4 Reasons You Should Perform a Third-Party Cyber Risk Assessment
What do Instagram, Marriot and General Electric have in common? All three experienced third-party vendor data breaches in 2020. It’s pretty much impossible to find a company today that is not reliant on third-party vendors for products or services. Vendors offer organizations the ability to reduce costs and improve efficiency. Unfortunately, the same vendors may also carry risk for these organizations. The good news is that an end-to-end third-party security management platform such as Panorays can quickly, easily and thoroughly assess vendor cyber risk to your organization.
According to a recent Deloitte survey, while organizations faced challenges managing third-party risk prior to COVID-19, the pandemic has shown just how ill-prepared organizations really were for a disruption of this magnitude. Now more than ever, performing third-party cyber risk assessments is paramount.
Here are four reasons why you should be performing third-party risk assessments.
1. Get to know your vendors’ cybersecurity.
When you give vendors access to your systems, you are providing additional avenues for cybercriminals to find a way into your network. Therefore, you want to be sure that your vendors are taking cybersecurity as seriously as you are. Cyber risk assessments will help ascertain what security controls are currently in place, as well as how resilient they are should an attack occur. It is imperative to assess current vendors as well as new vendors that you’re looking to onboard.
2. Protect your business’ financial health.
To safeguard your business, you must be able to identify and anticipate risks and disasters before they happen. This applies not only to your own organization, but also to your vendors. If one of your vendors, especially a key vendor, is the victim of a security breach, it can have devastating and far-reaching effects on your business. The time and financial investment spent on protecting your assets is a worthwhile investment. The bottom line is that it is more economical to be proactive than to contend with the financial aftermath of a security breach.
3. Comply with requirements.
Globalization, along with the rise of regulations such as GDPR and CCPA, means organizations are tasked with examining their vendors’ adherence to these regulations. Marriot’s failure to do their due diligence during the acquisition of Starwood Hotels in 2016 made headlines worldwide. The hotel chain was fined over $120 million as a result of violating GDPR when a breach was discovered two years after the acquisition. Similarly, industry regulations such as NYDFS, PCI-DSS and HIPAA also include compulsory risk assessments as part of the compliance process.
4. Protect your company’s reputation.
Failure to adequately assess your vendors’ risk exposes you to reputational risks that could hurt your organization. Besides the obvious physical damage that a breach causes, the reputation of your company is at stake. Whether customers hear from you or from the headlines that their private information has been compromised, customer confidence is reduced and that loss may be irrevocable.
Clearly, performing a risk assessment is an integral step in evaluating the security posture of your vendors. But it’s not the only step. It is simply a snapshot of your vendors’ current security practices, meant to help you understand your vendors’ weaknesses. Next, you need to create a third-party security management program to manage the vendor risks. This takes time and effort, especially when working with numerous vendors.
Panorays helps expedite your third-party security management program through its automated platform. It is the only platform providing a rapid supplier Cyber Risk Rating that combines automated security questionnaire results with attack surface evaluations while also considering business context. Additionally, the platform ensures your vendors’ compliance to regulations and standards by continuously monitoring any security changes with your vendor.
Are you interested in a security risk assessment, or are you looking to learn more about how our third-party security management platform can help you? Contact us today for a free consultation, or sign up for a free demo today.