5 Critical Elements Most Third-Party Risk Assessments Miss

Third-party risk assessments are, in theory, designed to help organizations identify risk. But in practice, many fall short. No matter how many shared spreadsheets you issue to your vendors, or how carefully crafted your bespoke assessment is, ​without a scalable way of analyzing the results, your third-party program is likely missing these 5 critical things:

Ongoing visibility into your ecosystem

The threat landscape is constantly changing, and your vendors, just like you, are frequently taking actions to mitigate or remediate risks. But you have limited visibility into the current security posture of third-parties if you are using a static assessment and are likely too overwhelmed keeping up with manual data management to seek out frequent updates.  According to a recent extended enterprise risk study by Deloitte, 94.3% of respondents have low levels of confidence in their ability to manage third-party risk. Without visibility, how can you effectively manage risk? Being able to access current risk assessment data on your vendors, as well as any relevant changes in threat levels, is critical to knowing which third parties pose you the greatest risk and effective risk management.

A 360-degree view of third-party cyber risk

As digital ecosystems continue to evolve, the vendors, partners, contractors and customers that have access to your network can change on any given day. In fact, Bomgar recently reported that, on average, 181 vendors are given access to a company’s network in a week. A shared spreadsheet approach can give you some insight into your third parties security practices, but it is still a limited picture and often only of a single point in time. What it doesn’t give you is a dynamic outside-in/inside-out view of your vendor’s security posture.  A 360-degree view will arm you with insights about both the potential risks you are assuming in your partnership as well as a validated understanding of the controls your third party has in place to prevent threats – so you can make informed decisions about new and existing vendors.

A risk-based approach

Most assessments today were designed as check the box compliance exercises, often at the expense of a truly risk-based approach. A third-party risk assessment should be designed to measure risks and controls across a range of scenarios, while mapping to compliance frameworks and standards. So not only are you aware of the greatest risks to your business, but you’ve also identified your compliance status in doing so.

A prioritized mitigation roadmap

Identifying your riskiest vendors and their security gaps is key to prioritizing the initiatives that protect your sensitive data. Security teams can then tackle the biggest threats first, and work with vendors to address the largest holes in the ecosystem collaboratively. And with dynamic visibility into your vendor’s security status, you’ll have an updated view when specific concerns have been addressed or when new threats arise.

Structured and dynamic data

While third-party risk management is beginning to get more attention, the tools and solutions used to support it have been slower to evolve.  The unstructured format of shared spreadsheets and bespoke assessments often obscure critical information and risk. By leveraging a standardized and structured process for third-party risk assessments, the resulting data is ripe for analytics that enable teams across the organization to rapidly identify risks and generate actionable mitigation insights.

Third-party risk assessments should be valuable resources, not places for risk to hide. If your assessments are not providing you with the proper insights to proactively mitigate the risk posed to your organization, it may be time for a new approach.

 

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