Finding the Right Vendor in Cyber Security and Data Privacy
Digitization is driving rapid adoption of platforms and devices that can share sensitive data with third parties such as cloud service providers, data aggregators, application programming interfaces (APIs), and other technology-related intermediaries. In essence, this permeates the need to know and track vendors more diligently, given this trend of increasing vendor dependency in the cybersecurity space. Supply is becoming the most targeted security link in his chain. At the same time, customers are demanding lower cost, yet more cyber-secure products. These two needs are not always compatible. Additionally, the potential impact of supply chain attacks against a large customer base is almost limitless, making these attacks increasingly common.
The need to strengthen vendor management and pre-qualification will inevitably be directly linked and integrated with the need to conduct and implement third-party digital risk management processes. Deepening business and operational relationships with existing and potential vendors means that digital risk becomes increasingly complex, increasing external reliance on critical cybersecurity and data protection solutions provided directly by vendors requires systematic management to visualize and understand Therefore, as reliance on key vendors increases and their influence over business criticality increases, organizations need to systematically establish a holistic approach to managing new, diverse and complex digital risks. also increases.
Additionally, there are many ways security vulnerabilities in third-party vendors can lead to security incidents for your organization. Developing a vendor lifecycle management process is imperative as we become more dependent on vendors to manage the inherent digital risks in line with current and future realities. From a financial perspective, many large organizations face a common dilemma. Despite making significant investments in cybersecurity and data privacy, they have limited visibility into how their efforts are reducing their exposure to digital risk. As a result, spending on cybersecurity and data privacy has been compromised in terms of significant competency gaps in the vendor market and the combination of vendors that may constitute a fit for long-term strategic and operational partnerships. They are often not efficient or effective.
A lack of understanding of the extent of digital risk from third-party providers can hinder organizations from making strategic and operational decisions, which can have a significant negative impact on performance and economics. Unknown and ineligible digital risks posed to your organization by third-party vendors expose you to unnecessary risks that could otherwise be avoided. High-level examples of the various third-party digital risk challenges that organizations need to address include:
- Lack of internal digital risk procedures and processes resulting in inadequate understanding and competence of customer organizations and their needs
- Poor implementation of necessary security protocols and standardized requirements
- Lack of digital vetting of in-depth personnel
- Lack of detailed general knowledge of deployed subcontractors and additional digital audits
While not prescriptive, developing a basic framework for understanding your vendor base provides a flexible structure that your organization can adapt to meet your business needs. No detail or process orientation is required to establish such a framework and may consist of the following main elements:
- Identification of contracts or engagements with vendors
- Identification of contracts requiring risk assessment
- Identification of vendors that should be involved in and performed assessments to define risk criteria
- Gain a strategic perspective on risk
- Summary of responses by relative risk level
- Implementation of the warranty program
- Process review
A qualitative leap to take digital risk management to the next level depends on organizations becoming better protected against cyberattacks, with an ever-increasing shift in vendor and focus on digital risk management. I’m here. Inevitably, there are important aspects of considerations and requirements that overlap between digital risk mitigation and vendor prequalification. Nonetheless, organizations should have a firm understanding of their existing and potential vendor base, whether or not they represent digital risk. At the same time, organizations must ensure that the digital risk-specific share of responsibility is directly inherent in the measures and actions that vendors must take. So this digital risk accountability perspective should be his two-tiered approach, one for organizations and one for vendors, so some basic recommendations for organizations include:
- Identify and document vendors and service providers that may represent digital risk
- Define digital risk metrics for different types of vendors and services, including vendor-customer dependencies, critical software dependencies, and single points of failure.Supply chain risk and threat monitoring
- Manage your suppliers throughout the product or service lifecycle. This includes procedures specifically for handling used products or components that originate from digital risk.
- Categorize assets and information shared or accessible with suppliers that represent digital risk and define relevant procedures for accessing and processing them.
- Assess digital risk in your supply chain according to your own business continuity impact assessments and requirements.
- Define the vendor’s obligations regarding protection of organizational assets, information sharing, audit rights, business continuity, personnel reviews, and handling of incidents in terms of responsibilities, notification obligations, and procedures.
- Define security and digital risk requirements for acquired products and services, including all these obligations and requirements in the contract.
- Agree on rules for subcontracting and potential cascading digital risk requirements.
- Monitor service performance and conduct regular security audits to verify adherence to contractual cybersecurity and digital risk requirements. This includes handling incidents, vulnerabilities, patches, security requirements, etc.
- Get vendor and service provider assurances that no hidden features or backdoors are intentionally included.
- Defining digital risk countermeasures based on good practices,
- Monitor supply chain digital risks and threats based on findings from internal and external sources and vendor performance monitoring and reviews.
- Make personnel aware of digital risks.
Another aspect of this two-tiered approach is the need to continuously push vendors to ensure that product and service development complies with evolving security and digital risk practices and requirements. For example, vendors may implement good practices for vulnerability and patch management. Examples of recommendations to vendors are:
- Ensure that the infrastructure used to design, develop, manufacture, and deliver products, components, and services follows cybersecurity and digital risk practices.
- Implement product development, maintenance and support processes consistent with commonly accepted digital risk-specific product development and processes.
- Monitoring security vulnerabilities reported by internal and external sources, including third-party components used.
- Maintain an inventory of assets containing patch-related information.
Contractually, it is also of fundamental importance to include appropriate and conforming clauses in contracts or agreements with vendors. Accelerating dynamics around how digital risk evolves will lead to better structuring and structuring of contractual content, allowing documents to provide a reasonable degree of protection and control over the goods and services purchased. Guaranteed. It enables contracts to be a “living document process” and protects digital risk contractual content from being captured and updated incrementally during the actual operational contract management phase. Here is an example of how basic sections and clauses are structured and included in a contract:
- For national institutions where ICT security is a very important national risk and where security is the license to operate, vendors must prioritize the relevant concerns. Vendor shall ensure that security risks are carefully managed and protected from threats of all levels, including but not limited to nation-state threat actors.
- Governance: Vendor shall appoint an executive-level security and digital risk counterpart as the customer’s counterpart who is responsible for the location, reporting, and management of strategic security meetings for critical risks, incidents, and vulnerabilities. increase. This is to ensure strategic management of information and digital risk security in addition to normal customer governance.
- Critical Issues: Critical security issues, including critical risks, incidents and vulnerabilities, shall be immediately communicated to customers and designated parties. Vendor shall provide necessary support and information and take necessary steps to manage such risks. This is to ensure strategic alignment of key issues in addition to regular customer governance.
- Compliance: Vendor complies with all applicable laws and regulations regarding ICT security, document certification, or compliance with ISO 27001 or equivalent information security management systems, industry best practice security frameworks and NIST cyber security frameworks. shall ensure compliance with
- Supply Chain: Vendor shall implement information security controls throughout its supply chain in accordance with the security requirements of this Agreement. Vendor shall further support regular operational information security collaborations with relevant third parties, such as ICT outsourcing partners, cloud vendors (SaaS/PaaS/IaaS), and customer-appointed managed security service providers.
- Reference Architectures: Vendors enable secure cloud adoption through agreed security reference architectures based on vendor security architecture models and implement security tools and processes to provide end-to-end security for an organization or public sector. Must be enabled.
Ultimately, vendor pre-qualification not only promotes accountability within organizational functions to define digital risk-specific scope and requirements, but also new cyber security and data security experts familiar with digital risk management. Promote active cross-functional participation in privacy vendor scouting. You can focus more on overall vendor management. Therefore, the management of expenditures and investments contained within business objectives is continuously aligned, and understanding qualified vendors and partnerships within the company often proves critical to overall business and organizational performance. It has been.
Conclusion
In the future, the interconnectivity and convergence of digital tools will continue to grow as society embraces the next version of the internet built on blockchain technology. Hypothetically, because third-party digital risk encompassing all third-party digital enablement will initiate a holistic digital risk management transformation in terms of how to improve risk effectiveness and efficiency. There is an opportunity that may lay the foundation for Among other things, this offers opportunities for process automation, decision automation, digitized monitoring, and early warning. The journey to managing third-party digital risk will be a long-term endeavor, but running digital risk in parallel will allow transformation to capture significant short-term value and drive initiatives aligned with high-value targets. can be launched. Organizations become more efficient, effective and accurate as their risk management function becomes more digital. Looking ahead, digital risk management must become increasingly lean and agile to address cost pressures, enhance regulatory compliance, and strengthen an organization’s ability to manage competition. White Label Consultancy can help and support organizations on their journey to drive third-party digital risk management to new levels of value creation and performance management.
