Third Party Risk Management

What is Third-Party Risk?

Third-party risk encompasses the threats to a company posed by vendors and organizations in its supply chain that are connected to its network data. Cyber threats are one of the most significant forms of third-party risk, potentially leading to data breaches that can impact a company’s finances, operations, reputation, and compliance efforts. Many companies fall prey to this third-party cyber risk by wrongly assuming that their vendors have effective cybersecurity programs in place.

What is Third-Party Risk Management?

Third-party risk management is the practice of identifying and minimizing the risks posed by vendors, suppliers, partners, and other organizations in supply chain. Third-party cyber risk management typically involves assessing the security performance of each vendor against cybersecurity standards to determine which vendors to select, or to help existing vendors remediate their security issues.

Including cybersecurity requirements as early as the procurement phase of a vendor relationship, and continuous monitoring of vendors, are key to effective third-party cyber risk management. By constantly monitoring the security posture of vendors, companies can take steps to remediate security threats in vendor relationships or cut ties with vendors that represent the greatest risks.

The Challenge Of Third-Party Risk Management

Third-party vendors are essential to any business, helping to increase competitiveness, optimize efficient offerings, and achieve digital transformation. But as your third-party ecosystem continues to grow in size and complexity, managing the risk posed by third parties becomes increasingly difficult. In fact, studies show that 75% of companies who have experienced a breach report that the attacker accessed their network through a vendor, partner, or another third-party.

Consequently, it’s no wonder that your security leaders and vendor risk managers are constantly seeking new ways to improve third-party and IT vendor risk management. Traditional solutions like annual vendor assessments and questionnaires offer some value, but they can’t provide the continuous awareness your organization requires to ensure measurable risk reduction and achieve cyber resilience.

Bitsight for Third-Party Risk Management offers powerful solutions to meet this challenge. By measuring and continuously monitoring third-party security controls, Bitsight empowers you to validate vendor security performance with confidence while effectively communicating risk to your stakeholders.

Why Continuous Monitoring Is Essential

Third-party cyber risk is constantly evolving. The security posture of every organization in your supply chain may vary daily or weekly as new cyber threats appear. Yet, many organizations still rely on annual or semiannual vendor self-assessments to monitor third-party risk and may be caught off guard by threats and vulnerabilities that arise between assessment periods, or beyond the coverage of a typical assessment. Additionally, when working with hundreds or thousands of vendors, this manual approach to third-party cyber risk management is inevitably slow and costly.

Continuous monitoring, on the other hand, provides security managers with total visibility of the risk within the supply chain. Rather than reevaluating a vendor’s risk level quarterly or annually, continuous monitoring provides a real-time view of risk within the vendor ecosystem – including changes in a vendor’s security posture. As a result, security managers can take immediate action to remediate risk at any point in the vendor lifecycle, and don’t need to worry about missing a concerning vendor.

Automated, continuous monitoring is critical to third-party cyber risk management for several key reasons:

• Vendors have access to more data today. As enterprises and their third-party ecosystems become increasingly connected, vendors are more likely to have access to sensitive data – and at the same time, breaches caused by third parties are more likely to occur.
• Attacks play out faster than ever. Malicious actors can access data and wreak havoc more quickly than ever before. The scale and speed of threats requires third-party cyber risk management programs that can assess and respond to risk far more quickly than in the past.
• Risk managers must accomplish more in less time. As the enterprise’s vendor ecosystem continues to expand, risk managers are under greater pressure to do more with less. Continuous monitoring lets risk managers abandon time-consuming, manual assessments and rely instead on automated evaluations that can efficiently and proactively mitigate risk.

Additionally, security ratings can provide remarkable value. Based on externally observable data, security ratings offer an outside-in approach to continuous controls monitoring that requires no access to a vendor’s internal systems. With a superior security ratings solution, you gain continuous visibility into the security posture of your vendors, with real-time analysis that lets you identify and remediate risk as it happens. Continuous monitoring technology evaluates your entire vendor pool, so vendor risk teams are picking and choosing which third parties to evaluate and gambling on the rest.

Bitsight For Third-Party Risk Management

Bitsight pioneered the security ratings industry in 2011, creating the world’s first cybersecurity ratings platform and continuing to innovate ever since. Today, Bitsight is trusted by leading organizations around the world, including Moody’s Corporation as an invaluable partner in third-party cyber risk management.

Bitsight for Third-Party Risk Management provides continuous monitoring capabilities that allow organizations to make faster, more strategic decisions about third-party cyber risk management using the resources they have today. Bitsight immediately exposes cyber risk within the supply chain, helping risk managers to focus resources and work with vendors to achieve significant and measurable cyber risk reduction.

Bitsight helps security managers implement efficient processes for measuring risk throughout the vendor lifecycle. Rather than relying on yearly assessments or information reported by vendors themselves, Bitsight relies on Security Ratings to gain external insight into each vendor’s security posture and the riskiest issues they face.

Advantages of Third-Party Cyber Risk Management

Bitsight’s solution for third-party cyber risk management is built on the only independently verified continuous monitoring database. Bitsight provides risk managers with:

• Security ratings that are proven to correlate with risk of data breaches. Research has proven that a company’s overall Bitsight rating, along with their grades in certain risk categories, can reliably predict future security performance if current security posture remains unchanged.
• A clear picture of cyber risk aligned to risk tolerance. With a clear view of critical performance information across the entire portfolio, Bitsight enables risk managers to make confident, data-driven decisions to prioritize resources that drive efficient risk reduction.
• Personalized monitoring options. Bitsight enables organizations to select the best level of monitoring for each vendor depending on their closeness to sensitive company data, as well as set alerts for when a vendor hits a concerning change in their rating, promoting greater efficiency without overspending or underutilizing risk management technology.
• Faster vendor on boarding. By providing immediate insight into a vendor’s security posture, Bitsight helps reduce the time and cost required for onboarding, and also serves as a first line of evaluation for if a vendor should be considered.