Today we live in a very disruptive environment. Global health systems have been threatened and the rise in threats have highlighted how we should safeguard our data and systems. Third parties are redefining how businesses compete in this new digital world.
Organisations are becoming more reliant on third parties. This means that these third parties are accessing an organisation’s most valuable assets. They are also turning to the support of their own third parties. The result of this has been that the complexity and size of our third-party networks are multiplying on a daily basis.
In the last four years, compliance leaders have listed third parties as high risk 2.5 times more. This means that businesses have to stay ahead of growing third-party risks in 2021. This year, it will be a challenge for leaders to manage third party risks without restricting business growth.
In this post, we take a deep dive into the key priorities for vendor risk management this year.
Make use of your analytics for compliance management
Security leaders predict that the compliance functions in organisations will make more effective use of technology and analytics. This is to ensure real-time monitoring and to pre-empt compliance issues.
More than 80% of leaders admit that their organisations identified third-party risks after initial onboarding and due diligence. This suggests that a traditional approach to vendor risk management fails to capture new and evolving risks.
The future of compliance, therefore, needs to get better at foreseeing issues and compliance hotspots. This is the only way to mitigate vendor risks before they pose a threat to your operations.
The benefits of a mature data analytics approach to identify and prevent compliance issues are many. One of the key priorities, here, is to adopt technology that allows data analytics to support compliance and vendor risk management.
Use technology to quantify security risk and performance
The pandemic has radically changed the face of global business—this we know.
We also know that 2020 was no stranger to third-party data breaches. These changes are, however, changing the regulatory frameworks that were in place before.
71% of organisations are reporting more vendors in their third-party network compared to three years ago. Organisations must utilise new approaches in third-party risk management to account for all the ways they are reliant on third parties in their operations.
A cyber risk rating score can provide real-time insights to identify and solve compliance and risk management challenges. Such technology can quantify risks and generate objective reporting on a company’s security risk.
There’s another indirect benefit of using such technology—you can enhance stakeholder confidence. This means that stakeholders can view and understand an organisation’s security posture in this new security risk landscape.
Make the appropriate internal changes to your organisation
Another key priority of vendor risk management is how organisations are focussing on driving their security strategy internally. Vendor risk management cannot succeed with just installing the right technology. You must also make the right structural changes.
One way organisations are prioritising this change is by building joint teams made up of procurement, security, privacy, and legal experts for vendor risk management. This type of holistic and cross-functional approach to vendor risk ensures that you’re not inheriting unnecessary risks from vendors.
By embracing a collaborative approach, you make vendor risk management a collective goal.
Adopt a futuristic approach to vendor risk management to ensure security compliance
Businesses must adopt a multi-faceted and risk-based approach to cybersecurity. We must look at the mistakes made and the lessons learned before implementing any strategies for vendor risk management.
Real-time monitoring, technology, and collective effort can help your organisation stay ahead of risks.
Get in touch with RiskXchange today and explore how you can integrate our security ratings into your strategy. Contact our team to get your FREE supply chain risk score.
RiskXchange is a company founded and led by recognised experts within the security industry. They have held leading roles in companies like IBM Security.