Most organizations collaborate with vendors to reduce costs or create more efficient business operations. When an organization partners with a third party, there is often a great deal of confidential data that is shared with that vendor, and potentially to external parties. For this reason, vendor risk management is a highly important security topic that firms should account for in a security initiative.
Vulnerability risk management is the process of evaluating vendors prior to establishing a contract of the potential risks that an organization faces when transferring information and/or allowing a vendor to store your organization’s sensitive information.
If the personally identifiable information (PII) of your customers is accessed through your vendor network by hackers, it can cause legal, financial, and reputational risks for your organization. As such, organizations should get ahead of the risk and create a strategy that accounts for specific vendors with whom your firm works.
The strategy should outline:
- What type of data you’re sharing with the vendor
- How you are sharing that data
- Who has access to this data
- How that data will be stored
- How that data will be destroyed
- How frequently the auditing process takes place