Vendor Risk Management Consulting
Your customers trust you with their information. Create a vendor risk management program that supports that trust.
Third-party vendors can make or break your privacy program
Third-party vendors are critical for businesses these days. They make your operations more efficient and deliver valuable services to your customers.
But each one brings significant privacy risks to the table. Information moves between businesses and across borders quickly. Do you know who has access to it and how they’re handling it? After all, you’re liable for what happens.
You need a vendor risk management process in place to protect your interests – and your customers.
No one wants to get in trouble for something they didn’t do
Completing due diligence with your third-party agreements is crucial. Without it, you risk operational, financial, and reputational damage if something goes wrong with your vendors.
Red Clover Advisors is your solution
Red Clover Advisors has been making privacy practices simple and straightforward for clients since Day 1. We assess, develop, implement, and maintain custom strategies for clients that bring results without the substantial expense of hiring in-house.
Looking for a roadmap? We can draft one for you and then let you take the wheel. Prefer to have a guided tour – i.e., full implementation and ongoing support – to get you there? We’ve got you covered.
FAQ
What is vendor risk management?
Vendor risk management – also called vendor management or third-party risk management – is the process businesses go through to identify the companies, organizations, and providers that deliver a service or product to your organization or customers on your behalf.
Because of the interconnected nature of global supply chains and the flow of data, you need to know who has access to what information, how it’s being used by the vendor, and how it’s being protected. The goal behind vendor risk management, from a data security perspective, is to build a fully comprehensive plan and process that assesses and tracks vendor relationships and contracts; identifies and reduces risks; and tracks compliance requirements and metrics.
What is a vendor risk assessment?
You can’t have vendor risk management without a vendor risk assessment. This assessment process helps businesses analyze their relationships – whether new or ongoing – to better understand the risks they might pose to them or their customers.
Your process should follow a standardized checklist for each and every potential vendor. Any vendor risk assessment process should include the following pieces:
- Risk level identification
- Vetting and due diligence
- Establishing contracts
Assessment should take place before onboarding new vendors, but also throughout the duration of your relationship. For ongoing vendor relationships, you should have a vendor risk assessment that takes place on an annual basis, including data inventorying, questionnaires, and contract reviews.
What’s the difference between third- and fourth-party vendors?
A third-party vendor is an organization, entity, business, or person you’ve entered into an agreement to provide a service or product on your behalf.
But even vendors have vendors, also known as sub-processors in the world of GDPR. You don’t have a direct relationship with them nor do you have a contract with them specifically. However, they are relevant to your risk assessment nonetheless. Via your third-party vendor, fourth-party vendors end up with access to your data – and your clients’ data.
And if they experience issues, it can impact your business operations and your clients’ security. These problems can be as temporary as a service outage or as impactful as a data breach.
Either way, you need to know that these vendors are doing their part to stay compliant.
Do I have to implement a vendor risk management process for all my vendors or just the most critical ones?
In an ideal world with unlimited resources, you would want to monitor all of your vendors.
However, this isn’t always feasible. If you have limited resources for a vendor risk management program, it’s important to assess which vendors pose the greatest security risk. From there, you can start monitoring the vendors that are most critical.
However, it’s important to be exceedingly thorough when making these determinations. Security threats come from many corners, often the ones that we don’t suspect.
What standards should my vendors meet?
This is almost entirely dependent on the industry that you work in. If you’re in the medical field, you’ll want to ensure that your team is HIPAA compliant; if you’re in the financial industry, you’ll need to ensure that you’re meeting OCC guidance, PCI compliance, and more.
To ensure that your vendors are meeting standards, your lawyers and IT department will work together to define:
- What sensitive information is
- What compliance and regulatory measures your vendors need to meet under GDPR, CCPA, and any other applicable privacy laws and regulations
- How to determine if they’ve met those standards
Investing in your vendor risk management program is good business
Third-party vendors are an important part of your business. Working with experienced information security professionals can help you focus on the job you’re passionate about while building a strong security protocol around your vendors.
Give your customers the privacy they deserve. Reach out to our team at Red Clover Advisors today to start with your free consultation.
