3 Tips for Creating a Robust Third-Party Risk Management Strategy

Risk comes in all shapes and sizes, from cybersecurity threats to supply chain issues. But, 45% of the time, your vendors are to blame. 

Earlier in this series, we shared our top tips for mitigating internal cybersecurity threats: the business threats imposed by employees knowingly and unknowingly.  

At the top of our list? Treat cybersecurity like a required skill: screen for it during hiring, teach it during onboarding and provide continuous education/resources around it through employee tenure (just like any other professional skill). 

Mitigating insider risk is about creating a cybersecurity culture that empowers great employees to protect your business and stops bad hires from ever making it through the door. 

But, risk doesn’t just come from the inside out. In fact, 45% of the time, it’s external threats that put the health of your business at risk. 

Their Compliance Is Your Compliance 

Leaning on third parties to get the job done is good business–especially in this hybrid work era where relying on a remote network of collaborators is the new norm. 

Third parties are the vendors, suppliers, contractors, and service providers in your ecosystem/supply chain that help you make it all happen–and help you make it happen profitably and efficiently. 

Third-party relationships, however, bring inherent risks including strategic, reputational, regulatory, information security, and financial risks–due to access to internal company/customer data, systems, processes, and other privileged information. 

In fact, risk incidents connected to third parties are at an all-time high, with 59% of organizations reporting that a data breach was caused by one of their vendors. 

Noncompliance, supply chain disruptions, security breaches, and data thefts caused by third parties in your unique organizational ecosystem can lead to penalties and serious reputational damage. 

In short: their compliance is your compliance. And, that means it’s critical to bolstering your third-party risk management strategy. Here’s how to do it: 

Conduct Third Party Screening 

As the labor market continues to shift, it’s likely that you’ll be turning to contractors more and more to drive growth. 

With vendors making up more and more of your workforce and functioning more and more like traditional employees–it’s time to treat them that way!  

Treat third parties like regular candidates and screen them for risk before they walk through the door to decrease your exposure to financial, safety, and reputational risks. 

And, be sure to partner up with a top-notch third-party screening technology, such as our Vendor Screening, to make audits more thorough but less time-consuming. 

Our industry-leading vendor screening solution features 24/7 access to a custom, web-based screening tool, and an easy-to-read compliance dashboard–so you can feel good about doing your due diligence on a trusted, data-backed platform. 

Create Effective Third-Party Onboarding 

Setting up an effective third-party onboarding process is the key to a robust risk management program. 

Onboarding of third parties should include more than just vendor screening (#1 above), it should also include further data-collection (via surveys and interviews) to further your diligence and a contract that clearly defines roles and limits for heightened security. 

It should include credential-sharing with role-based access (most third-party risk comes from people with unnecessarily high access to sensitive information), account creation and best practices, and all the information vendors need to do their job (including culture-building and engagement). 

FYI: partnering with an onboarding workflow solution, like S2Verify, can help you deliver on all of these goals in half the time! 

Always Be Auditing 

Screening and onboarding new vendors is only half the battle when it comes to mitigating third-party risk. 

Once they’re on board, it’s key to continually monitor their account for noncompliance, supply chain issues, security breaches, data thefts, and any other threats–to create a stable vendor ecosystem, ensure data security, and stay compliant. 

Consider establishing a third-party monitoring strategy that enables you to gather and analyze data on vendor cybersecurity posture, business ethics, financial status, and to identify potential risks. 

And–you guessed it–be sure to partner up with a third-party monitoring platform that helps you execute that strategy while saving you time and money.