Most businesses today rely on third-party partners for products, services or expertise that help keep things running and achieve their goals. However, these relationships can be put to the test if a data breach or cybersecurity incident at the vendor’s end turns into a major problem for your business.
That’s why it’s crucial to understand how third-party risks can affect not only your business operations, finances and brand, but also your company’s future. In this blog, we explore the key third-party risks that can make you vulnerable and share best practices for creating a strong third-party risk management strategy.
How Could A Third-Party Compromise Your Security?
Your partners can sometimes expose you to unexpected risks, so understanding where these vulnerabilities come from helps you protect your business.
Here are some of the most common third-party risks that could put your business at risk:
Third-Party Access: Sometimes, you’ll need to give your third-party partners access to your sensitive data or systems. If they experience a data breach, your data could be exposed making your business a victim as well.
Weak Vendor Security: When you partner with a third party, they become part of your supply chain. If their security measures are lacking, your risk grows, especially if they have indirect access to your critical information.
Hidden Technology Risks: A security flaw in third-party software or pre-installed malware in hardware can make your business vulnerable to external threats. Hackers can exploit these weaknesses to launch attacks on your systems.
Data in External Hands: Many businesses today rely on third-party storage providers to handle their data. While this is a smart business decision, it’s important not to overlook the risks. A breach at the provider’s end could also compromise your data.
What are the best practices for managing third-party risk?
Best Practices to Mitigate Third-Party Risks
Vet Your Vendor: Before entering into any contract, thoroughly vet your vendor. Don’t commit without conducting background checks, security assessments, reviewing their track record and evaluating their security policies. Also, ask for certifications and proof of compliance with industry standards.
Define Expectations: Your business can’t afford to take chances. Create a contract that clearly defines your expectations regarding security, responsibilities and liabilities. Include a clause that requires the vendor to maintain specific security standards and obligates them to report any security incidents.
Be Transparent: Your vendor is crucial to your business’s success, so it’s important to maintain open communication about security. Make it a standard practice to share updates on evolving threats and vulnerabilities. Encourage your vendor to be transparent and report any security concerns without delay.
Stay Vigilant: You can’t assess your third-party vendor just once and assume they’ll always remain secure. The threat landscape is constantly changing—what if your vendor isn’t keeping up? Continuously monitor their security by conducting regular security assessments, vulnerability scans and penetration testing.
Brace for the Worst: Things can go wrong, sometimes unexpectedly. Prepare by having a detailed incident response plan that outlines steps to take in the event of a security breach involving third-party vendors. In your plan, clearly define roles, responsibilities and communication protocols. Regularly conduct mock drills to ensure your team is ready to handle any situation.
Build a resilient business
The future of your business depends on how your customers perceive you. Customer trust is difficult to earn and easy to lose. Even if you’ve done everything to protect your customers, one mistake by a third-party vendor can damage your reputation and your customers will hold you accountable.
Don’t let a third-party breach harm your reputation. Take control of your security measures. Download Claritech’s Third-Party Risk Management checklist by clicking here.
To discuss an assessment of your third-party risk management strategy, please book an appointment with Dan here. We’ll help you create a strong defence to protect your business, data, and reputation.
