Posts

 It’s easy for an organization to get caught up in establishing policies, workflows, and procedures for vendor risk management. Without context as to why these policies are important and stressing this to your team, many will lose sight of the primary goal of vendor risk management – to put the organization in a defensible position.  An organization owes it to their customers.  The goal of vendor risk management is to position the organization in a defensible position by taking inventory of all vendors, measuring how much of a risk each vendor poses, assessing each vendor objectively, and then systematically repeating this process.  That’s a hefty goal, so let’s break it down.  

Inventory – Taking inventory of all vendors

The first step to mitigating risk is to take inventory of all vendors.  This list includes everything from the organization’s HVAC technician, cleaning service, insurance broker, and even the free online software provider.  These are all considered vendors, and while not all of them have the same access to sensitive information, many vendors will have some access to the organization’s information either physically or otherwise.  The goal of taking inventory of your vendors is to make sure that all the vendors within an organization is accounted for.  Quite simply, you don’t know, what you don’t know.

Classify – Measuring how much of a risk each vendor poses

Not all vendors will have access to the same amount of information, but it’s important to sort your vendors into buckets.  Using the same classification method puts all your vendors into perspective, and puts the organization in a defensible position.  The HVAC technician won’t necessarily have the same impact as an insurance broker that has access to sensitive information.  However, both vendors pose a risk – SecurityStudio has three impact levels – high, medium, and low.  By classifying vendors objectively, the right course of action can be taken to assess them appropriately. 

Assess – Assess each vendor so that the appropriate action can be taken

The goal of the assessment process is to make sure that the right questions are being asked, and that the same questions are being asked of all vendors within the same bucket.  This again will put the organization in a more defensible position. The goal of the assessment process is to be as objective as possible and to complete due diligence.  It’s important to ask these questions now, so that in the case of an adverse event, the organization is still defensible.  Tools, like SecurityStudio, makes it easy.  SecurityStudio offers a comprehensive list of questions, and the program tags who answers the questions and timestamps when the questions are answered.  The ultimate goal of the assessment is to have an objective overview of the vendor’s security posture so that the organization is able to make an informed decision to either go into business or continue doing business with the vendor.  Once the results of the assessment are given, then it’s a matter of replicating the process on a regular timely basis, or as the business relationship changes. 

Now that the goal is broken down, it puts things in perspective.  Yes, organizations are pressured to develop a vendor risk management program by regulatory laws, but it’s more than that.  It’s just the right thing to do.  Organizations owe it to customers to make sure that the information they provide is secure by mitigating risk the best they can and putting themselves in a defensible position.  This is the primary goal of vendor risk management.

To put your goals to action and get an easy-to-use automated workflow that evaluates all third-party vendors and brings your weakest links to the surface, schedule a demo with us today!

Vendor Risk Management Goals
s2core

Estimate your score or book free demo today

For most organizations, measuring vendor risk management is extremely difficult, if not, impossible.  That’s because they’re either doing nothing to manage vendor security risk or they are using a method that isn’t conducive to measurement.

Here are a few helpful statistics to measure in any VRM program:

  • Overall risk exposure
  • Trending of overall risk
  • Riskiest vendors both from an operational risk standpoint as well as impact
  • Individual vendor trending
  • Number of total vendors
  • Number of high risk vendors
  • Specific areas that are a significant risk across multiple vendors

Your VRM program should be reportable.  Most C-suites or boards would like an update at some frequency on both the overall security program but also the VRM program.  Having these types of statistics easily reportable is a huge plus to the information security program in general.

Use statistics like these to keep leadership informed of the current state of the program as well as to justify the need to continue managing 3rd party risk.

SecurityStudio leverages S2SCORE in order to be able to give you all the statistics and reports you need to stay on top of your VRM program. Schedule a demo with us today so see how we can help with your VRM program!

s2core

Estimate your score or book free demo today

What it is, why you need it, and how to use it.

You might be thinking something like:

“Meh! We don’t need another policy that nobody will read! Policies are a waste of time, especially a Vendor Risk Management Policy!”

I get it. People aren’t thrilled by policies. They’re not exciting. They’re not fun either. For some, policies can even be painful.

Policies get a bad rap. Not because they’re evil or anything, but because people rarely use them well. The fact is, information security policies play a very important role in supporting all information security efforts, and a vendor risk management policy plays a very important role in supporting our vendor risk management efforts.

I don’t like wasting people’s time, so I’ll get right to the point. Most policy problems are founded in the confusion about what a policy is, why they need one, and how they should be used. So, let’s address this as simply as possible. After all, complexity is the enemy of good information security (remember this always).

NOTE: In some organizations, vendor risk management and third-party information security risk management have slightly different meanings. Third-party information security risk management is part of a greater vendor risk management effort. For the purposes of this article, we’re using vendor risk management and third-party information security risk management synonymously.

What a Vendor Risk Management Policy is

The “what” for any policy are the rules. Think of this in terms of a game. A policy defines the rules for the game. A vendor risk management policy defines the rules for the vendor risk management game. Simple.

If you’ve never played the vendor risk management game before, this could be a difficult policy for you to define. If this is you, ask someone you trust for help. Here are two options for you right now:

  1. You can download our template. Change the rules to fit the game that you’re willing to play and make it yours.
  2. Contact SecurityStudio – The experts at SecurityStudio will make sure you get all the answers you need.

There are some typical structural things that should found in every policy, including this one. Policies should contain a purpose statement, note the audience for the policy, the policy status (draft, approved, adopted, etc.), version, date, the policy itself (the rules), references (to standards and/or other documentation), enforcement intentions, and version history.

Your game, your policy. Don’t expect someone else’s policy to fit as-is, and don’t include rules that you don’t intend to play by.

Why you need a Vendor Risk Management Policy

If the “what” for policy are the rules, the “why” for policy is communication. Policies are used to communicate the rules to others. You don’t need a policy if you don’t have anyone to communicate the rules to. Good news, right?

Before you rejoice, it’s very unlikely that you have no one else to communicate the rules to. There’s almost certainly someone else who needs (or wants) to know the rules.

Think about who needs to know the rules for your vendor risk management game. The list could include:

  • Anyone else within your organization that participates in vendor risk management activities.
  • Anyone who’s interested in your organization’s vendor risk management activities (examiners, regulators, partners, etc.)
  • Anyone who’s ultimately responsible for your organization’s vendor risk management activities, including executive management and the board of directors (if one exists).

The more people who need to know about your rules, the more important the policy becomes. In a small organization where there is a single person who does all the vendor risk management activities, there’s less importance. Not “no” importance, just less importance.

How to use a Vendor Risk Management Policy

Once you’ve written a policy, it’s time to figure out how to use it. Every policy, including this one, must be approved, communicated, adopted, and adjusted (or revised). This is a policy lifecycle that is well understood by most.

  • Draft – The policy is drafted (as v1 in new policies, as incremented version in subsequent cycles).
  • Approve – The policy must be approved by someone with authority (executive management, BoD, etc.).
  • Communicate – The policy must be communicated to all personnel who are affected by it.
  • Adopt – Gap analysis (or audit) coupled with plans and projects to ensure compliance.
  • Review/Revise – Periodic (and regular) review of policy, suggested edits move forward.

Policies are reference documents and should be written this way. Let’s go back to our game comparison.

When you sit down with friends to play a new board game, how many people read the rules? Just one, and this is the de-facto person who oversees the game. How many people should read your policies (rules)? Just the person (or group) who oversees the game. As the game is played, the rules are referenced whenever a question comes up. Same goes for policies.

That’s it. Simple. Define the rules for vendor risk management, communicate the rules, and manage the rules. Vendor risk management policy in a nutshell.

Having a policy in place is great, but also having a workflow that evaluates all third-party vendors and brings your weakest links to the surface is even better. Schedule a demo with us today to get your easy-to-use vendor risk management program.

s2core

Estimate your score or book free demo today

Vendor Risk Management best practices (VRM) conjures up all manner of interpretation. As a business leader, I’m concerned with all aspects….

  1. Are my vendors financially stable enough to fulfill our agreements?
  2. Are my vendors operationally capable of fulfilling our SLA’s and contractual requirements?
  3. Are my vendors doing enough to protect the data I’m sharing with them?

Numbers one and two are easy to measure and offer a mathematically sound position by which vendors may be held accountable. Number three scares me.

What are we to do in the face of daily news, very public and embarrassing news, of vendors’ indiscretions leading to the breach of sensitive information? More questions lead to more questions and on and on it goes.

As a company on the rise, including an ever-growing number of vendors and third-parties in the ecosystem, the need to do due diligence on data protection is ever increasing. Here’s the thing – it doesn’t have to be technical or out of reach if you’re not a technically-minded person. Understanding risk is the lynchpin to the process.

Defensible Position

Defensible position is the mantra of VRM. Say it with me – “Defensible Position.”

Start here – put ALL of your vendors through the same wringer. When doomsday (a breach) happens, the only defense you have is that a process was followed and that exceptions to that process were minimal and for a VERY good reason.

Example:

  • Jerry’s lawn service handles landscaping services for your business. Jerry and his team never set foot into your office, they just mow the lawn and keep the flowers alive. Still, Jerry should be able to withstand a brief questioning of the nature of your relationship be filed under the “low risk” designation and put into a queue to review in a year. If, by next year, Jerry is also providing maintenance services INSIDE your building, you should ask more questions because Jerry and his team may have physical access to information they didn’t have before. Make sense?

Jerry’s likely not a risk if he’s outside your doors. He’s a potential HUGE risk once he has access to the office. Keep an eye on that with a standard process to reevaluate all vendors like Jerry on (at least) an annual basis.

Assess

Once you’ve put your vendors through the “smell test” of risk (officially called ‘classification’) then move onto assessing whether or not they are doing the right things with their access to your information. There are a number of ways to do this, but in the interest of being in a DEFENSIBLE POSITION, make sure all vendors of a particular classification (high, medium, critical, etc.) get the same assessment.

Lawyers love words like “assume, thought, maybe, about, approximately, etc.” so eliminate that possibility. By measuring your vendors with the same ruler, you take subjectivity out of the equation. Starting to see the advantage, here?

  1. You cannot protect yourself from the breach. There, I said it. The skill and nature of the “bad guys” are such that total immunity is impossible. Accept that and move on to managing the risk of the situation. What is the likelihood of a breach? How bad would it be if you were breached? If you don’t have the math to lean on for answers to those questions, you’re VRM (and overall security strategy) is inadequate. Period.

Five years ago, achieving a well-measured VRM program was incredibly expensive and often reliant on specialized expertise that was in increasingly short supply. Times have changed and there are options out there that have real effectiveness, such as SecurityStudio , which automates the process and put you in a defensible position.

So, now you’re in a defensible position and at least feel good that you’re doing what’s expected and being responsible. But, there’s a greater responsibility…

2. Help your vendors practice better security. You’re in a position to help the organizations who wouldn’t naturally care about security. Put the basics in place to better protect themselves and you. VRM is a GREAT way to lead your suppliers to best practices while also protecting yourself in a more effective way. It costs you nothing and has (potentially) enormous benefits.

The soapbox if officially unattended. To recap…

  1. Get all of your vendors in a common process.
  2. Rank your vendors according to the same criteria.
  3. Assess your vendors’ security and get some math around their risk to you.
  4. Help your vendors get better – don’t just point out problems and wish them luck.

Please get in touch with me, John Harmon, if you have any questions. There’s a lot of uncertainty and lip-service out there trying to profit from your uncertainty. Lean on people who have the experience and the propensity to serve to help you with VRM, or any other security concerns you have. The good guys are within reach and ready to help.

For an easy-to-use automated workflow that evaluates all third-party vendors and brings your weakest links to the surface, schedule a demo with us today!

s2core

Estimate your score or book free demo today

Many companies are daunted by the task of building a vendor risk management (VRM) program that gathers all vendors in one place, classifies them, assesses the risky ones and determines if that risk should be remediated or terminated. However, the benefits of an automated VRM program easily outweigh the risks of not doing vendor risk management.

1. Reduced Costs and Time

When defining your VRM program, ensure you setup a centralized process. A centralized VRM program is one that is built and coordinated so that all information is easily accessible by members of your organization, not just those that are managing vendor relationships.

To be successful, your vendor risk management program must include members from a variety of groups, such as finance, legal, IT, procurement, accounting, purchasing and more. Each should have a role in helping to inventory and classify your vendors. In the long run, a centralized process will help to reduce costs and time involved in managing your VRM program.   

2. Reduced Risk

Once all vendors are in your VRM program and classified, you’ll begin to get a good snapshot of where the third-party risk lies in your organization. All vendors should be classified by low, medium or high risk, so the vendor risk manager in charge of your VRM program can start focusing on just the medium- and high-risk vendors.

Once your high-risk vendors are pinpointed, you can begin to reduce the risk they pose on your organization by requiring them to do a risk assessment. If this assessment results in unsatisfactory risk, you’ll have the choice of asking them to remediate their risky practices or eliminate them as a vendor.

3. Maintaining Compliance

It’s critical for businesses in regulated industries to remain complaint. As third-party breaches continue to rise, regulators are cracking down on organizations that are not properly managing their third-party vendors. Regulators classify vendors as an extension of the company’s ecosystem and, as such, both the company and the vendor could be penalized and/or fined in the event of a breach.

An adequate VRM program can simplify your compliance initiatives and can satisfy all industry regulation compliance requirements, thus putting your business in a good position when the regulators arrive.

4. Reporting

After the legendary third-party breach of Target, many CEOs and Boards of Directors began taking notice of vendor relationships. As a result, many are now asking for comprehensive reports on the state of risk of the organization as it relates to vendors. Without an adequate VRM program, pulling together this information can be nearly impossible.

Ensure that your VRM program has a robust reporting component so that you can easily pull an executive summary for your Board of Directors and a detailed vendor risk report for management.

5. Defensibility

Above all, being defensible in the event of an information security breach should be at the top of every CEO’s mind. No company will ever be 100-percent secure, so it’s more important to develop your company’s defensibility.

When a breach occurs at your company, regulators, lawyers, customers and more will come after you for retribution. Your company could be liable, even if the breach was caused by a third party, if you don’t have a VRM program in place that shows your due diligence. Your company’s due diligence is shown when you take the necessary steps to both track your vendors and determine their level of risk on your company.

If you want an easy-to-use automated workflow that evaluates all third-party vendors and brings your weakest links to the surface, schedule a demo with us today!

s2core

Estimate your score or book free demo today

A common theme for many organizations is that they don’t have time to do third-party information security risk management, or they don’t have the time to do it right. There are so many competing initiatives in an information security professional’s life, I get it. Do you have a case for not prioritizing third-party information security risk management, or not prioritizing it higher?

Let’s use logic to figure this out together.

NOTE: Notice I use the words “third-party information security risk management” in place of “vendor risk management”, this is because I think one is a little more accurate than the other. Third-party information security risk management usually fits within the scope of a larger vendor risk management program. For this article we’re going to focus on third-party information security risk management.

Three primary questions come to mind when thinking about the importance of third-party information security risk management:

  1. Is there a problem with NOT doing third-party information security risk management?
  2. If so, how big is the problem?
  3. What should you do about it?

Is there a problem?

So, you’ve got other priorities that prevent you from assessing and managing information security risks related to your vendor/third-party relationships. The fact that you have other priorities isn’t a problem, it’s reality. The fact that you may not be prioritizing third-party information security risk management, or that you may not be prioritizing high enough, could be a big problem.

Inherently, I know two things when it comes to third-party information security risk management:

  1. Nobody cares about the security of my information more than I do.
  2. Third-parties are the cause (directly or indirectly) of most known data breaches.

Nobody cares about the security of my information more than I do.

You know this is true, right? You spend thousands of hours, and many dollars trying to implement and manage good security controls within your organization. You’ve developed sound policies, worked tirelessly to make sure people are trained and aware of good security practices, you’ve spent thousands (maybe millions) on expensive technological controls like firewalls, intrusion prevention, data loss prevention, endpoint protection, and on and on.

You use third-parties to provide certain services to your organization. Maybe printing, maybe hosting, maybe IT support, who knows? Do you think the third-parties you use have spent the same amount of effort in protecting your information? Is thinking they’re protecting your information the same way you are, good enough? Play it out. Stay with me on the logic here.

We know that no matter what we do, we cannot possibly prevent all bad things from happening. We cannot eliminate risk, but risk elimination isn’t the goal anyway. Risk management is the goal and it’s the only thing that’s even remotely attainable.

Let’s say a vendor loses your information (this is more likely than you know, read the next section). Or, let’s say that an attacker gains access to your information through some sort of access that we’ve granted them. What happens next?

You conduct an investigation. Maybe there are lawyers involved. Maybe there’s customer data involved. Maybe you’re not sure. One thing is for certain, somebody isn’t going to happy. When the right (or wrong) somebody isn’t happy, somebody else needs to pay. The unhappy “somebody” might be a customer or group of customers, a government regulator, or the board of directors. The unhappy “somebody” might be all of the above.

The unhappy somebody is going to want answers. What answers do you think they’re going to want? They’ll want answers to questions like:

  • Did you know that your vendor was doing x, y, and z?
  • Did you ask how the vendor was protecting our information?
  • What sorts of questions did you ask the vendor about protection?

The quality of your answers will often dictate what and how much you’ll have to pay. No answers or bad answers will cost you more. Somebody almost always pays when something bad happens, the degree to which they pay, will largely be dependent on what answers they’ll have to defend themselves. This, in a nutshell, is defensibility.

Can ignorance be defensible, claiming you didn’t know any better? Short answer is “no”. The reason is outlined in the next section.

Third-parties are the cause (directly or indirectly) of most known data breaches.

Soha Third-Party Advisory Group conducted a study (Source: http://www.marketwired.com/press-release/soha-systems-survey-reveals-only-two-percent-it-experts-consider-third-party-secure-2125559.htm) last year that concluded the following; “third parties cause or are implicated in 63 percent of all data breaches.” You might be skeptical of this number, but the Soha Third-Party Advisory Group consists of some heavy-hitters in our industry, security and IT experts from Aberdeen Group; Akamai; Assurant, Inc.; BrightPoint Security; CKure Consulting; Hunt Business Intelligence, PwC; and Symantec. I didn’t write the study, but I believe that much of the findings represent the truth.


Soha Third-Party Advisory Group

Can you claim you didn’t know better? When you’re tasked with answering the inevitable questions that are coming your way after a breach, do you really think you can claim you didn’t know?

To compound our ignorance as a defense problem, are the following facts:

Third-party data breaches are on the rise, at least in the United States. A study by Opus concluded the “percentage of companies that faced a data breach because of a vendor or third party was higher at 61 percent, which is up 5 percent from last year and 12 percent from 2016”. (Source: https://www.pymnts.com/news/security-and-risk/2018/third-party-data-breaches-cybersecurity-risk/)

A study conducted by Kaspersky Lab concluded that the costliest data breaches are those that involved a third-party, especially for small to medium-sized businesses (SMBs). (Source:  https://mobile.itbusinessedge.com/blogs/data-security/breaches-from-third-parties-are-the-costliest.html)

Opus & Kaspersky Lab

Do you need more justification for re-prioritizing third-party information security risk management? Maybe you run a security program based on compliance, only doing what you’ve been told to do. This isn’t a good idea because information security is about risk management, not compliance, but let’s say it’s the way you do things anyway. Compliance is king. What if I told you that regulators and examiners are aware of the risks, and they read the same news we do. They are increasing the pressure around third-party information security risk management, and they’re losing patience with organizations that haven’t taken the risk seriously. It’s better to get ahead of this curve now.

Back to our original question; Is there a problem with NOT doing third-party information security risk management? My opinion, using the logic we’ve outlined together, is “yes”. There is definitely a problem with you NOT doing third-party information security risk management.

Are you convinced that you need a third-party information security risk management solution? If so, let’s figure out the right solution. If not, we’ll still be here to help when you become convinced. I promise.

How big of a problem is it?

Our next question was how big of a problem is it, meaning how pervasive is the third-party information security risk management problem in our industry? I promise to provide a short answer.

At a macro-level, relying on my unscientific observations from working with (up to 1,000) clients and discussions with other information security professionals, I would estimate that as many as 90% of the companies ranging in size from 20 – 30,000 employees do not have a third-party information security risk management program of any substance (or formality).

The problem is big in our industry. I would caution against using this as justification for not have your own (program); however. The herd mentality seems to be less and less defensible too.

Our last question: what you should do about it (meaning third-party information security risk management)?

What should you do about it?

For your own good, hopefully I’ve convinced you that not doing anything or deferring this issue until it becomes a higher priority, is not a good option. If not, like I stated previously, we will be here for you when you change your mind.

A well-designed third-party information security risk management program fits the following characteristics:

  1. It’s not disruptive to the business. After all, your business is in business to make money (and/or serve a mission). If information security gets in the way, you’ve got problems.
  2. It’s measurable in a way that you can show progress. Going from nothing, or next to nothing, to a fully implemented third-party information security risk management program is not feasible or encouraged. A solution that allows for gradual adoption over time is the right way to go.
  3. Doesn’t take shortcuts. The definition of information security accounts for administrative, physical, and technical controls. Only accounting for technical controls isn’t going to cut it, especially when we consider the fact that your most significant risk is people.
  4. Organized, standardized, and repeatable. These things make your program scalable and useable. The way to accomplish this is to automate all parts of the program that can be automated, without taking shortcuts.
  5. Intuitive, easy to use, and easy to understand. Third-party information security risk management shouldn’t be rocket science. A well-designed third-party information security risk management solution should be logical, so much so, that you don’t need vast amounts of experience and expertise to run it.

We specifically designed SecurityStudio to fit all the criteria necessary in a best-in-class third-party information security risk management platform. We did so by using more than a combined 100 years of information security experience, and at a reasonable price that doesn’t unnecessarily take away from your other competing information security priorities.

I invite you to speak to a SecurityStudio representative about how SecurityStudio will work for you. Schedule a demo too while you’re at it!

s2core

Estimate your score or book free demo today

Historical Use of Vendors Over Time

Before we address the purpose of vendor risk management we need to spend a few moments to understand how we got here. Looking back 20 years ago third-party vendors were used differently and not used as much.  We did not perform any sort of vendor risk management.  Considerations to use a vendor would be primarily based on cost.  Today is a much different picture.  We can easily create an entirely new business with a laptop, internet connection and a credit card.  Software solutions can be purchased and used within organizations without getting IT involved; therefore, skipping the chance to properly evaluate the potential risk.  The threat landscape has changed vastly and continues to evolve seemingly faster all the time.

Shift Control from Internal to Third Party

I reminisce about my first job coming out of college.  The large company I worked for didn’t have internet access, we didn’t have email and we didn’t exchange data or allow others to access our data.  All the control was in our hands.  If we suffered some sort of incident it was up to us to fix it and get back on track.  Today we outsource to third-party vendors for strategic reasons (increased efficiencies, new services, focus on core business objectives, etc.). Risky vendors will then increase our risk if not properly evaluated and managed.  The control is shifted from us to the vendor.  How much data are we giving to the vendor?  Does a disruption in the vendor’s ability to provide services create an unaccepted situation?  Does the vendor have a formal approach to securing your data?  Do they have a risk management program that’s formally mandated and supported by their executive management?  Do they treat your data with the same standards as you do?

Purpose of Vendor Risk Management

A lack of a complete and effective vendor risk management puts organizations at risk.  Regulated industries like Finance, Healthcare and Public Utilities all require ongoing risk assessments.  The use of third-party vendors needs to be incorporated into the risk assessment.  A thorough and efficient vendor risk management program can make a difficult process run more smoothly. 

Another reason you should consider a formal vendor risk management approach is to address the business impact risk that’s introduced by utilizing third party vendors.  Your reputation could be tarnished by the actions of a vendor you use.  Your organization could suffer unacceptable downtime or lack of service due to a vendor’s internal (or lack of) business practices.  You could also be affected by a third-party vendor’s financial situation.  If a vendor provides a critical or unique service that is not easily replaced, it’s in your best interest that their finances are in good order.  Can they keep their lights on and provide you with the critical services you pay them for?

In a simple form, the purpose of vendor risk management is ensuring the use of third-party vendors and making sure they do not introduce a negative impact, business disruption or damage your reputation. It also puts you in a defensible position by showing you’re practicing proper due care and due diligence regarding information security and vendor risk management. 

Vendor Risk Management Process

The vendor risk management process comprises of four steps.  Once the initial process is started, new vendor and annual vendor reviews will be much faster and simpler to manage.

  1. Identify your vendors – Any individual or company who provides you paid services.  Working with Accounts Payable will cast the biggest net.  Don’t forget about services purchased on a credit card – so check those statements!
  2. Classify your vendors – Now you have the master vendor list you need to classify the vendor into high, medium and low risk categories.  Department managers are typically the best to determine this since they have an idea of the types and amount of data the vendor has access to as well as how the vendor is used and what impact the vendor has on the business.  This can sometimes be difficult at first because some managers might not understand their role in the vendor risk management process.
  3. Assess vendor risk – A risk assessment should be performed on all high and medium risk vendors.  The risk assessment should be the same criteria for all classes of vendors.  Higher risk vendors will be under the microscope a bit more than the medium risk vendors.  Low-risk vendors simply need to be evaluated for risk and documented.  It’s important to show you’ve evaluated and classified ALL vendors, not just the ones you feel are important. 
  4. Risk treatment – Once risks are identified you need to determine if the risk is acceptable or if you will ask\require the vendor to mitigate identified risks.  Remediation efforts by the vendor should be monitored and assurance made to you by the vendor that they did indeed address the risks identified.  This might come in the form of policy developed, audit results or verified risk assessment performed certified information security expert.

The entire process is repeated on a regular basis, preferably annually.  The initial startup of a vendor risk management program can be daunting but with the correct tools, it doesn’t have to be.

Who Do We Work For?

We all work for someone.  Our industries might be vastly different but the common item we all have is we work for people.  People entrust us with their finances, healthcare data, personal data, retirement funds, school grades, etc., the list goes on and on.  Behind all that data are mothers, fathers, grandparents, aunts, uncles, nieces, nephews, sons, daughters, friends and neighbors.  We owe it to them to do everything we can to protect their data as if it were our own.  This is the REAL purpose of vendor risk management.

If you want an easy-to-use automated workflow that evaluates all third-party vendors and brings your weakest links to the surface, schedule a demo with us today!

s2core

Estimate your score or book free demo today

Vendor Risk Management (VRM) isn’t hard, but we interact with organizations every day that have complicated, manual processes, or they’re doing nothing at all.  That complexity typically comes from the lack of regulatory clarity around VRM expectations as well as the lack of enforcement.  What is a business supposed to do?  Good question…

At SecurityStudio, we encourage people to think about defensibility.  Sure, you want to identify trouble vendors early and try to manage their risk, but you will never be 100 percent successful at that.  You want to do everything you can to protect your business from a breach, but you also want to make your business defensible in court when a breach happens.  Defensibility occurs when you follow a consistent process.

So let’s start with the basics:  How do you do VRM?

  1. Follow a consistent process.  Always go through the same process and incorporate VRM as early as possible into the vendor process.  The best time to get information from a vendor is when they are striving to earn your business.  Here’s a good process to follow:
    • Get a list (inventory) of your vendors.  Finance probably has a list.
    • Classify them.  We use 3 buckets: Low, Medium and High risk.
    • Assess the risky ones.  If they’re medium or high risk send them a bunch of security questions.  Solutions include spreadsheet questionnaires, S2SCORE, SOC 2 etc.
    • Make decisions. Accept them as a vendor, ask them to fix some things first, or outright deny them.
    • Repeat annually.
  2. Make sure you document your process! Write it down so that you are defensible if/when something bad happens. 
  3. Make sure your process allows you to account for all vendors.  Sure, only a small percentage of your vendors are high risk, but from both a compliance and risk standpoint you need to account for all.  Why?  Because if a breach occurs you’ll have to answer to why you didn’t account for all vendors…
  4. Spreadsheets and a manual process are better than nothing.  Many people start this way.  I think this is primarily because there haven’t been good, cost effective VRM tools on the market until recently.  SecurityStudio is a good example of a tool designed for VRM.
  5. Don’t fall for the gimmicks.  Many services (often very expensive) claim to do VRM but they really are just vulnerability scanning publicly accessible, internet facing assets.  Information security is a combination of Administrative, Physical and Technical controls, so vulnerability scanners only offer a partial solution.

Vendor risk management isn’t that complicated, but like everything in information security the rules aren’t as clear as you’d probably like and everyone is trying to sell you a different version of a solution.  SecurityStudio simply tries to lay out a thought process that makes sense to most people.  If you like the process above, we hope you’ll take a look at SecurityStudio.

s2core

Estimate your score or book free demo today

On September 29, 2018, Baylor Scott & White Medical Center – Frisco, a joint venture managed by United Surgical Partners International (USPI), discovered that more than 47,000 patient records may have been compromised when the hospital uncovered an issue with the credit card processing system of a third-party vendor. The Texas hospital was required to notify federal regulators under the HIPAA Breach Notification Rule.

Data that may have been accessed by hackers includes name, mailing address, telephone number, date of birth, medical record number, date of service, insurance provider information, account number, last four digits of the credit card used for payment, the credit card CCV number, type of credit card, date of recurring payment, account balance, invoice number and status of transaction.

The hospital assures it patients that medical record information and social security numbers were not accessed; however, name, address, date of birth and medical record number may have been accessed by hackers. Under HIPAA, name, address, date of birth and medical record number are all considered protected health information (PHI).

Corrective Action

In addition to terminating the relationship with the vendor, Baylor Scott & White Medical Center – Frisco is also offering affected patients or guarantors one year of free credit monitoring services through TransUnion Interactive. However, the damage may have already been done. According to an article by Health IT Security, health information is more valuable than just credit card information or financial data alone, and hackers could sell the information on the dark web for more money than a social security number.

Breaches on the Rise

The U.S. Department of Health and Human Services Office for Civil Rights maintains a breach portal, commonly called the “wall of shame,” of all breaches of unsecured PHI affecting 500 or more individuals. Currently, the list contains more than 400 breaches in just the last 24 months. Each breach is currently under investigation by the Office for Civil Rights.

Breaches can be inevitable, but healthcare organizations must do everything in their power to protect PHI and avoid a breach. To accomplish this, a good vendor risk management program should be implemented. Third-party vendors must be inventoried, classified and assessed to determine their level of inherent risk on the healthcare organization. Once assessed, you can determine if their level of risk is acceptable, if you need them to go through a remediation process, or if you need to discontinue your relationship with this vendor. By doing so, healthcare organizations can show due care and create a defensible position in the event of a breach.

 

s2core

Estimate your score or book free demo today