What is Third-Party Risk?
Third-party risk is the potential threat to an organization posed by companies within its supply chain that are connected to the network. While there are many types of third-party risk, cyber threats may pose the greatest risk to organizations because many organizations rely on the vendor’s own cybersecurity processes. Third-party cyber risk includes potential data breaches due to vulnerabilities within a vendor’s IT environment and can lead to financial, reputational, and regulatory/compliance consequences.
What is third-party risk management (TPRM)?
Third Party Risk Management (TPRM) is the practice of continually identifying, analyzing, mitigating, and controlling risks associated with third parties. Effective TPRM programs allow organizations to accurately gauge vendor risk in a variety of areas, understand the risk of current and potential vendors, and take steps to mitigate risk by implementing protections, addressing concerns with vendors, and avoiding or ending vendor relationships that are considered too risky.
The connection between third-party risk and cyber security
In today’s highly interconnected business environment, third-party risk can have a huge impact on an organization’s cyber security posture and cyber liability. Enterprises increasingly rely on cloud-based services and outsourcing to accelerate speed to market and remain competitive. Because vendors and suppliers are often given access to sensitive data and high-value IT environments, a breach that starts with a third party can easily lead to a cyber security attack on the organization itself. In fact, a recent study reports that more than 90% of companies have experienced a data breach that originated within a third-party vendor.
To manage supply chain security, risk managers need extensive visibility into each vendor’s security performance and controls. Traditional solutions provide only a point-in-time snapshot of security posture that’s updated once or twice a year. Cyber threats evolve quickly and security posture can change daily, so organizations need a clear understanding of the risk within the supply chain on any given day.
Bitsight for Third-Party Risk Management delivers clear, up-to-date insight into third-party risk and cyber security issues. Built on data that correlates to potential security incidents, Bitsight’s solution helps risk managers to proactively mitigate risk by continuously measuring and monitoring the security performance of vendors.
How To Mitigate Third-Party Risk
As enterprises are more reliant than ever on outsourcing and cloud services, knowing how to mitigate third-party risk has become a critical priority. Risk incidents connected to third parties are at an all-time high, with 59% of organizations reporting that a data breach was caused by one of their vendors.
As a result, security leaders and risk managers are seeking better solutions for third-party risk management. Companies need strategies for accessing the value that vendors and third-party services provide, but without introducing unwanted cyber risk and unnecessary overhead. Traditional approaches to measuring third-party risk provide some help, but they don’t deliver the security visibility organizations need to prioritize resources and achieve measurable risk reduction.
Bitsight can help. Bitsight for Third-Party Risk Management provides tools for continuously monitoring the security posture of vendors to give risk managers a complete and trusted view into their risk portfolio. With Bitsight, risk managers can learn how to mitigate third-party risk through automated processes, daily-updated Security Ratings, and a clear picture of third-party risk aligned to the organization’s risk tolerance levels.
The Role Of Continuous Monitoring
Continuous monitoring has long been an effective tool for addressing cybersecurity risk. Many organizations have security operations centers that monitor the network 24/7 for attacks and vulnerabilities, enabling security teams to quickly identify threats and take action to remediate them.
However, effectively deploying continuous monitoring for third-party cyber risk assessment has been more of a challenge, as organizations lack clear insight into the internal operations, defenses, and security controls of their vendors as networks are rapidly expanding year over year. Instead, risk managers have relied on vendor self-assessments completed at regular intervals – often yearly – to evaluate the security posture of their organizations, leaving them blind to vulnerabilities that occur between assessment periods.
While this approach offers some value, it is limited by its subjectivity and frequency. Self-assessment questionnaires are inherently subjective, and risk managers can’t know how accurate a vendor’s assessment is without spending a great deal of time manually verifying their responses. Additionally, because assessments are completed so infrequently, they offer no help in continuously monitoring for third-party risk.
To implement a continuous monitoring program, third-party risk managers need objective, verifiable information about a vendor’s security posture on an ongoing basis. Fortunately, Bitsight Security Ratings can provide this information easily and accurately.
Bitsight For Third-Party Risk Management
Bitsight provides a leading solution for risk managers who want to know how to mitigate third-party risk with continuous monitoring. Bitsight for Third-Party Risk Management lets organizations continuously measure and monitor the security performance of their vendors. Rather than relying on yearly assessments or subjective information provided by vendors themselves, risk managers can use Bitsight’s industry-leading Security Ratings to get a clear and continual view of each vendor’s security performance.
Bitsight ratings are based on objective and externally verifiable data that reflects the cybersecurity posture of an organization. By measuring risk factors like botnet infections, out-of-date devices, TLS/SSL certificates, file sharing behavior, and publicly disclosed breaches, Bitsight issues a daily Security Rating that accurately reflects a vendor’s security posture and provides alerts when there are changes in a vendor’s behavior or status that the vendor themselves might not even be aware of.
With Bitsight’s solution for third party cyber risk assessment, risk managers get unprecedented visibility into their risk portfolio. They also get details on how to mitigate third-party risk for each vendor most effectively and cost-efficiently. Bitsight automates third-party assessments and security benchmarks, helping to ensure that vendors are complying with best practices and regulations such as PCI security standards.
How To Mitigate Third-Party Risk With Bitsight
With Bitsight for Third-Party Risk management, risk managers can:
- Take a proactive approach. With near real-time insight into the security posture of vendors, risk managers can measure changes in security ratings against established risk thresholds and conduct reassessments to prevent potentially unacceptable risk from being introduced into the third-party ecosystem.
- Customize assessments. Risk managers can tailor assessments to each vendor, spending more time and resources on the vendors or areas of a vendor’s operation that represent greater risk, and can choose to skip or spend minimal time on vendors with higher Bitsight ratings.
- Establish a tiered assessment structure. By tiering vendors according to level of sensitive data they will have access to, risk management teams can spend more time assessing vendors that pose a greater risk to their organization and less time on vendors who won’t cause much damage to the organization based on their business use-case.
- Provide objective context to self-assessments. Armed with data from continuous monitoring, risk managers can add objective context to the assessments completed by vendors to determine how accurate their answers are and whether their self-assessment truthfully reflects their security posture.
Bitsight for Third-Party Risk Management provides organizations with the capabilities they need to reduce third-party risk and mitigate third-party cyber security issues.
- Security ratings that correlate to risk of data breach. Research has shown that an organization’s Bitsight rating along with grades in certain risk categories can reliably predict future security performance and how susceptible they are to bad actors.
- Faster onboarding. Bitsight helps third-party risk management teams reduce the time and cost of onboarding vendors by quickly identifying known issues and quantifying risk with smart tiering recommendations.
- Enable the business. Bitsight makes it easy to bring on vendors in a timely way while summarizing and communicating the risk that’s associated with the vendor relationship.
- Reduce third-party and cyber security risk. Bitsight delivers a clear picture of risk aligned to each organization’s risk tolerance. Risk managers can prioritize resources to drive risk reduction across the portfolio of vendors, based on the risk-based tier a vendor falls into.
- Communicate risk to the Board and C-suite. Bitsight’s reporting capabilities make security performance understandable and accessible for individuals with non-technical backgrounds. Security and risk managers can quickly create custom reports on the fly or use built-in cyber security risk assessment report samples and templates.
Why Trust Bitsight?
Bitsight is the most widely adopted security ratings solution and is trusted by some of the largest organizations in the world to deliver a clear picture of their security posture. Since 2011, Bitsight has pioneered the security ratings market, transforming the way that companies evaluate third-party risk and their own security performance. Through continuous monitoring and assessment – including attack surface monitoring, cyber risk monitoring, and cloud security monitoring – Bitsight enables organizations to make faster and more strategic decisions about cyber security and risk management.
Bitsight is the choice of 25% of Fortune 500 companies, 4 of the top 5 investment banks, and all 4 of the Big 4 accounting firms. Additionally, Bitsight is trusted by 20% of the world countries to protect national security, and is used by 40+ government agencies, including US and global financial regulators.