The purpose of vendor risk management is to strike a delicate balance between facilitating the needs of the business by integrating new vendors and ensuring that those same business partners don’t exceed the organization’s risk appetite. Maintaining a healthy balance between those two interests requires leaders to always consider broader business goals when executing VRM strategies.
SecurityScorecard’s Cyber Risk Quantification (CRQ) calculates the financial impact of cyber risk to improve collaboration and communication with all business stakeholders. Business leaders prefer to speak in the language of monetary values, and they evaluate options through that lens, not by getting in the weeds of cybersecurity technicalities. SecurityScorecard’s risk quantification capabilities can be incorporated into your existing VRM process, providing the additional business context that is often needed for productive discussions.
In this blog, we will walk you through the ways CRQ can enhance vendor risk management.
Gain business-level context
A financial impact assessment of the cyber risks your organization is exposed to will help you identify and rank which type of cyber incident would lead to the greatest potential losses.
Performing a self-assessment helps you align your onboarding requirements with your organization’s enterprise risk management strategy. With results like this, you can collaborate with CISOs and other security leaders to answer questions like:
What kinds of cyber risks should we be most concerned with?
If we had to prioritize certain onboarding requirements, which would those be?
Justify VRM recommendations
There are two scenarios where vendor risk managers have to be prepared to justify their conclusions.
The first is with your own business stakeholders. If a vendor security assessment reveals that a vendor’s cybersecurity posture is subpar, that can lead to a conversation with the business partner about whether or not to onboard the vendor. Being able to frame the discussion with data like “this is the type of cyber risk we are focused on reducing, here are the potential losses we face” and “here are the findings that lead us to believe that onboarding the vendor will increase that risk” will lead to more productive discussions with business partners.
The second scenario is with the vendors themselves. Sometimes they question the merits of onboarding requirements, which can lead to a stalemate that requires an escalated conversation between your organization and the vendor management teams. These are two sets of business stakeholders that may prioritize other objectives over security if they aren’t properly armed. SecurityScorecard is uniquely capable of framing remediation recommendations with associate financial impact reduction estimates. This data allows your management to discuss cyber risk in the language they are most comfortable with. They can tell vendors, “we want to help you prevent incidents that could interrupt your ability to provide the services we depend on. Here are the investments you need to be making and the value you will gain from them”.
Evaluate the adequacy of a vendor’s cyber insurance coverage
Another concern of vendor risk managers is the financial viability of suppliers. If a cyber incident were to impact a vendor, would they have the financial resilience to bounce back? Their cyber insurance coverage is part of that calculus. You may consider developing guidelines that set a minimum threshold of how much coverage a vendor needs relative to their potential exposure to financial losses.
Start incorporating CRQ into your VRM process today
Traditional cyber risk quantification often requires working with professional services firms who review the ins and outs of your security to inform their analysis. These assessments are intrusive, can take weeks to complete, and their findings can quickly become obsolete. This type of risk quantification does not scale and cannot be implemented within VRM workflows.
SecurityScorecard independently evaluates the financial impact of cyber risk for any company in the world. To get started, go to your SecurityScorecard account and take advantage of a complimentary, one-time risk quantification self-assessment.
These were just a few examples of how CRQ enhances VRM. How would you use CRQ in your own workflows?