The external risk environment is changing quickly as massive and costly cyber attacks -- Home Depot, Boston Medical Center and the Department of Veterans Affairs, among others -- have struck in the past couple years, continuing to challenge organizations to re-think approaches to vendor risk management.
Protiviti and Shared Assessments released their annual Benchmark Study on Vendor Risk Management. The study's key findings include:
1. Organizations in all industries are making progress in improving how they manage vendor and third party risks.
2. The level of the board's engagement in information security correlates with vendor risk management maturity.
3. A majority of companies plan to de-risk third party vendor relationships that pose high risks.
These same concepts were discussed previously at Cybersecurity Chicago, during the Keynote Panel: Rethinking How to Build Trust in the Vendor Ecosystem with Fawaz Rasheed, Trustmark's CISO, and Matt Dechant, CISO at Tempus.
Vendor risk management is showing modest improvement
Executing a formal vendor assessment process has shown the most dramatic year-over-year improvement. Fawaz Rasheed commented at the Cybersecurity Chicago Conference that when using spreadsheets before, he found he was putting more bodies at the problem. “Instead of having 2-3 people chasing spreadsheets, we lowered our footprint of resources and shifted to a solution that’s more automated; one of the reasons why ThirdPartyTrust was the perfect fit for us.”
Companies are making headway in efforts to managing risk, with organizations where the board is highly engaged in information securiy leading the way.
Board level engagement has improved significantly
Although there has been a significant improvement in board level engagement since the study began in 2014, less than 30 percent of boards are highly engaged with issues relating to third parties. There is an “engagment gap” in that boards are more engaged with the organization’s internal cybersecurity risks rather than cyber risks to the organization’s vendors. If a vendor experiences a breach, the organization can also suffer negative repercussions.
De-risking third party relationships that pose high risks
Matt Dechant, CISO of Tempus, shares at the Chicago CyberSecurity Conference, “Finding the right way to find good measurements [to assess vendors] is critical. The business always carries the risk, so you have to trust and verify your vendors regularly."
A majority (53 percent) of organizations expect to exit or change relationships with vendors due to heightened risk levels -- fourth party or aggregated risks being the primary reason. Cost concerns associated with assessing vendors and lack of internal expertise to evaluate vendor controls were also cited as driving factors.
Anders Norremo interviewed by ISACA representatives at the Cybersecurity Chicago Event
Identifying fourth party vendors, tracking and scaling vendor risk management is difficult and often, an organizational challenge. ThirdPartyTrust's platform automates the vendor risk management process from start to finish and provides reporting and analytics, so you can map out trust within your vendor ecosystem. Inquire with us as at firstname.lastname@example.org.