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Efficient Vendor Risk Management: Tips and Strategies

by FeHa International Consulting
July 19, 2023

If you feel overwhelmed reviewing numerous vendors, don’t give up. We have some tips to simplify your job and help you work smarter, not harder. In this article, we will share our advice on how to effectively review all of your vendors in less time.

On one hand, you understand the importance of regularly reviewing vendors. You know the sort of fact that 98% of organizations have been exposed to third-party breaches in the past two years. Additionally, attacks on just 63 vendors caused almost 300 data breaches across impacted companies, showing a ratio of approximately 1 to 5!

On the other hand, the ratio of vendors to vendor risk officers in your company may be high. Your company might have hundreds or even thousands of vendors, while the vendor risk management team is small. This raises the question of how you can manage to review all of them on a frequent basis.

You might have an idea of reducing the number of vendors being reviewed. However, this is not a good idea considering that authorities now emphasize digital operational resilience by requiring firms to evaluate their relationships with third parties and report any issues.

Fortunately, your organization may have employed some kind of automated software to assist you with all the reviewing process. (If they haven’t, ask them for one.) Black Kite, Security Scorecard, Upguard, and Bitsight are examples of that type of software. They provide automated monitoring platforms. You just need to upload questionnaires from vendors, then the software will run and tell you how your vendors perform. This of course saves you tremendous working time

Yet you are still responsible for monitoring thousands of organizations. Just like finding a needle in a haystack, it’s tricky to identify a high-risk element among hundreds of parameters for every organization you are responsible with.   

On the platform, you get notifications when compliance scores decrease for certain vendors; this prompts you to follow up on those cases. However, please note that this can be a false positive. Perhaps the problem does exist but it does not pose any risk to your company. For example, the software finds a bug on a vendor’s website. The software cannot tell you that the bug is on one of the website elements which has nothing to do with your company’s operation. 

Therefore, we suggest you set several important parameters. The following parameters are the ones we believe are critical. You may add more according to your business operations. Our suggestion is to thoroughly examine these significant parameters first and then observe the non-significant ones.

  1. Patch Management.

Check whether vendors update their operating system, software, and applications routinely.

Regular patching addresses the vulnerabilities that could otherwise be used by cybercriminals to gain unauthorized access, execute malicious code, and compromise integrity and confidentiality of your data. In other words, applying patches regularly minimizes the risk of security incidents and data breaches. Hence, it’s vital. 

  1. Network security

Figure out which ports are open on vendors’ networks. Open ports mean potential vulnerabilities if not properly secured. Attackers can scan which ports are open as a potential entry point for their intrusion. Therefore, it’s critical to close unnecessary ports to reduce the attack surface. 

  1. Data Breach Susceptibility and Incident Response

Investigate vendors’ past security incidents. Ask them how many times data breaches have occurred? How much time did they need for the system to be available again after the failure? What were the responses to the incidents?

How they handle an incident determines how big the impact on your organization is. So, it’s a crucial aspect in your third-party risk assessment. 

In conclusion: just like a skilled archer focuses on vital targets rather than scattered arrows to hit the mark accurately; choose what could potentially cause significant losses and concentrate your efforts on those areas. By following these tips, you can streamline the vendor review process and ensure efficient risk management for your organization.

FeHa International Consulting is an international IT GRC, cybersecurity, and privacy management consultant with expertise and experience ranging from startups, small business, up to large corporations.
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