Fourth party risk and liability is often overlooked because there isn't direct relationship with the fourth party vendor. It’s important to always know your vendor and this waterfalls down to third and fourth parties. Listen now for the 3 oversight steps to take regarding your fourth party vendors.
Hello everyone and thank you for joining me today for our Third Party Thursday podcast. I'm Stephanie DellaCamera here at Venminder. Today’s topic is based on monitoring fourth party relationships.
It’s important to understand the term first. A fourth party is a vendor you don’t have a direct contractual relationship with, but your third party does. A fourth party is a third party to your vendor that plays a crucial role in delivering your product or service to your customer or the company.
With the release of the SSAE 18 in 2017, provisions were added that require third parties to reveal who their service providers are. This is extremely helpful to companies in identifying fourth parties in order to determine the controls in place. In fact, the guidance expanded the point that if the traditional SOC 1 reports were not available with subservice providers (AKA third party or fourth party vendors) that examiners should interview, visit and test against standard controls to ensure that these subservice providers were in fact operating within agreed upon controls.
If the fourth party is providing a critical service to your third party. You will want to know that your third party is managing the fourth party. It may also be important for you to monitor. Additionally, if the fourth party has direct access to your customer’s data or your company’s data you should pay very close attention to them. An example of this could be a computer programmer who is working as a contractor for your third party. By nature of their role, they may have access to your internal systems and data. Areas such as technology are heavily complemented by third and fourth party vendors.
If this is an area of concern based on your existing relationships, then you should consider verifying by way of verifying with your third party if any subcontractors are being used as part of the product or service which is being provided. Additional access audit logs and user access controls are a great way to help monitor who is in fact accessing your data and core systems.
I’ve found the biggest issues with the concept of fourth parties is out of sight, out of mind. The risk and liability is often overlooked since the company does not have a direct relationship with the fourth party vendor. Remember, it’s important to always know your vendor and these waterfalls down to fourth parties in addition to third parties.
I hope you found this podcast helpful. Again, I'm Stephanie DellaCamera at Venminder and if you haven’t already done so, please subscribe to our Third Party Thursday series.