Here’s the thing: as much as modern-day business evolves and adapts to emerging technologies and innovations, there’s one core truth that will stand the test of time: Business relationships are built on trust.
However, trust is not as quickly earned and kept as in the past, mainly because there are countless ways that technology can challenge and jeopardize a risk-free environment. So, although we hate going into business relationships with a cynical attitude, a healthy skepticism is not only needed but an effective way to protect all parties involved.
That’s where vendor security assessments play a pivotal role in implementing due diligence and ensuring all parties are aligned regarding risk management, compliance, and overall security policies. Let’s dive into it.
What is a Vendor Security Assessment Exactly?
Before we dive into how vendor security assessments (VSA) help companies identify security risks, let’s do a quick recap of what it looks like in practicality.
In brief, vendor security assessments are tools that provide an overview and evaluation of the risks, threats and vulnerabilities that third-party vendors may present. They help identify gaps in security practices and ensure alignment with industry standards. It provides businesses with valuable insight into the security landscape of third-party vendors and service providers before or during business activities to ensure that sensitive information is protected and that they can accurately mitigate and minimize potential risks and vulnerabilities.
Ultimately, the goal is for vendor security risk assessments to provide organizations with an accurate overview and evaluation of risks and common vulnerabilities relevant to their partnership with each individual vendor. This can include threats to compliance, confidentiality, data sensitivity, and how up-to-date the systems the vendor uses are. Once these risks have been identified and evaluated, each vendor is given a criteria score and categorized by severity.
How to Conduct a Vendor Security Assessment
Right off the gate, it’s essential to understand that vendor security assessments should give an in-depth understanding of each vendor from an external and internal perspective. This holistic approach ensures a comprehensive risk evaluation. That’s why companies can’t solely rely on good-faith answers from your service providers. Despite best intentions, it’s easy to overlook something critical or be misaligned on security policies or the requirements set for the vendor to meet.
Therefore, it’s important to keep in mind that although Vendor Security Assessment Questionnaires play a significant role in security assessments, they only form a part of the overall vendor security assessment (VSA). A thorough VSA includes the following steps.
- Include your internal stakeholders
For an effective VSA that covers all the essentials, input and involvement from stakeholders are incredibly important. Be sure to assemble team members from multiple departments and teams to leverage a cross-functional team, guiding you through the assessment process.
- Outline and Define Your Requirements
Before anything can happen, it’s essential to outline your security requirements and expectations for your vendors clearly. This will become the basis for your evaluation and should include all the non-negotiable security and regulatory requirements you (and, therefore, your vendors) must adhere to.
- Create a Vendor Risk Assessment Process
It’s important to create and establish a standardized VSA process in order to best mitigate and manage vendor risks. Naturally, different vendors will pose different levels of risk based on factors like their importance to your supply chain, and access to sensitive data. In order to manage this, it’s important to create an internal profiling and tiering assessment that helps categorize vendors and determine the level of scrutiny needed. This structured process ultimately allows businesses to make informed, risk-based decisions regarding vendor relationships.
- Develop Your Questionnaire
Develop a thorough security questionnaire covering critical security aspects, compliance, data protection, and risk management. This is where businesses should aim to be as intentional as possible. Do this by crafting targeted questions that speak to the relevant security frameworks and the vendor’s compliance efforts; for instance:
- Do you have a documented information security policy in place?
- Have you conducted a recent risk assessment to identify vulnerabilities?
- How do you handle access controls to sensitive data?
- Define Assessment Criteria
Keep in mind that the vendor security assessment should ultimately be set up in a way that makes it possible to gauge the security posture of your vendors by YOU. That means making it easy to understand and review for your team members. Define criteria for evaluating vendors’ responses, assigning scores based on risk levels, and determining the level of scrutiny required.
Developing Your Vendor Security Assessment Questionnaire
Now, regardless of the specific questions included in the assessment, it’s quintessential that a vendor security assessment can give you clarity on the following three categories:
A Vendor’s Compliance with Security Standards
Clarify that vendor compliance needs to align not only with industry standards but also with your organization’s specific security requirements. The regulatory landscape trumps any other benefit, feature, or act of good faith a vendor can provide. Ensure that vendors understand and comply with applicable standards such as HIPAA, PCI-DSS, or GDPR, depending on the nature of the data and the industry. This is the most black-and-white criterion within an assessment. If they do not comply with specific regulatory requirements that you are subject to, it’s a no-brainer; you cannot take on the risk. In fact, in the event of any breaches and/or security violations, the liability will fall onto your shoulders (and reputation). Therefore, determine the specific security standards for your industry or the type of data shared with the vendor (e.g., ISO 27001, NIST Cybersecurity Framework, GDPR).
A Vendor’s Incident Response Capabilities
It’s critical to assess the vendor’s preparedness for handling incidents effectively. It’s important to remember that there are no incident-proof security measures. The saving grace? Your incident response plan. Yours may be down to a t, but what about service providers and third-party vendors? Measuring the incident response capabilities of your vendor is a critical part of risk management and due diligence. Be sure to investigate how their plan (if any) aligns with yours.
This means inquiring about their process for detecting, reporting, and responding to security incidents. Then, why not put it to the test? Assess their communication strategy during a security breach and their ability to coordinate with your team.
A Vendor’s Capability to Collaborate Regarding Risk Mitigation
You do not want to be left in the dark regarding service providers and vendors, especially regarding how they handle and safeguard your information. Assess their willingness and ability to engage in joint security initiatives and their responsiveness to security concerns. In this case, ignorance is far from bliss. Therefore, a security assessment’s final element is monitoring and reviewing their collaboration capabilities.
Can your preferred vendor establish and maintain open communication channels regarding security concerns? What about their ability and willingness to collaborate on vulnerability assessments and penetration testing? A must!
Okay, But Why Go Through All The Trouble Though?
If it feels like a lot of work, that’s because it is. However, thorough and continuous vendor assessments are critical for a strong and compliant security posture in the long run. They ensure not just initial compliance but ongoing adherence to security standards. Here are some key reasons why vendor assessments are non-negotiable:
- Security assurance: You’ll finally have rest assurance that your service providers meet (and continue to meet) security standards, drastically reducing the risk of data breaches or security violations.
- Compliance Adherence: Vendor assessments prove that you have done your due diligence from a regulatory point of view, shielding your organization from legal and financial liabilities.
- Reputation Protection: By vetting vendors, your organization avoids security incidents that could harm its reputation and stakeholder trust.
But as you may have guessed by now, with everything in the security compliance landscape, nothing is as easy as ticking a once-off box. For vendor assessments to be truly effective, they must become part of your security DNA. How? Through ongoing monitoring and compliance.
Fortunately, you don’t have to carry the administrative burden alone. That’s why we’re here.
Confident and Consistent Third-Party Compliance with Scytale
We get it; running a business is a full-time job and one that often requires all hands on deck. Unfortunately, that’s when security threats and risks thrive. With Scytale, streamline your vendor security assessment process and enhance your overall security posture. Our vendor assessment tools ensure that your vendors become another strength you can rely on instead of your weakest link.
Reach out to our team and see how you can protect your information, compliance, time, and reputation in one fell swoop with automated vendor risk assessments and ongoing security compliance.
