This post was originally published by Abi Tyas.
Third-party risk management is important because failure to assess third-party risks exposes an organization to supply chain attacks, data breaches, and reputational damage.
To reduce the inexorable digital risks associated with vendor relationships, regulators globally are introducing new laws to make vendor risk management a regulatory requirement. This can include the management of sub-contracting and on-sourcing arrangements (fourth-party risk).
What is third-party risk management?
Third-party risk management is the process of analyzing and controlling risks associated with outsourcing to third-party vendors or service providers. Increasingly, the scope of vendor management extends to sub-contracting and on-sourcing arrangements to mitigate fourth-party risk.
This is particularly important for high-risk vendors who process sensitive data, intellectual property or other sensitive information.
This means due diligence is required to determine the overall suitability of third-parties for their given task and increasingly, whether they can keep information secure.
Due diligence is the investigative process by which a third-party is reviewed to determine if it’s suitable. In addition to initial due diligence, vendors need to review on a continuous basis over their lifecycle as new security risks are introduced over time.
The goal of any third-party risk management program is to reduce the following risks:
Read more here: www.upguard.com