Vendor Risk Management Insights

Part 1: Are Your Vendors Walking the Walk? Confronting Risk Realities: Your Measurements Are Incomplete

Posted by RiskRecon on Nov 18, 2016 11:05:02 AM

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You just received an updated security attestation from your third-party provider, but the hair on your arms stands straight up when news of the latest hack appears on your screen. Your vendors may talk the talk, but you anxiously wonder if they're walking the walk. Checklist compliance is not good enough.  It's time to confront your risk reality. In part one of this two-part blog series, we look at risk measurement.

Today's enterprise IT environment is a complex, growing ecosystem of internal systems and processes integrated with third-party providers and partners that host your sensitive data. You depend on these vendors to successfully operate your business and drive growth. But this interdependent ecosystem has created a large attack surface and set of potential vulnerabilities outside of your direct control.  Moreover, your current IT governance, measurement and control procedures are not adequately designed to measure and manage these third-party risks.

What is the Reality of Your Risk Measurements? 

As you already recognize, it’s up to you to effectively and objectively assess the quality of third-party providers' security.  Vetting new vendors is standard operating procedure. Like most companies, your files are stuffed with the typical partner attestations, collected questionnaires, security documentation and information security certifications that are intended to reflect a company's security effectiveness. For the highest risk vendors, you may even conduct on-site assessments.

Do these security attestations provide the transparency and accountability necessary to ensure your risk interests are properly protected?

Probably not - for the same reasons that we don’t ask students to grade their own report cards, or give employees raises based solely on self-assessments.  It’s hard for vendors to be objective about their own security performance and both parties are eager to complete contracts and achieve business objectives. Whether due to blind spots from shadow IT, poor adherence to their own documented practices, or over-reliance on checklist compliance measures, vendor attestation is not sufficient.  Why settle only for point-in-time vendor self-assessments when there's so much at stake?

Assessing your vendor risk reality requires objective, frequent measurements to compliment and verify the vendor survey and attestation results. With objective measurements you can more easily: 

  • Make it easy to see if your vendors’ security performance is getting better or worse. Quantitative scores are clear indicators of good, better and best performance.
  • Pinpoint potential exposures and root causes for a wide range of security criteria. Verifiable, objective data allows you to develop trust and discuss specific areas for further investigation.
  • Benchmark your vendors against industry best practices while tracking historical trends for your overall portfolio and each individual provider.

Obtaining assessments of any organization's security practices quickly enables you to measure and control third party risk by confirming that vendors are adhering to their own documented practices.

Measurement is a critical component of your risk management practices. Accurate and verifiable scores allow you to establish a baseline and document progress, ensuring more comprehensive third-party risk management to support your business objectives.

RiskRecon’s SaaS solution enables organizations to bring greater transparency and accountability to their risk management programs by providing actionable, objective and continuous information on the security posture of their vendors. We do the heavy lifting, providing you actionable, detailed security analysis of each partner in your portfolio, all with push-button ease. Clients trust us to measure security program quality, improve productivity, and ensure accountability among all stakeholders.

Ready to confirm your vendors walk their talk? Contact us today! Or to read part two on Confronting Risk Reality, click here.

Topics: risk exposures, risk transparency, 3rd party risk management, vendor ecosystems, security attestation, risk measurements