Third Party Risk Management is a process of assessing, managing and monitoring the risks associated with working with external parties.
Third-party means any individual or organization that is not part of your company, but with whom you have a business relationship. This could be suppliers, contractors, service providers, etc.
Risk management is the process of identifying, assessing and managing risks. It helps organizations minimize the potential impact of risks on their business operations.
There are many benefits to implementing a third-party risk management program, including:
- Improving cybersecurity: By assessing and managing the risks associated with working with external parties, you can help reduce the overall cybersecurity risks to your organization.
- Enhancing sustainability: A third-party risk management program can help you ensure that your organization’s activities are sustainable and do not put undue strain on the environment or local communities.
- Creating a more robust ecosystem: By assessing and managing risks associated with working with external parties, you can help create a more robust ecosystem of businesses that are less likely to experience disruptions.
The following are five simple steps to help you get started with third-party risk management:
Define your scope and what cybersecurity risks are acceptable for your organization and document these expectations. Third-party risk is unique to each organization, so it’s important to tailor cybersecurity requirements to fit your specific business needs while maintaining alignment with your overall cybersecurity strategy.
Conduct due diligence on potential partners before entering into any agreements. This includes reviewing their security posture, policies and procedures. Be sure to assess the financial health of the organization as well as their reputation in the industry.
Put security controls in place for all external parties that have access to your systems and data. This may include things like multi-factor authentication, data encryption and activity monitoring.
Monitor cybersecurity risks on an ongoing basis and be sure to update your third party risk management program as needed. This includes keeping up with changes in the cybersecurity landscape and adjusting your program accordingly.
Have a plan in place for how to respond to a cybersecurity incident involving a third party. This should include steps for containment, investigation and recovery. Be sure to involve your legal team in this process as well.
By following these simple steps, you can effectively manage the cybersecurity risks associated with working with third parties. Doing so will help to protect your organization’s data and reputation while maintaining a strong cybersecurity posture.