When you outsource to a third party, cybersecurity risk is a huge possibility. The confidentiality of your organization’s and customer’s data is on the verge of being exposed daily as your third parties, just like you, must have comprehensive precautions and plans in place to information from being breached, a phishing attack, malware and more. It’s just the honest truth.
According to the FFIEC, cybersecurity is defined as “The process of protection consumer and bank (organization) information by preventing, detecting, and responding to attacks.”
4 Best Practices to Reduce Third Party Cybersecurity Risk
This all may be very concerning to hear; the fact that your third party could be the reason you experience a very unanticipated cybersecurity attack. Understandably! But, don’t start scrambling around just yet. First, let me share some best practices to reduce third party cybersecurity risk as these should help you with your quest to protect your organization and customers:
1. Verify your third party has implemented strong third party risk cybersecurity monitoring and plans.
This includes security testing to ensure their data is secure as well as preparing an incident detection and response plan. This is a great way to identify weakness in a tangible format.
Your vendor’s reported security testing should include the following:
- Regular, standardized penetration testing of internal and external networks and social engineering testing. Social engineering testing should include things such as simulated phishing emails and employee awareness tests.
- Documented follow up to findings as well as mitigation of any issues that were found. You want to make sure that your vendor has demonstrated that they’re testing for weakness, following up on any issues and fixing them timely.
- Documented evidence that security testing is done at least annually. Preferably by an impartial third party.
Incident detection and response is also crucial. An incident can be anything that affects the confidentiality, integrity or availability of information or an information system. Incidents happen. It is inevitable. The key to minimizing the impact is discovering them quickly and having a plan to address them quickly and effectively. How do your vendors identify an incident? Do they have an effective response plan and notification procedure? Your Vendor should be able to demonstrate what they do if an incident occurs, how follow up and resolution is performed as well as notification steps.
2. Confirm they share cybersecurity best practices and provide adequate training to their employees, contractors and even their vendors.With employee, contractor and vendor management, you have to understand the vendor’s ability to ensure their agents are prepared to protect your data. Training of these groups as well as documented and enforced access management are critical to data protection.
Confidentiality agreements, security training, management of vendors and access management are just some of the ways a third party can offer assurance that anyone with access to your data is properly trained.
3. You must ensure data breach notification requirements are documented in your contract language.Notification timeframes need to be documented as well. Be sure to request the third party notify you as soon as a breach occurs, or in a specified timeframe. Write it into the contract! Many organizations have shared that there is a high-level of mistrust between third parties who may not notify them of a data breach in a timely manner.
4. Set cybersecurity risk expectations with your vendor.If a breach originated from the vendor and not your internal organization then perform deep audit testing. If the vendor is unwilling to cooperate then you have larger issues and should reconsider your partnership.
By taking the necessary precautions and understanding your third party’s cybersecurity posture, you can reduce the risk of your vendors and contractors becoming your weakest link. At the very least, you want to thoroughly review your vendor’s approach to cybersecurity and risk management.
Remember, by failing to properly manage your vendor cybersecurity risk, you could become vulnerable to a breach and the regulatory, reputational and financial consequences that come with it.
If your vendor has suffered a data breach there are steps you can take. Download the infographic.