The vendor risk management process is now an essential requirement of all cybersecurity programs. Without it, you're a sitting duck for supply chain attacks and third-party data breaches. In recognition of this, regulatory bodies are increasing their third-party risk compliance requirements and enforcing obedience by threatening heavy financial penalties for non-compliance.
But as the race to shut down third-party risks intensifies on all sides of the attack surface, few are addressing a concerning issue at the core of this frenzy - vendor risk assessments are very frustrating.
It's imperative for stakeholders, third-party vendors, and management teams to recognize and address these frustrations; otherwise, Third-Party Risk Management efforts will be limited by a heavy performance threshold.
The complete list of common vendor risk assessment frustrations is lengthy. To maximize the value of this post and avoid overwhelmment, we’ve refined the list to the top 3 critical frustrations of cybersecurity personnel working on the front lines of Third-Party Risk Management.
Each item in the list is supported by a recommended mitigation strategy to help you refine your risk assessment efficiency.
1. Insufficient Time for Regulatory Compliance Management
Ensuring regulatory compliance is time-consuming. Risk assessments need to be scheduled, compliance gaps need to be identified and filled, remediation efforts need to be confirmed, the list feels never ending.
Because of its dense requirements, it’s difficult to sufficiently address this essential component for TPRM when other components of vendor risk management demand a majority of your time. This is a serious problem because regulatory fines are rising, especially for highly regulated standards like the GDPR, PCI DSS, ISO, and HIPAA.
Some of the factors contributing to insufficient regulatory compliance bandwidth include:
- Inefficient TPRM processes
- Lack of certainty about each vendor’s compliance requirements
- Lack of visibility into the compliance status of each vendor
- inadequate compliance management solutions
- Poor vendor cybersecurity risk prioritization
To solve the problem of insufficient bandwidth, security teams should reassess their metrics to determine the areas of vendor risk management demanding the most attention.
A common area of congestion is the risk assessment process, which could be addressed with Vendor Tiering - the practice of categorizing service providers and new vendors by their degree of potential security posture impact.
Outsourcing third-party risk assessment duties could also streamline your VRM program workflows, releasing sufficient bandwidth for regulatory compliance management.
How UpGuard can help
UpGuard includes a vendor tiering feature, allowing you to categorize your vendors based on levels of the potential impact on your security posture. This classification process could be based on financial, operational, reputational, security, or any other type of risk.
UpGuard’s Vendor Tiering features give you complete control over the classification process. Such a design represents a clear understanding of the key drivers of VRM efficiency. Every organization has a unique risk profile, so it makes sense to allow security teams to decide which risks have a greater weighting than others.
Tiering vendors based on compliance requirements allows you to group vendors that share the same regulatory standards. This will compress the regulatory management lifecycle, enabling you to send compliance assessments at a vendor grouping level rather than an individual vendor level.
2. Delayed Security Questionnaire Responses
The most frustrating vendor risk assessment pain points are those that lay outside of your control. When security questionnaires are sent to vendors, the assessment process is essentially on pause until their results are received. Sadly, not all third-party vendors attend to questionnaires promptly; and the resulting delays increase the potential of supply chain cyberattacks and security breaches.
Some of the factors contributing to delayed questionnaire responses could include:
- Lack of risk assessment automation
- Inefficient information security processes within third-party ecosystems
- Managing security questionnaires with spreadsheets
Thankfully, there are several available solutions to this problem. The first is to specify your expectations of each vendor relationship at the earliest stages of the onboarding process.
Include the expectation of timely questionnaire responses in procurement contracts; vendors will then be bound to this standard after signing.
But a contractual agreement alone will have little effect if you’re still managing risk assessments with spreadsheets. You need the ability to rapidly identify and address delayed responses to confirm contractual agreements are upheld - an operation standard that’s almost impossible to maintain across multiple vendors with spreadsheets.
However, vendor risk management solutions have been specifically designed to address these requirements.
How UpGuard Can Help
The UpGuard platform includes an end-to-end vendor risk assessment management feature to help you address the complete scope of questionnaire management without painful spreadsheets.
Learn how UpGuard helped Schrodinger finally do away with spreadsheets.
Read the case study >
UpGuard includes many features designed to compress the security questionnaire lifecycle, including AIEnhance, which leverages AI technology to help vendors produce clear and comprehensive responses from an input consisting of either a roughly written draft or bullet points.
3. Generic Risk Assessments Failing to Contextualize Unique Risk Profiles
Each third-party vendor has a unique risk profile, and aligning risk assessments to each unique attack surface is difficult. Generic risk assessment designs fail to consider the individual security objectives overlooking third-party risk that could facilitate supply chain attacks.
To generate meaningful insights, risk assessments need to address the following categories of cybersecurity:
- Information security
- Business continuity
- Physical and data center security
- Web application security
- Infrastructure security
Risk assessments must also evaluate a vendor’s exposure to at least the following types of risks:
- Security risks
- Operational Risks
- Financial Risks
- Reputational Risks
For more information about the framework of vendor risk assessment, read this post.
But to achieve a targeted risk assessment design, security professionals need a reliable process for collecting vendor risk information - an effort that most cybersecurity personnel find incredibly frustrating. A combination of Google Forms, spreadsheets, and emails characterize common third-party risk data collection systems, resulting in an inaccurate and fragmented representation of a vendor’s risk profile.
Before risk assessment design can be addressed, a reliable third-party risk data collection mechanism needs to be established. An ideal solution must store vendor risk data in a secure, centralized depository that feeds into all of the components of a vendor risk management program. This will achieve a comprehensive evaluation of each vendor’s baseline of third-party risk to inform the design of a targeted risk management program.
Third-party security teams should also be capable of adjusting risk assessments to specific third-party security objectives. This level of specificity can be achieved by customizing pre-designed risk assessments.
Watch this video to learn how UpGuard addresses common frustrations leading to delayed risk assessment submissions.