University Vendor Management: Advanced Risk Assessment Techniques

Like most high-performing organizations, higher education institutions often utilize third-party vendors to outsource key services, such as data management and research initiatives. This reliance on third-party vendors can lead to various risks, including data privacy vulnerabilities, compliance issues, and operational disruptions. Therefore, universities must implement advanced vendor management processes to mitigate these risks.

Successful vendor risk management frameworks include robust risk assessment techniques to safeguard sensitive data, ensure business continuity, and maintain regulatory compliance. In this blog, we’ll explore advanced risk assessment techniques tailored specifically to help universities minimize vendor risk across their institution.

Automate your organization’s risk assessment process using UpGuard Vendor Risk >

Vendor risk in higher education

Higher education institutions face vendor risk when dealing with third-party vendors for services ranging from cloud-based data storage to online learning platforms. Institutions must identify, assess, and manage these risks by implementing mitigation strategies to ensure system safety.

Types of vendor risk present in higher education include:

  • Data security and privacy risks: Higher education institutions face significant cybersecurity risks due to the vast amounts of sensitive data they handle, including student records, research data, and financial information, which could be compromised in the event of a breach or other security incidents.
  • Compliance risks: Third-party vendors who handle specific types of data must comply with various regulations (examples include GDPR, HIPAA, and FERPA), and non-compliance with these regulations can lead to legal issues and financial penalties for a university.
  • Third-party access risks: Third-party vendors who require access to a university’s networks and systems can introduce vulnerabilities if not appropriately secured—creating new vectors for cyber attacks.
  • Reputational risks: Association with vendors that engage in unethical practices, suffer data breaches, or are otherwise compromised can negatively impact the university's reputation.
  • Contractual and legal risks: Poorly written contracts can leave universities vulnerable to non-performance, liability, and conflicts of interest.

Third-party risk in higher education poses a huge hurdle to stable day-to-day university operations. To resolve these risks, consider implementing advanced third-party risk techniques that target areas where third-party risk is strongest.

Learn how to create a vendor risk assessment matrix >

Advanced risk assessment techniques for higher education

Third-party vendor risk assessments for universities have evolved to pinpoint specific issues across vendors and vendor risks. Beyond basic risk evaluation, these advanced assessment techniques integrate strategies to identify vulnerabilities proactively, inform stakeholder decision-making, assess the impact of operational risks, and more.

The following categories of risk management processes cover areas across cybersecurity, compliance, and vendor management. Each section below provides examples of advanced risk assessment techniques higher education institutions can implement to improve their current vendor risk management process.

The best way to implement these techniques is by using a comprehensive third-party risk management tool, like UpGuard Vendor Risk, to automate many risk assessment techniques across your entire vendor ecosystem.

Explore how UpGuard Vendor Risk automates third-party risk assessments >

Enhanced due diligence processes

Due diligence involves investigating and evaluating a third-party vendor’s business practices, financial stability, legal compliance, and potential risks before entering into a business agreement or contract. This risk assessment technique is crucial to understanding a new vendor’s risk landscape before making any commitments.

For higher education institutions, enhanced due diligence processes during procurement and onboarding help institutions avoid potential data breaches, legal liabilities, and reputational damage. Additionally, due diligence ensures that vendors align with the university's ethical standards and operational requirements. Examples of enhanced due diligence processes for universities include:

  • Detailed background checks: Conduct a comprehensive background check during vendor selection, with a specific emphasis on cybersecurity history, financial stability, and organizational reputation.
  • Supply chain analysis: Map out the vendor's supply chain to identify any potential weak links or dependencies that could pose a risk to the university.
  • Duplicative vendor identification: Because universities have a vast array of existing vendors, identify whether new potential vendors duplicate services provided by an existing contract.

Advanced vendor risk profiling

With vendor risk profiling, you evaluate and classify vendors based on the type and level of risk they pose to your organization. This process considers various factors, such as financial stability, cybersecurity measures, compliance with legal regulations, and operational reliability. Risk profiling helps organizations prioritize monitoring and management efforts by focusing resources on high-risk vendors more often than low-risk ones.

Vendor risk profiling allows higher education institutions to tailor their risk mitigation strategies for high-risk vendors. Advanced vendor risk profiling extends beyond basic evaluations to consider various risk factors, including cybersecurity threats, regulatory compliance, financial health, and vendor operational stability. Strategies can include:

  • Sector-specific analysis: Evaluate vendors based on the specific risks associated with their industry sector. For example, evaluate cybersecurity risks posed by any cloud-based software-as-a-service (SaaS) platform a university might use.
  • Geographical risk assessment: Consider geopolitical risks, data sovereignty issues, and regional cybersecurity regulations affecting specific vendors. Universities in specific regions may have additional regulatory requirements based on local judicial systems.

Related: How to implement a vendor risk assessment process.

Enhanced access control measures

Enhanced access control measures include security controls and technologies that regulate and monitor access to sensitive information and physical spaces. These measures include multi-factor authentication, role-based access permissions, biometric verification, and access log notifications to prevent unauthorized access. Consider implementing on-site access control if third-party vendors physically access your organization’s site.

Access control measures in a higher education environment focus on preventing unauthorized access to sensitive information. This is particularly important to maintain compliance with data protection laws like FERPA, GDPR, and HIPAA and prevent data breaches, which are becoming increasingly common across higher education. In 2023, the University of Michigan suffered a cyberattack that allowed hackers unauthorized access to data servers, stealing the personal data of over 230,000 individuals. Enhanced access control measures include:

In-depth technical assessments

To evaluate a service provider’s technological infrastructure, organizations utilize technical assessments that identify potential vulnerabilities, security flaws, and areas for improvement. These assessments include rigorous testing techniques, like penetration testing and security audits, to analyze current technical safeguards' effectiveness.

Due to the enhanced cybersecurity risk in higher education and the increase in remote and hybrid learning environments, universities should employ in-depth technical assessments to evaluate their vendors’ technical safeguards. Examples of in-depth technical assessments include:

  • Automated vulnerability scanning: Regularly scan vendor systems and software for vulnerabilities in the public attack surface using automated tools like UpGuard Vendor Risk.
  • Secure configuration audits: Ensure vendors adhere to secure configuration baselines for their hardware and software.
  • Compliance standards: Incorporate compliance-based controls into the technical assessment.

Dynamic monitoring and analytics

Dynamic monitoring continuously analyzes a vendor’s data and systems in real time. This approach helps to identify and assess potential risks, anomalies, and trends. These insights can be used to manage and mitigate risks proactively, enhancing an organization's ability to avoid disruptions due to third-party relationships.

In higher education, dynamic monitoring immediately identifies anomalies, potential security breaches, and non-compliance issues. Finding these issues quickly can help prevent the loss of sensitive data, such as student information and research data frequently shared with external parties. These analytics can also be tracked to determine trends in vendor performance and offer predictive insights during a vendor’s lifecycle. Examples of dynamic monitoring and analytics include:

Contractual and legal safeguards

Establishing clear, legally binding vendor agreements is one of the most foundational ways to minimize third-party risk. These should include specific clauses on data security, confidentiality, compliance with relevant regulations, and each vendor's expectations, service level agreements, obligations, and liabilities.

Higher education institutions should focus specifically on compliance with laws such as FERPA and HIPAA for any vendor who handles sensitive student information, including student educational records for FERPA and campus health records for HIPAA. Every vendor contract should include protocols for incident reporting and response to ensure swift action in the event of a breach or other attack. Provide an additional layer of safety by including regular audits and the right to terminate agreements in the event of non-compliance. Additional contractual and legal safeguards include:

  • Incident response clauses: Define any specific terms regarding the vendor's responsibilities in the event of a data breach or security incident.
  • Data handling and privacy agreements: Clearly outline how data should be handled, stored, and protected, adhering to relevant data protection laws.

Comprehensive compliance assessments

Compliance assessments that review a vendor's policies, procedures, data handling practices, and security measures ensure alignment with relevant compliance requirements. The assessment process also includes regular audits and monitoring to verify ongoing compliance and to identify any changes in the vendor's practices that might introduce new risks.

Compliance assessments are crucial to minimize third-party risk in higher education, particularly as an environment with stringent and multifaceted regulatory requirements. By conducting thorough evaluations, universities can ensure that their vendors comply with relevant laws and standards, such as FERPA, GDPR, HIPAA, and industry-specific cybersecurity regulations—and the institution's internal policies and ethical guidelines. Examples of comprehensive compliance assessments include:

  • Regulatory compliance audits: Review vendors for compliance with industry standards like ISO 27001, SOC 2, HIPAA, GDPR, and others on a regular basis, such as in an annual audit.
  • Certification verification: Verify and monitor the validity of any security certifications the vendor claims.

Advanced cybersecurity frameworks

Cybersecurity frameworks provide a structured approach to managing and reducing cybersecurity risks, especially those associated with external vendors who may have access to sensitive data and institutional systems. Frameworks include data encryption policies, secure access controls, regular vulnerability assessments, and incident response strategies. Additionally, these frameworks often incorporate the latest recommended practices and are adaptable to evolving cyber threats, ensuring that third-party vendors are equipped to defend their attack surface against sophisticated cyber attacks.

For higher education institutions, where protecting student information, research data, and intellectual property is of utmost importance, a comprehensive cybersecurity strategy that extends to vendor relationships is vital. A robust cybersecurity framework safeguards against data breaches and cyber threats, reinforcing the institution's reputation as a secure and trustworthy environment for education and research. Cybersecurity frameworks include:

  • NIST Cybersecurity Framework: Use the NIST framework to assess and improve the vendor's cybersecurity practices.
  • ISO 27001: Evaluate the vendor's alignment with the ISO 27001 standard for information security management.
  • SIG Lite: Understand your vendor’s internal information security controls by mapping them to the SIG Lite framework.

Streamline Your Vendor Risk Management with UpGuard

Risk assessments and third-party risk management can be an overwhelming challenge for organizations. UpGuard provides a simple and comprehensive way to track your vendor risk management program through our TPRM solution, Vendor Risk.

Vendor Risk is our all-in-one TPRM platform, empowering you to assess your organization’s vendor risk management ecosystem. With Vendor Risk, you can automate your third-party risk assessment workflows and get real-time notifications about your vendors’ security in one centralized dashboard. Additional Vendor Risk features include:

  • Security questionnaires: Automate security questionnaires with workflows to gain deeper insights into your vendors’ security using templates (NIST, GDPR, HIPAA, and more) and custom questionnaires for your specific needs.
  • Security ratings: Instantly understand your vendors' security posture with our metric-driven, objective, and dynamic security ratings.
  • Vendor risk assessment processes: Let us guide you each step of the way with streamlined workflows that encompass gathering evidence, assessing risks, and requesting remediation.
  • Monitoring vendor risk: Track your vendors and view details to understand the risks impacting a vendor’s security posture with our continuous monitoring features.
  • Reporting and insights: UpGuard’s report templates provide tailor-made reports for different stakeholders.

Ready to see
UpGuard in action?