Article -> Article Details
Title | Demystifying Third Party Risk Management |
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Category | Computers --> Security |
Meta Keywords | cybersecurity coe, centre of excellence hyderabad, cyber security hyderabad, cyber security telangana, Cybersecurity Incubation centre, Cybersecurity Academia and R&D Centres, cloud computing vs cyber security, cyber security challenges in india |
Owner | Cybersecurity |
Description | |
Organizations often collaborate with third parties to outsource certain tasks to experts. Even though partnering with outside organizations has its own set of benefits, it comes with its challenges too, the biggest being the security of the company data. Third Party risk management is extremely crucial for organizations to combat the perils when sharing access to your data with outside organizations. A Third-party risk management framework helps in gauging the risks involved when third parties such as vendors, suppliers, contractors, partners, etc. gain access to an organization’s confidential data and how it can be misused by them. The main goal of a tprm program is to alleviate the various possible risks due to the involvement of third parties in a firm. Why is third-party risk management important? Third-party vendors gain access to a considerable amount of your data which can have an adverse effect on cybersecurity. Regardless of the size of your organization, cybersecurity hazards remain, hence third-party risk assessment is extremely vital to secure intellectual property and other classified information. The process of tprm includes diagnosing, assessing, and curbing the potential risks involved when company data is shared with outsiders. Cybersecurity Risk: Danger caused to sensitive data due to cyber-attacks. One way to avoid cybersecurity risk is by performing due diligence before onboarding new third parties. Operational Risk: The risk involved when the business operations of the company are obstructed due to third-party organizations. This causes an interruption in business leading to delays in the ongoing project. Legal, Regulatory and Compliance Risk: The risk involved when third parties impact the compliance of the company with legal frameworks such as agreements, legislation, and regulations. Financial Risk: When the fiscal standing of the company gets disrupted due to third parties which can cause grave losses to the company. Reputational Risks: The risk caused by third parties which could have a detrimental effect on the organization’s reputation. Results could be poor customer service, below-average customer satisfaction, etc. Strategic Risk: The risk caused when there is a disruption in achieving the required objectives because of the incompetence of third parties. 1) Vendor Inventory Prioritization: Depending on the importance of the vendors in your organization, segregate the information based on the requirement of the project. This practice will ensure that you don’t give away too many vital details. To achieve efficiency in the tprm program, it is suggested to distribute the third-party organizers into specific tiers: Tier 1: High Risk 2) Automate as many processes as possible: To increase efficiency, automating the majority of the redundant tasks eliminates the maximum risks involved. TPRM frameworks are built differently catering to each organization’s requirements. In terms of automation, companies must identify key tasks which can be automated thus resulting in saving the company’s time, money, and resources. In the tprm program, multiple areas can be automated such as onboarding new vendors, suppliers, etc., sorting third parties into tiers, sending alerts, scheduling regular reports and more. 3) Move beyond cybersecurity risks: When an organization decides to involve a third-party organization, quite often they believe that the only possibility of risk would limit to cybersecurity. Though being agile on potential cyber risks is a good practice, companies must think beyond that. While architecting your tprm program, there are several other risks which can affect your organization such as:
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