnaire management. An attack surface monitoring solution can instantly alleviate this manual component, allowing security teams to effortlessly manage risk assessments at scale, without ever needing to load a spreadsheet.
4. Encourage Vendors to take Ownership of their Security Posture
Vendor Risk Management programs can only scale seamlessly if all third-party vendors make a commitment to improving their cybersecurity.
Maintaining such an exemplary attitude of continuous improvement requires more than just the routine risk assessment.
It's most effectively encouraged with a third-party security feature benefiting both an organization and its vendors.
UpGuard's Shared Profile allows vendors to showcase completed questionnaires and related documentation to both existing and prospective partners.
This benefits vendors by reducing time spent responding to risk assessments while also increasing the potential for new partnerships through a demonstration of cybersecurity due diligence.
Organizations also greatly benefit from the reduced administration associated with questionnaire management since vendors are encouraged to proactively demonstrate their cyber resilience.
Watch this video for a preview of UpGuard's scalable VRM workflow.
