What Third-Party Risk Management Is and How to Get Started
Lots of companies rely on outside vendors to help solve problems or provide additional expertise or services. Once hired, these third parties quickly become integrated into the company and are often given access to existing systems, processes and data.
But it doesn’t matter how good an organization’s own cybersecurity risk management is if its third-party partner lacks its own equally vigorous program. Why?
Remember SolarWinds? The news was recently full of reports about how this third-party vendor infected up to 18,000 of its reported 33,000 customers—many of which were U.S. agencies, including the Departments of Defense, Treasury, and Homeland Security, as well as Fortune 500 companies, universities, and health systems. In this Trojan horse-style attack, bad actors hacked SolarWinds’ Orion cybersecurity management software, embedding malware. When SolarWinds’ customers downloaded Orion, the hackers then had a backdoor to their systems that allowed the hackers to install even more malware. The attack went undetected for months, and the delay complicated the recovery. Affected government agencies and organizations are still sorting out the damage.
And malware attacks are extremely costly to the infected organization—on average $2.6 million in 2021, according to a recent report from Accenture. And that’s only one type of cyber attack. IBM reports that the average cost of a data breach in the U.S. in 2020 was $3.86 million and took firms on average 280 days to detect and contain. Cybercrime Magazine expects overall global cybercrime to cost the world $10.5 trillion USD annually by 2025.
So what can organizations do to ensure the third parties they hire are trustworthy partners?
A good first step is to seek guidance from a proven cybersecurity firm that specializes in third-party risk management, such as TalaTek.
Third-party risk management, also called vendor risk management, assesses the risks associated with using outside service providers. The process helps organizations set up effective cybersecurity practices to prevent the vendor they hire from introducing exploitable vulnerabilities into their system.
The risk management firm can work with the organization to do the following:
- Define its risk appetite, goals, processes and metrics,
- Collect inventories of third-party partners and the data they access,
- Analyze the third-party partners’ systems for gaps in how they comply with the organization’s goals, frameworks and regulations,
- Plan appropriate action for each identified risk and design exit strategies for critical third parties, and
- Remediate known gaps and implement a governance plan.
To learn more about TalaTek’s approach to third-party risk management, get in touch with us. We’d love to hear from you.