Ensuring You’re Making Data Driven Third-Party Cyber Risk Decisions

by Michelle Krasniak

When it comes to cybersecurity, there's no room for error. Your organization needs to be constantly vigilant to protect yourself and your customers from the financial and reputational damage that data breaches of any size can cause.

An effective way to reduce your organization's exposure to cyber risk is to carefully vet and monitor the security practices of your third-party service providers. But with the vast number of vendors out there, how can you be sure you're making the best possible decisions about which ones to partner with and how to reduce your risk profile?

Below we'll discuss the importance of using accurate and up-to-date data when making decisions surrounding your third-party cyber risk and the relevant tools you can use to simplify the process.

How Data Can Help Your Team Make Smarter Decisions in Third-Party Risk Management

Assessing your cyber risk profile across your entire third-party ecosystem is essential for understanding your overall cyber risk posture. According to a recent Forrester/CyberGRX survey, 52% of organizations said that improving third-party risk was among one of their top priorities.

However, many organizations still struggle with understanding how much cyber risk they are exposed to throughout their third-party ecosystem. Often, this is due to the lack of visibility into an organization's attack surface and over-reliance on solutions and service providers on cybersecurity measures. To compound this problem, assessing cyber risk is not always straightforward - it can require expertise in cybersecurity and business operations.

When evaluating your third-party cyber risk, it's essential to consider all the potential threats. However, you can't manage what you don't measure, so your team needs accurate and up-to-date information to make better-informed decisions.

The collection and analysis of data relevant to your cyber risk profile allow for better communication with third parties. And by sharing and acting on information discovered about past incidents and current vulnerabilities, both sides can develop a deeper understanding of the risks involved to your brand and customer base.

Why Type of Data Should You Be Looking For?

When evaluating your third-party cyber risk, several important data points will help you make better-informed decisions regarding the improvement of your security posture. Below is a list of critical data elements you should currently be tracking to assist you in this initiative.

Cybersecurity Risks

To assess the cybersecurity risks associated with your third-party ecosystem, you need to understand what threats and vulnerabilities exist. This data can be gathered and monitored through various methods, including vulnerability scanning, penetration testing, and threat intelligence.

Business Risks

An essential element of third-party risk is understanding the business risks associated with each vendor. Some of these risks can include poorly written contracts, recent data breaches, inadequate insurance, and other potentially impactful events. By understanding these risks and aligning them with your own business objectives, you can make more informed decisions about which vendors are a safer choice for your business.

Financial Risks

Another critical data point to consider is the financial risks associated with each vendor. This can include things like a vendor's financial stability, their ability to meet your SLAs, and the cost of their services. By understanding these risks, you can make more informed decisions about which vendors are a better fit for your budget and business objectives while also minimizing the impact of any potential disruptions.

Reputational Risks

Reputational risks are another important consideration when assessing your third-party cyber risk. These risks can include negative publicity, loss of customer trust, and damage to your brand. You need to understand these risks before doing business with any third party, as they can have a significant impact on your bottom line. It can also be helpful to track social media sentiment around your brand and any third-party vendors you work with. Doing so can help you identify any potential reputational risks early on and take steps to mitigate them.

Using the Right Tools to Drive Better Decision Making

Making data-driven decisions about your third-party cyber risk is a critical part of improving your security posture. However, it's important to note that not all data is created equal. To make the best possible decisions, you need to be sure you are using the right tools to collect and analyze the most relevant data points. The good news is, there are various solutions available to organizations to help them achieve this.

Below is a list of some of the available tools and solutions you can use to help you make better data-driven decisions around your cyber risk profile:

Third-Party Cyber Risk Management Platforms

Third-party cyber risk management platforms are cloud-based solutions that give organizations the ability to manage their third-party risk across all of their solutions providers in a single place. This creates a single source of truth for all third-party data and allows for better risk management and mitigation. The main benefit of these platforms is that they provide real-time insights into vendor risk, the latest threats, vulnerabilities, and potential exposures for an organization by using sophisticated data analytics and data visualization.

Cyber Risk Exchanges

Cyber risk exchanges are information exchange platforms that allow companies across multiple industries to share relevant information about their third-party cyber risks with other organizations, feeding valuable insights business leaders need to make better-informed decisions about which vendors to work with. These exchanges also include a variety of threat feeds from leading security providers, as well as tailored insights specific to your organization's risk profile. One thing that's important to note is that not all risk exchanges are created equal. The data must be standardized to allow for the benchmarking and advanced analytics that bring the ecosystem visibility, and cost and time savings. Standardization on the input leads to better customization on the output.

Benchmarking and Dynamic Assessment Tools

Benchmarking and dynamic assessment tools give you the ability to compare your organization's third-party cyber risk posture against your peers and competitors, as well as get real-time insights into any changes in vendor risk. Having this data at your fingertips allows you to identify significant trends and quickly react to them before they negatively impact your business. This proactive approach to third-party cyber risk management is essential for protecting your organization in today's constantly evolving security landscape.

Reputation Management Solutions

Reputation management solutions allow you to monitor your organization's cyber risk profile and quickly identify any potential issues that could impact your business. By monitoring the media, social media, and other online channels for mentions of your company, you can get a pulse on how you're being perceived by the public and take steps to improve your image as necessary. This can be critical when recovering from a data breach or other incident and maintaining a positive reputation in the face of constantly evolving threats.

When it comes to making important decisions concerning your third-party cyber risk, it's important to remember three crucial considerations:

1. Do you have clear visibility of your entire cyber risk profile? Managing each of your partner relationships across multiple platforms can be time-consuming and inefficient. To ensure you're making the right decisions about your cyber risk profile, maintaining a single source of truth for all your agreements and risks assessments is critical.
2. How often do you evaluate compliance across all of your providers or partners? Having a firm grip on your risk profile across all your partners is essential, but if you're not regularly reviewing your current risks in real-time, it's only a matter of time before your business runs into compliance issues.
3. Are your decisions around cybersecurity and compliance risk proactive or reactive? Making efforts better to understand your cyber risk profile across third parties is an essential step for every organization. However, to make better decisions about who you should partner with and how to improve those relationships, you need to right tools, technology, and data to help you plan ahead.

CyberGRX is the first and only global cyber risk exchange that gives organizations a completely comprehensive view of their risk profile while giving them the tools they need to manage it effectively. CyberGRX allows organizations the opportunity to share information about their third-party cyber risks while maintaining full visibility and control over their data. This information can then be used to make more informed decisions about which vendors to work with and how to mitigate your third-party cyber risk across all of your solutions providers.

If you would like to learn more about the CyberGRX platform and how easy it can be to evaluate and act on your own cyber risk profile, book a free demo today.

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