Third-party assurance enables organizations to assess the information security risk and the potential impact on their business operations that is posed by vendors or other third parties within the organization’s supply chain. It also allows the organization to determine whether those vendors align within their risk tolerance.
In today’s globalized business world, more and more companies rely on third parties or outside vendors to conduct some form of business transaction for them and their customers. This opens up all organizations up to an increased risk, making third-party assurance a fundamental to your business’s security functions.
Why Third-Party Assurance is a Necessary Function of Your Information Security Program
With a third-party assurance program, you will reduce risks and minimize disruption to your business.
Through this type of security solution, your company will fully vet the outside firm finding any potential risks areas, including in their cybersecurity, among their service-level agreements with other vendors, in legal compliance or even in their finances. Determining red flags early on in your partnership or before you sign an agreement will pay off in the long run.
Data breaches at third-party vendors are increasing.
Depending on your contract or laws in your area, your company could be held legally and reputationally liable even if your customers’ data is breached at your outside vendor. Considering that, according to PwC’s Global State of Information Security Survey, security breaches attributed to vendors has increased from 20% to 28% in recent years, it would be a good idea to do your due diligence on all potential third-party partners.
A comprehensive risk management process needs to be run with expert-level guidance.
While you likely have a competent IT staff on hand, assessing and monitoring all of your third-party vendors takes a lot of time, and a cybersecurity firm has the expertise and proficiency do to it without disrupting your day-to-day operations. Plus, a cybersecurity expert will have the security, compliance and regulatory knowledge to evaluate and help reduce risks across the board.
Third parties need continual monitoring.
While the upfront risk assessment is important, it’s only half the battle. To ensure your company stays safe from vendor risks, you’ll need continuous monitoring. A cybersecurity firm can easily run that kind of system to alert for any inconsistencies, protecting your company and customers in the long run.
Define and manage expectations of your third-party vendors.
This can be established as part of the auditing and assurance process. By using a security company to run your vendor risk management assessment, it can help create guidelines or expectations addressing security and regulatory requirements for both the client and vendor. It will also ensure your company is not surprised by methodologies, timelines or your third-party’s use of their own third-party in the future.