With so many headlines about data breaches, many caused by 3rd party vendors, reading news about a security compromises is becoming a too frequent event.
Following the trend of breaches taking months to be discovered, some can take almost a year to discover. Even though many compromises are internal, the impact delay is another reason why vendor screening is so important, especially with key third parties. Australian companies can no longer afford to be in the dark about business details that increase risk? Here are five things you should know about vendor screening:
1. 3rd party vendor risk can’t be eliminated
Although vendor screening is a powerful tool for protecting your company’s interests, it is not a cure-all for every threat a third party might pose. Risk can’t be eliminated, only managed. Vendor risk assessments can help maximise that management.
2. The screening process doesn’t have to be so time-consuming and labor-intensive
Executives and risk professionals are hesitant to adopt a comprehensive vendor screening program. Indeed, in years past, assessments consumed much time and energy—resources that organisations simply don’t have. However, an automated solution can greatly simplify the process. After assessments are completed, risk staffs don’t have to waste time tabulating the results because the report gives them everything they need for subsequent analysis and vendor risk management decisions.
3. 3rd party vendor risk scoring can be your best ally
Many vendor screening solutions employ risk scoring to quantify the level of risk a third party presents. This innovative solution can make life much easier for perpetually busy risk employees. Instead of poring through pages of assessment results among dozens of reports, you can eyeball the risk score to get an instant idea of how much risk a vendor carries. A low score might mean you can move on to the next vendor. A high score could indicate more analysis will be necessary. Risk scoring might also use color coding—green for low risk, yellow for medium risk, and red for high risk—to allow you even more streamlined analysis; simply look for red scores and answers to see what areas will need more of your attention.
4. Achieve a completed risk assessment without deploying vendor risk software
If you don’t have the budget or the resources for vendor screening software, or if you staff is so overwhelmed at a certain time of the year that you couldn’t possibly undertake another assessment, on-demand screenings can fill the gaps. The process is easy: Inform the vendor risk management service of the third party that must be assessed, and receive a completed risk report within a couple weeks.
5. Routine 3rd party vendor screening is worth the time, effort, and expense
Nearly half of the major data breaches in 2013 were the fault of a third party. Many of those incidents were tremendously costly—in terms of lost sales, damaged reputations, and disaster control—to the contracting companies that were affected. Due diligence in assessing and managing vendor risk can go a long way in helping protect your company’s interests. After all, a third party might be at fault when a risk becomes a catastrophe, but your company’s bottom line will ultimately be at stake.