What Are the Steps to Conduct a Robust Vendor Risk Assessment?

How to Perform a Robust Vendor Risk Assessment

1. Do your Dues

Start your due diligence by collecting information about your vendor’s risk posture on questionnaires and from external sources. Develop assessment criteria unique to your business goals. High-risk vendors should be subject to greater scrutiny than vendors that don’t have access to sensitive company information.

2. Move on to vendor onboarding

If a vendor didn’t meet your risk standards, you can request additional assurances until you are satisfied with the information and practices provided. After a vendor is approved, start the contracting process. This is a written agreement that guarantees a certain level of security is upheld by your vendors and sets access and security controls across your system.

3. Continuously monitor and assess

After the initial onboarding, the job isn’t over. At quarterly and annual intervals (in addition to after cyber incidents), you need to perform continuous monitoring and upkeep of the controls you have set through regular assessments.

Best Practices for Vendor Risk Assessment

Assess the Potential Impacts of Vendors

Vendor risk management cyber security should include quantifying and scoring the risks introduced by a vendor. Your vendor risk assessment process should mirror your internal risk assessment program. The main difference is the vendor’s systems and assets that interact with your assets are now the focus. 

You should understand the specific risks facing these assets and what the vendor is doing to mitigate those risks. You can then quantify the potential impact of a risk occurring, either by establishing a scoring system or focusing on the financial implications of the given risk.

Send Effective Vendor Security Questionnaires

A critical component of evaluating a new vendor is sending vendor security questionnaires. Ideally, their responses will give you all of the information required to evaluate their overall security posture, assign scores, and understand the financial impact of identified risks. 

Require Vendor Self-Attestation

For the questionnaire and onboarding process, you’ll need documentation and evidence from third parties. In addition, important information should have defined requirements to guarantee its authenticity. 

Cybersecurity vendor management requires accurate information. Otherwise, all other attempts will be ineffective since they’re based on inaccurate information. Self-attestation from an executive or third-party validation will help ensure the information you receive is accurate. Third-party validation includes results from a recent audit, compliance certification, or evidence satisfying regulatory requirements. 

Leverage Scanning Tools for Darknet and Public Exposure

Data breaches often end up on darknet sites or are exposed to the public. Has your potential vendor had a previous breach that resulted in sensitive data becoming publicly available? 

Leverage these tools as part of your due diligence process on a given vendor, both at the beginning of the relationship and continuously. 

Include Vendors in Your Incident Response Program

How will your security and compliance team react if a vendor has a security incident? Your incident response plan typically focuses on how you react to internal incidents, but it should also cover incidents that stem from your vendors. 

Use a Powerful Platform for Vendor Security Risk Management

Vendor security risk management is just as important as managing your internal risks. The above best practices will help you ensure that your vendor risk management program is well-documented, based on accurate data, and plans for vendor incidents.

Thankfully, you don’t have to start from scratch, handle calculations manually, and pour through compliance documentation with every vendor. Centraleyes is an integrated and centralized risk management platform that simplifies vendor risk management without sacrificing accuracy or effectiveness. 

Ready to see how Centraleyes can make your life easier and company safer? Contact our risk management experts today to see Centraleyes in action.