Many businesses (dare we say all) utilize at least one third-party vendor for their business processes. This includes anything from a dual partnership to outsourcing business processes to an external provider. No organization is an island, and if you’re considering a third-party vendor of any kind, it’s essential to gauge their security compliance before getting down to business.
That’s where security questionnaires come in. Here’s everything organizations need to know to ensure accurate and in-depth vendor risk management through understanding the importance of security questionnaires.
Organizations and third-party vendors
70% of businesses consider their dependence on outside vendors moderate to high. However, this doesn’t mean there isn’t a substantial security risk associated with the alliance. When working with external providers, many of them are granted access to sensitive information and client data. Due to this, third-party-caused risk incidents have become incredibly common.
As an organization, your own security compliance hinges on the security of a third-party vendor. So naturally, organizations need to be highly cautious and confident in their provider’s ability to safeguard sensitive data or bear the risk of non-compliance, security breaches, and reputational loss.
What is a security questionnaire?
Security questionnaires generally occur before a business decision is made and determine an organization’s security posture. In a nutshell, security questionnaires help organizations see whether or not a third party has undergone vulnerability scans, outside penetration tests, and external audits such as SOC 2 Type I or Type II.
However, the nitty-gritty of a security questionnaire is far more in-depth and delves into almost every aspect of a vendor’s security DNA. The more thorough the security questionnaire, the more accurate the vendor risk assessment.
IT teams usually compile security questionnaires. However, the layout, format, and questions may differ between organizations to determine the security safeguards each organization considers a top priority.
Receiving a security questionnaire
If your business was asked to complete a security questionnaire, fret not – it’s a good thing. Essentially, receiving a security questionnaire means that a potential client or partner interested in doing business with your organization is investing more time into ensuring all the right security measures are in place. However, this also indicates the importance of completing thorough security questionnaires; written security assessments offer the validation needed to get business deals and partnerships over the line.
Organizations should note that although security questionnaires can be lengthy and time-consuming to create and complete, the questions must cover all the critical topics, and the answers must be as in-depth and specific as possible. Suppose an organization fills in inaccurate or false information with no evidence to back it. In that case, it can be held liable for any future damages.
Why are security questionnaires important?
Ultimately, the importance of security questionnaires is relatively self-explanatory. For example, you wouldn’t onboard a new team member without ensuring they have the required experience and skills. Similarly, organizations shouldn’t engage with a third party without ensuring they have the required security measures to safeguard their data.
Security questionnaires allow your organization to mitigate some risks when enabling data handling to a third party. It also gives the organization the security net of due diligence. In the event of a data breach by a third-party vendor, organizations can rest assured that it was not due to their negligence and they had confirmed all the necessary safeguards ahead of time.
This is referred to as a third-party risk management (TPRM) program. And an effective one may protect your organization from regulatory, financial, and reputational damage in the event of a third-party breach.
Typical topics covered in a security questionnaire
Regardless of the specific security questionnaire, most of them will cover one or more of the following elements to ensure an accurate vendor assessment.
Compliance certificates are the one question that’s probably the most likely to pop up on a security questionnaire and the one that’s on the tip of any organization’s tongue when considering a third-party vendor. Proof of compliance is requested, and security questionnaires aim to determine which compliance frameworks third parties comply with. When creating a security questionnaire, it’s important to remember that not all security compliance frameworks certify organizations. Although ISO 27001 does grant an actual certification, SOC 2 and HIPAA do not.
An organization’s security procedures are pivotal in providing a proactive approach to security. Therefore, many security questionnaires will focus on questions about an organization’s specific security measures and assess procedures to safeguard data. Generally, questions centered around security procedures focus on the following:
- Employee security awareness training.
- Security breach protocols (this is exceptionally important concerning HIPAA compliance).
- Monitor and tracking controls for any malicious activity.
Security questionnaires are in-depth and can be time-consuming to create and complete. However, businesses need to keep in mind that the goal is to ensure minimal risk and that the vendor in question is implementing due diligence. A good way to get an overview of this is by questioning and analyzing their security policies.
Generally, this includes information, physical, application, infrastructure, and network security. It is up to each organization’s discretion whether they want to see a full policy document of specific sections.
Going into business with a third-party vendor is already considered a risk – and risk management is the core essence and bedrock of security questionnaires. Therefore, many organizations ask to view evidence of a detailed risk management protocol before confirming a partnership. This includes identifying and listing risks that could directly impact the organization’s data or information systems and the personnel responsible for the risk management protocol and implementation.
Why should you create your own security questionnaire?
Organizations must remember that a security questionnaire’s purpose is to identify specific vulnerabilities that may impact their organization. Therefore, security questionnaires will also differ based on your organization’s compliance with certain frameworks (such as, SOC 2, ISO 27001, or HIPAA).
Keeping that in mind, there are five industry-standard security assessment templates that most organizations use to draft their questionnaires. The five foundational standards include:
VSAQ: The Vendor Security Alliance Questionnaire:
This questionnaire is geared towards supervising vendors’ security practices and covers five sections (data protection, security policy, security measures, supply chain, and compliance).
CIS Critical Security Controls Questionnaire:
The standard includes 20 actions organizations must take to protect themselves from cybersecurity threats and align with popular security compliance frameworks such as ISO 27000, PCI DSS, and GDPR.
This questionnaire addresses specific controls to protect controlled unclassified information (CUI) for non-federal organizations. It has 14 controls that tie directly to NIST 800-53 and ISO 27001.
SIGQ: The Standardized Information Gathering (SIG) Questionnaire:
This questionnaire includes resources to use as a starting point to ensure organizations implement best practices when conducting a vendor risk assessment. It also includes core topics such as cybersecurity, privacy, data security, and business continuity.
CAIQ: The Consensus Assessments Initiative Questionnaire:
This questionnaire is handy for vetting cloud service providers. In addition, it hones in on best practices for information security in cloud computing environments.
Ultimately, organizations must understand that although third-party vendors can complete a security questionnaire, it’s in an organization’s best interest to ask for as much evidence and proof as possible to confirm due diligence.
As we know, security compliance isn’t a simple box you can tick off and needs to be consistently managed, updated, and analyzed to ensure there aren’t any new risks or threats. Fortunately, this no longer has to be a laborious process, and many organizations are now utilizing the efficiency and accuracy of automated third-party risk review and management.
Security questionnaires and HIPAA compliance
Although a security questionnaire may prove beneficial when vetting third-party providers, there’s an additional step regarding HIPAA compliance. This involves any business agreement between a covered entity (CE) and a Business Associate (BA).
The HHS requires CEs and BAs to create a Business Associate Agreement (BAA). This outlines the responsibilities of each and their role in protecting PHI and HIPAA compliance. This is enforced by the Omnibus Rule, which dictates how a BAA should be drafted and what it needs to contain.
Manage real-time vendor security assessments
Would you like to onboard third-party vendors but are unsure whether or not it’s worth the risk? Fortunately, you don’t have to carry out the vetting process alone.
Let Scytale accurately assess current and potential external vendors to ensure their security policies, controls, and standards align with your organization’s security and compliance needs in real time.
Manage vendor risk management easily and track their compliance with Scytale.