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The Importance of Vendor Compliance Management

In today’s interconnected world of commerce, your business is only as secure as the weakest link in your supply chain. Whether you rely on suppliers for raw materials or third-party vendors for specialized services, a security failure at one node can quickly cascade throughout your entire organization. This makes Third-Party Vendor Cybersecurity a critical priority.

Introduction

In today’s world of commerce, there are many links that exist between companies all over the world—like the suppliers and other external, third parties that you rely on, for example.

For instance, if you manufacture products and distribute them into the marketplace, you will be dependent upon other entities to provide you with the raw materials, as well others to ensure that what you deliver to your customers is of high caliber.

But with all these interconnections, any failure at one node can quickly cascade onto other parts of your manufacturing and distribution processes. One area in which this is happening more often is third party vendor cybersecurity, which is the focal point of this article.

What Is Vendor Compliance?

Simply put, it can be specifically defined as follows:

“It refers to managing all aspects of your company’s and your suppliers’ compliance with statutory, legal, and technical requirements. It ensures that both your business and your suppliers are legally compliant, vetted and verified to access industry-relevant trading opportunities and mitigate trading risks.”

(SOURCE: 1).

In other wordsyou want the third parties that you rely upon to be up to the same cybersecurity standards that you have established and maintained for your business. This includes primarily:

The protection of Personal Identifiable Information (PII) datasets;
Compliance with recent data privacy lawsespecially CCPA and GDPR.

In most instancesyou will be sharing confidential data about your customers with these vendors to accomplish the tasks that you have outsourced to them. You must ensure that all security protocols are in place to protect your customers—especially regarding authentication. For exampleonly those individuals that must access it should have their identity confirmed across different levels.

Part of this is ensuring vendor compliance with major data privacy laws. Unfortunatelythe law dictates that if any of the PII datasets that you have trusted to your third party is released either accidentally or maliciouslyyou’re likely to be at fault for this; facing audits and potentially harsh financial penalties.

The Components

When it comes to cybersecuritycreating a Vendor Compliance Program can also be referred to as the “Vendor Cyber Risk Management Framework” or “VCRMF” for short. It should include the following:

Implement a well-known model:Trueyou can pretty much set up your own checklist in deciding what you need to look for when deciding upon a hiring a third party to work with. But if this is the first time that you are doing thisit is highly recommended that you make use of an already established template such as the “NIST Cybersecurity Framework.” NIST models provide a listing of standards and best practices that you can start using almost immediately.

A key certification that you need to make sure that your potential third party vendor has is “ISO 27001”. If they have this designationthen you can be assured that they already have a strong set of controls and procedures in place to safeguard PII datasets.

Making sure of compliance:As you start to craft your VCRMFit is absolutely critical that you check that your potential third party has achieved full compliance in your specific industry. For instanceif you are a healthcare organizationnot only will they be bound to the policies of the GDPR and the CCPA but also to HIPAA as well. A good way to initiate this is by making a detailed list of your cyber-related checks and balances and cross-comparing that with what the third party has in place.

It is not a one and done process:Many businesses think that once they have screened their third parties from the outsetthen all the work is done. But this is not the case. According to a recent study by Gartner, 83% of all Cybersecurity risks escalate after the contract has been signed and the work has been started.

(SOURCE: 2).

Ensuring compliance is iterative. This means you have the right to execute random audits to make sure the same security protocols are still in place. Clear lines of communication must also be in place; for exampleif they have been hit by a cyber-attackthey must notify you immediately.

Conclusions

Finallyas you start the process of hiring a potential third-party vendorit is equally important to make sure that you don’t get bogged down in every detail. Conduct your due diligence, but keep your mission-critical processes running as smoothly as possible.

If you are completely new to thisit would be prudent to reach out to a cybersecurity consulting firm such as a Managed Security Services Provider (MSSP). And turn to the FTK product family when you need the gold standard in forensic investigation tools to understand connections and sharpen the focus of any digital investigation.

Sources

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