When it comes to data security, the third-party risk management has unfortunately received the minimal amount of attention even after being an essential part of the business working.
FREMONT, CA: Technology has come a long way, and along with it came the responsibility of every risk management program to look beyond the edge of their organization to vet the third and fourth-party vendors. The vendors having access to the internal data and supply chain of the company can create potential risks and increase the possibility of breaches. Several disciplines of third-party risk management (TPRM) have evolved into lending a hand in managing the risk exposure of new kind.
Organizations need to attain specialized skills and solutions from different vendors to remain competitive without triggering the risks. Nonetheless, business leaders should make sure that every third party operates consistently with their organization’s compliance standards and security. Efficient third-party risk management can guide companies to select partners wisely as well as mitigate the mediator problems to get an improved incident response.
Along with a few disciplines, some methods can help organizations to evaluate the vulnerabilities while considering a new collaboration and lessening risks:
Perform Third-Party Risk Estimation:
Risk assessment is a significant step in understanding security risks connected with third parties. While outsourcing sensitive data to a probable partner, a company must make sure that they are not shaking hands with a troublesome future. Any third-party paying fees and taxes on behalf of a company are more likely to be on the higher side of risk. Whereas, the one with non-sensitive data processing only tends to be on the other side without any detailed assessment. Furthermore, it is always ideal for carrying out a third-party evaluation on a regular basis during the onboarding period.
Commence Due Diligence:
The particulars of the due diligence course of action entirely rely on the industry and the company, but there are a few techniques that organizations can reach out for smooth running. By performing a credit check, authorities can filter the paid and unpaid invoices of the suppliers, which hold a considerable amount of impact on delivering satisfactory services. Companies need to carefully go through the litigation history of the third-party to check if they have been involved in any data breach or criminal activities. In the digital world, media archives can be of significant help to investigate the potential partner’s negative news. A questionnaire regarding the protection and storage of sensitive data can be informative for the company to find out the abilities of the to-be partners. Third-parties holding low risks can follow due diligence that involves checking the organization. But in cases where the party carries higher risks demands a complete assessment, including the associates and subsidiaries of the company.
A Written Contract:
In any collaboration, a partnership agreement is a binding document that both companies adhere to and resolve possible disputes. The importance of a detailed agreement with each supplier is immense, as a matter of fact; some regulatory standards compel the companies and suppliers to sign a business associate contract. Whenever the supplier processes the sensitive data, companies should outline suitable risk-based data security and privacy obligations as per the agreement and necessities for data integrity. By specifying working hours of the employees, companies can catch-hold of any tampering that takes place in their internal network beyond those specific timings.
Tracking Third-Party Activities:
Organizations need to stay vigilant, even after double-checking the partner’s reliability and a detailed contract; to make sure that the parties stick to their obligations and fulfill them. Mainly, it seems the right time when companies can implement different technologies to monitor user activity. By tracking their footsteps, authorities can spot unauthorized user access to sensitive data. Such technologies can keep a close eye on the activities of the partner and investigate security events efficiently by quick detection.
Companies can suggest that their third-parties implement similar technology to monitor mischievous activities further that goes around the environment. By following these steps, both the company and the third-party can remain safe from breaches and maintain robust security controls. To have someone from the internal space dedicated to monitoring the actions, taking place in the joint ecosystem with timely reviews on the state can ensure that controls are in proper areas. Not having the access and visibility to the IT department can conceal the possibility of any infringe in the long run. It is vital to prepare for a long-term as an undetected breach can cause unimaginable damage to the environment and revenue.
Leveraging a Unified Structure:
The company is always prone to a data breach risk, irrespective of how tough the security strategy it employs. There are a few regulatory standards that carry precise breach notification rules, and following some standards regulations, the accountability for a data breaches can fall on both parties. Even though only one of them was unsuccessful in executing the necessary security standards.
It is for all times crucial to create a quick and efficient incident response plan as well as have service providers that process the company’s sensitive data for long-term. The hired contractors need to have the abilities in detecting deviations from the regular on-going operations across the environment. If any unusual activities occur, the third party should immediately notify the company and provide every detail necessary to reach the scope of the breach. By reaching the center, authorities can find out the loss of sensitive data, if any, the intensity of damage, and the degree to which the risk has been alleviated. Lastly, an appropriate response plan should outline suitable recovery measures and procedures from every episode for further learning.