Business owners need to prioritise cyber security, both with their own team and third party providers. A third-party provider may offer goods or services to your company, do outsourced functions on your behalf or provide access to different services.  While a third party can strengthen your business, they can also be the weak link to your cybersecurity network.

Deloitte conducted a survey on 170 firms in 2016, and a whopping 87% of firms said a third-party provider had disrupted their operations. Whether you outsource a consultant, lawyer or manufacturer – you need to be careful about who can access your company network. Third parties can leak employee and customer data, financial information and disrupt your supply chain. It’s essential for companies to manage this risk and closely monitor any third party providers. Invest in professional indemnity insurance to protect your company from any major disruptions. 

Cyberattacks are on the rise, and it’s more important than ever to protect your business’ data. Third-party vendors can open the door to your company system, intentionally or not, and leave you exposed to cumber threats. Here are a few ways you can manage third party risks and protect your business.

Update data map to include third parties 

Make a data map to identify and outline all the data your vendors have access to. You can see how they use this data and put agreements in place to enforce proper data management. If there is a leak, you can refer to this data map to see who had access to the specified data. 

Have a framework in place for third party risk

If you work with multiple vendors, you need to formulate a standard framework for working with third-party providers. You can apply this framework from the moment you start researching potential vendors to what you expect from them in return. You need to develop a high-level guide that outlines how you will handle third party risk in extreme detail. Make sure to review any vulnerability assessments and identify areas for improvement. 

Consider security ratings 

It can be challenging to monitor various vendors in large corporations. You can hire a company to evaluate your current and potential vendors to ensure you’re working with high-quality companies. A security rating system will streamline the assessment process and flag any high-risk vendors. However, the company hired to assess vendors is also a third-party provider and will need to be logged into the security system too.

Infographic created by Donnelley Financial Solutions, an SEC filing software company

Establish contractual standards

Both parties need to understand their obligations and the consequences if these obligations are not met. The contract should also outline how the contract will be approved, negotiated or terminated. 

Companies need to approach third-party risks with the utmost caution to protect their data and employees.

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