Vendor risk management becomes more important every year. Increasingly, enterprise IT incorporates a complex, interconnected system of cloud-based storage and application resources. Leveraging the cloud’s speed and volume to reduce operational overhead increases compliance risk in equal measure. As companies add more vendors to their IT ecosystem, they need to ensure that they verify vendors’ security controls, conduct regular security audits, and have ongoing communication with their third- and fourth- party vendors. Keep reading to learn how a vendor risk management questionnaire can help your business manage the ever-evolving threat landscape present within working with third-parties.
What is a vendor risk management questionnaire?
A vendor risk management questionnaire, also known as a vendor risk management template or vendor risk assessment questionnaire, is a tool that helps your organization spot potential threats and weaknesses within your vendor landscape. This includes both third-party vendors as well as hidden fourth-party vendors that your third-party vendors communicate with. In some cases, organizations might not even be aware of these fourth-party vendors or the risks that they present.
Why is a vendor risk management questionnaire important?
Working with third-party vendors can bring various forms of risk into your organization, including information security risk, compliance risk, reputational risk, and more. If your company is not aware of these risks, your vendor’s risks and vulnerabilities can become your own. A vendor risk management questionnaire helps you manage these risks by highlighting threats associated with your third- and fourth-party vendors and determining the level of risk each individual vendor poses. Without monitoring for threats with a vendor risk management questionnaire, your organization could be at a greater risk of data breaches or other forms of cyberattacks.
What are the challenges of a vendor risk assessment questionnaire?
Cybersecurity is an ever-evolving platform. Technology can change as quickly as a year, and policies can be updated or discarded. A vendor risk management questionnaire provides only a brief overview of your vendors at a specific point in time. For what it’s worth, these questionnaires can also be labor-intensive to implement within your organization as well as ensure that your organization is informed on vendor risk.
How to conduct a vendor risk management questionnaire?
Most organizations take a three-pronged approach to security. After identifying risks, they incorporate technology and processes to help people protect data security. Although “knowing is half the battle,” knowing the right questions to ask is the other half which is why we’re offering a free vendor risk management questionnaire template to help you. When completing a vendor risk management questionnaire, you must conduct it in these steps:
- Step 1: Identify the cybersecurity risks
- Step 2: Identify key technical controls
- Step 3: Identify key process controls
- Step 4: Identify key “people” controls
Keep reading to explore the details and specific questions within each step.
Step 1: Identify the cybersecurity risks
The first step to creating an actionable questionnaire is identifying risks so that you can analyze them. In many ways, this identification process is similar to the one you do for yourself. At the core, you want to ensure that your vendors are applying the right controls to nonpublic personally identifiable information (PII) to protect the information that you share with them.
|Data||Do you collect, store, or transmit personally identifiable information (PII)?|
|Data||Do you limit your PII collection and storage?|
|Location||Do you store PII in an on-premises location?|
|Location||Do you store PII in a cloud location?|
|Location||What geographic locations do you use when storing PII?|
|People||How do you provide users access to PII?|
|People||Can users access PII remotely?|
|Devices||What types of devices do your users collect, store, or transmit PII from?|
|Devices||Do you monitor all devices connected to systems, software, and networks?|
|Compliance||Do you need to comply with any governmental regulations? (Please list regulations in comments)|
|Compliance||Do you have any industry standards certifications? (Please list certifications in the comments section)|
Step 2: Identify key technical controls
Your organization determines its own risk tolerance. In other words, your organization knows the risks that you are willing to accept, reject, transfer, or mitigate. As part of creating a vendor risk management questionnaire, you need to ensure that your third-party business partners have a risk tolerance that aligns with yours.
|Network Security||Do you use a firewall?|
|Network Security||Do you use a VPN?|
|Network Security||Do you encrypt data-at-rest and in-transit? (Describe encryption level in comments)|
|Network Security||Do you use TLS and SSH certificates to ensure data exchanges are secure?|
|Endpoint Security||Do you install antimalware and antiransomware on all devices?|
|DNS||Do you monitor for DDoS attacks?|
|DNS||Do you protect against spoofing of email servers?|
|Patching Cadence||Do you install security patches for systems, networks, and software? (Explain timeline in comments)|
|Patching Cadence||Do you retire “end of life” products? (Explain process in comments)|
|IP||Do you install antimalware and antivirus on all devices connected to your networks?|
|Application Security||Do you secure web applications from SQL injection and cross-site scripting attacks? (Explain further in comments)|
Step 3: Identify key process controls
A mature organization establishes both written policies and a series of processes for maintaining a secure IT environment.
|Monitoring||Do you continuously monitor your controls to prevent cyber attacks? (Describe in comments)|
|Vendor Risk Management||Do you have a vendor risk management program?|
|Vendor Risk Management||Do you have clauses in your service level agreements about vendor cyber security? (List relevant clauses in comments)|
|Vendor Risk Management||Do you monitor your vendors’ cybersecurity? (Explain process in comments)|
|Incident Response||Do you have an incident response team?|
|Incident Response||Have you tested your incident response processes?|
|Business Continuity||Do you have a business continuity plan? (Explain further in comments)|
|Business Continuity||Do you incorporate DDoS and other cyber attacks as part of your business continuity plan?|
|Remediation||Do you have a process to remediate new risks? (Explain further in comments)|
|Audit||Have you had an IT audit in the last 12 months? (List any findings in comments)|
|Penetration Testing||Have you had a penetration test in the last 12 months? (List any findings in comments)|
Step 4: Identify key “people” controls
The final part of a vendor risk assessment questionnaire should identify employees in charge of certain controls across the company.
|Password||Do you have a password policy? (List password requirements in comments)|
|Authentication||Do you require multi-factor authentication?|
|Access||Do you limit access according to the principle of least privilege?|
|Training||Do you require workforce members to take a phishing training annually? (Provide documentation of completion)|
|Training||Do you require annual workforce security training? (Provide documentation of completion)|
How to use security ratings for vendor risk management (VRM)
Requesting information from vendors and providing questionnaires acts as the first step to a mature vendor risk management program. Our security ratings platform enables organizations to continuously monitor their vendor ecosystem across ten risk factors, including IP reputation, network security, DNS health, web application security, endpoint security, hacker chatter, leaked credentials, and patching cadence.
In addition, SecurityScorecard’s Security Assessments, makes the entire questionnaire management process easier and more efficient. Atlas – our security assessments – aligns questionnaire responses with SecurityScorecard Ratings, providing an instant 360° view of cybersecurity risk and automatic validation of responses, enabling companies to objectively pinpoint risk.
Vendor Risk Management FAQs
A vendor risk questionnaire is a tool that helps organizations spot potential threats and weaknesses that come from working with third- and fourth-party vendors.
A risk assessment questionnaire, also known as a third-party risk assessment questionnaire, is a set of questions that businesses can ask and present to vendors to better assess the vulnerabilities or potential cyber threats present within a company. These questionnaires help eliminate any unknown vulnerabilities as well as better understand the security posture of each vendor before beginning to work together.
A security questionnaire template is a pre-set list of questions used to gather information and insights about the security practices, policies, and infrastructure of a third-party vendor. Security questionnaires are most commonly used in cybersecurity assessments, audits, and vendor evaluations to assess the security posture of an entity.
There are a variety of risk assessment questions to include and consider when reviewing third-party vendors. Here are a few examples of questions to include within a risk assessment:
Alongside an assessment of risk, you’ll want to ensure that your vendor risk questionnaire includes questions that cover your entire threat landscape. Your vendor risk questionnaire should include questions that correspond with the following key topics:
- Information security
- Physical security
- Control security
- IT environment security
- Data privacy
- Compliance management
Working with vendors is inherently risky, and is a leading cause of many data breaches. Without monitoring for such threats, you leave your organization open to data breaches or other forms of cyberattack that could cost millions.