What is third-party risk management? 

Third-party risk management is a process that deals with the management of third-party vendors. This guarantees that using third-party contractors, IT services and providers do not result in a potential business risk or negative impact on business performance. Third-party risk management aims to assist organizations in managing and monitoring risk hazards coming from third-party suppliers of IT products and services.  

THIRD PARTY RISK MANAGEMENT

third-party risk management process

What do we do, how can we help you?

Our vendor risk management program will help you estimate the risk based on the data provided by your vendors, automate your vendor risk management activities, precisely track your vendors and the risks posed to your entire organization.

A vendor risk management plan is an organization-wide step-by-step checklist that summarizes the activities that both the company and the vendor should perform. The plan should reflect all actions and priorities that need to be addressed by the vendor. Furthermore, the checklists and due dates ensure that all steps are followed and executed in a timely manner. The entire organization is involved in the process to ensure none of the potential risks are overlooked.

Benefits of using our system?

  • Easier classification of vendors – low, medium and high by the risk they bring to the organization
  • Cease using sperate documents to manage third-party relationships
  • Increased third-party responsibility and awareness
  • Improved third-party management flexibility
  • Streamlined third-party risk management processes
  • Consistency of metrics and reporting across all vendors
  • Improved data-driven decision making
  • More structured third-party risk management procedures within the company
  • Increased overall risk assessment and mitigation

Information security breach stats in 2018

The average cost of a data breach per country:
US – 
$7.91M,
Canada – 
$4.74M,
Germany – 
$4.67M,
France – 
$4.27M,
UK – 
$3.68M 

On average, it takes 197 days to identify a data beach and 69 days to contain it. (source) 

The top 5 breaches exposed the data of over 2.4 billion records. (source) 

81% of all users affected by the Facebook breach are from the USA (source) 

“Without information security, it’s not a matter of if you are going to get breached, it’s a matter of when”

– Evan Francen 

Third-Party Management Risk Best Practices for 2019

  1. Document a complete set of third-party risk management practices – policy, program and procedures. Make sure to review and update the documentation as often as needed. The more frequently the better. 
  2. Set very specific standards for acquiring a new third-party and ensure everyone involved understands the critical importance of this stage. Create a list of due diligence must-have requirements for all new vendors. Keep all departments informed and updated on their role, responsibilities and impact on the program.
  3. Analyze your vendor list and understand the risk level (high, medium and low) each of them poses to your organization. Be sure to have an excellent understanding of who is managing your vendors at any time. Ensure regular checks of the vendors are performed on a regular basis. 
  4. Evaluate the risk of doing business with each vendor and measure to what degree they are critical to your company. Pay close attention to both the business side and regulatory risk significance.  
  5. Introduce robust contract management practices. Keep it all streamlined and integrated to prevent missing key deadlines as they might have a critical impact on your business. 
  6. Get familiar with how your vendors manage supply chain risk management. How do they manage their supply chain risk? Are they audited? When was the last time it happened? 
  7. Update all vendor documentation prioritized by their relative risk level. Create a plan that ensures even low-risk vendors get updated regularly. Establish a scalable structure for handling a new risk assessment, ongoing monitoring/due diligence and communication so that you can stay on top of it as your list of vendors grows with your organization. 
  8. Establish a complete overview that helps you get better visibility on third-party risks and compliance, improve partnerships between involved companies and their third-and-fourth-parties while reducing redundancies. 

These 8 best practices will help you deal with third-party risk management with ease in 2019.