Cyber Risks and Solutions for Third-Party Vendors

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Third-party vendors are an important aspect of modern business. They enable the use of complex tools and connectivity within one’s firm, freeing up the client to focus on their core business. However, the use of third-party vendors does expose clients to added cyber risks. Due diligence has become a necessary part of doing business with or through a third-party vendor. As such, it is important that firms equip themselves with the tools needed to identify and remediate these potential threats.

How to Reduce Cyber Risks when using Third Party Vendors

When you outsource a key business process or piece of software to a third-party, their policies and procedures effectively become a part of your firm’s. It is important to consider that third-party vendors may not be meeting the cybersecurity standards set by a particular firm. In these situations, breaches can become possible through these third parties be it direct or indirect. Firms and their IT departments should consider best practices in reducing the risk of third-parties.

Verify Cybersecurity Protocols

One such way to reduce cyber risks is through the verification of your vendors’ cybersecurity protocols. A vendor’s cybersecurity monitoring should be up to your firm’s standards. Due diligence should be a firm’s utmost priority when working with third-party vendors that may be handling sensitive data from both customers and employees, such as financial information and PII.

Have a recovery plan in place

Having a plan in place for incident response is another necessary aspect of vendor due -diligence. If your firm’s integrity has been breached, including as a result of a breach of a key vendor, being able to respond at all levels of business will keep the risks of using third-party vendors to a minimum. With detailed incident reports, some risks may even be able to be eliminated in the future.

Outsourcing to a third party does not have to become a cybersecurity risk. Ensuring your cybersecurity and that of each key vendor, as well as implementing the right management programs, can help protect data and reduce the likelihood, or seriousness, of a breach.

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