Governance of third-party risks in the finance industry is usually superior because lending organisations and banks extend their daily activities to multiple third parties. However, third-party risk impacts all kinds of businesses regardless of their industry and size.
But until businesses learn how to manage potential third-party risks, they will inevitably place their customers’ information in danger.
Why Third-Party Vendors Pose Potential Risks
Plenty of businesses are now more aware of how cyberattacks could negatively impact their organisation, from colossal financial losses to PR nightmares. But even if an organisation isn’t directly liable for a cyberattack like a data breach from a third-party vendor, for example, the consequences are almost always the same.
Customers aren’t really willing to separate your business from your third-party vendors. This means that a cyberattack from or on your vendors could indicate that your business would suffer allegations of indifference for your customers’ welfare and poor management.
Third-party vendors and businesses collaborate in various ways that can induce potential risks such. This happens when third-party vendors access sensitive information from companies. Also, this occurs when they store information for organisations and when both parties share information.
Prioritising Security with Third-Party Deals
Utilising these guidelines, businesses can moderate how they approach their vendor selection practices. This helps make sure that their current vendors continue providing the exact security requirements they require. These include:
- Scrutinise third-party vendors according to your specific security standards. Before just hiring a vendor, determine what security policies and infrastructure they already have in place. This is particularly vital if a prospective vendor will be storing your sensitive data because they must follow your cybersecurity protocols and practices as well. Additionally, it’s a good idea to involve your IT security solutions company when vetting prospective vendors.
- Perform ongoing vendor systems reviews. The world of cybersecurity threats are ever-evolving, and this means that you should update your safeguards regularly. Regular third-party vendor reviews will uncover when, how, and where they have updated their own security policies and infrastructure and if they are still sufficient. You can likewise consider making contract renewals conditional on regular reviews. And if needed, hire an independent IT security solutions company that can conduct the review if you are unsure that your IT team can do it.
- Employ collaborative and user-friendly security solutions. You need to make sure that you maintain security across all platforms when you share data with third parties. For example, if you need to email sensitive information, utilise automatic encryption to prevent errors and keep access to encrypted emails secure but easy so that relevant people can access them safely whenever they need to.
Ultimately, if your business isn’t actively pursuing superior cybersecurity practices by vetting third-party vendors, reviewing their security practices and collaborating safely, then you’re leaving your organisation vulnerable to various cybersecurity risks.
Put simply, you have the power to try and mitigate all those cybersecurity risks. This is by implementing a solid security program in place since data protection and security requires an inter-organisational and comprehensive approach.