How to Conduct a Vendor Security Assessment to Identify High-Risk Vendors

By Phoebe Fasulo

Posted on Jan 8, 2020

If your organization uses third-party tools to manage critical data, then it’s just as important to monitor their cybersecurity risk as it is your own. Implementing efficient systems from the start allows you to stay on top of your vendors’ cybersecurity risk and frees up time to be spent on business initiatives that will impact your bottom line.

What is a vendor security assessment and why is it important?

A vendor security assessment helps your organization understand the risk associated with using a certain third or fourth-party vendor’s product or service. Monitoring your organization’s internal cybersecurity posture is a given, but companies often make the mistake of overlooking their vendors’ cybersecurity procedures. It’s important to identify your vendors’ potential vulnerabilities as your own.

Here are the steps to assessing your vendor’s security rating:

  • Review existing vendors
  • Assign each vendor with a security rating
  • Respond to security risks and define vendor performance metrics
  • Continuously monitoring your vendors

One of the most important points to remember when monitoring your vendors’ cybersecurity is consistency. Continuous maintenance is a key to addressing threats effectively and in real-time, which is important since your organization’s cybersecurity is only as good as the weakest link across your chain of vendors.

How to identify high-risk vendors

The simplest way to identify high-risk vendors is to do your due diligence before providing them with any of your organization’s sensitive data. Thoroughly evaluate each vendor before rushing into any contracts by researching the controls they currently have in place to understand how they respond to and defend against attacks. Then, determine the full complexity of the relationship your organization will have with the vendor so you can begin to identify any possible vulnerabilities. A detailed analysis of every current and potential vendor is the first line of defense against threats.

What information should you aim to get from a security assessment?

One method of assessing your vendor’s security rating is a due diligence questionnaire, which will provide you with a view of every vendor’s systems, so you can fully comprehend the vendor’s current cybersecurity efforts. When evaluating vendor risk, your goal should be to answer the following questions:

  • Are there any formal security programs in place?
  • How is data protected when in transit from the vendor to the client, end-user, etc.?
  • What are they actively doing to prevent breaches and how often do they check for vulnerabilities?

How to conduct a vendor security assessment

To successfully conduct a vendor security assessment, you will need to do the following:

Review existing vendors

The first step is to take an inventory of all of your existing vendors. Classify each based on who has the most access to customer data, and prioritize from highest to lowest-risk based on their access as well as their systems and networks.

Assign each vendor with a security rating

Just as you would internally, conduct a cybersecurity risk assessment for each vendor. Assigning each with a security rating will help you further prioritize your vendor risk monitoring strategies as well as highlight where your efforts would be best spent on first.

Respond to security risks and define vendor performance metrics

Clearly define your expectations by setting metrics that allow you to easily monitor vendor performance on a regular basis. Keep these Key Performance Indicators (KPIs) in mind when creating vendor contracts so you can ensure all organizations are up to standard.

Continuously monitor your vendors

The best way to maintain a strong cybersecurity posture across your ecosystem is to regularly monitor all third-party vendors and ensure efforts are still in place to protect important client and user data.

How SecurityScorecard can help

Vendor security assessments are an important process that should not be overlooked or pushed aside. It can be challenging enough to maintain your organization’s cybersecurity posture, and the ability to easily monitor your complete chain of systems and vendors has only recently become possible. This is due to efficient and intelligent cybersecurity vendor risk management solutions.

SecurityScorecard provides you with full visibility across your entire ecosystem, making it easy to prioritize your third and fourth-party vendors from high to low-risk by instantly determining an organization’s cybersecurity posture across 10 groups of risk factors. With a clear line of communication and an efficient method to track running efforts, you’re able to easily establish a line of communication between vendors and oversee the total IT infrastructure of your organization.

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