Vendor Management: Are You Doing all of the Right Things?

In the not-so-distant past, organizations let service providers connect to their internal networks without a great deal of concern. At that time, attackers could generally find a more direct route into business networks, and although the security vulnerabilities inherent in 3rd party connections to networks were known, they received much less attention by users and regulators alike than they do today.

Now, networks are very much better protected, especially those segments that directly face the Internet. Their improved outer armor has forced attackers to come at networks in more indirect ways, such as through trusted service provider connections. Attackers reasoned that if your target’s outer security is just too good, maybe concerns such as the company that hosts their operating software suite is not so robust. Their reasoning proved to be correct. In fact, this attack vector worked so well, that governing bodies have had to tighten security requirements accordingly.

In the present environment, organizations such as financial institutions and medical concerns must be able to demonstrate due-diligence in their establishment and maintenance of vendor/3rd party relationships. They should always remember that they, as the parent organization, are ultimately responsible for the security of their client information; it doesn’t matter if the security breach originated with the service provider or not. Without mechanisms such as documented due-diligence processes, contractual security agreements and cyber-insurance policies, organizations can be left to shoulder the burden alone.

This trend toward vendor management security, and indeed toward more stringent information security regulation across the board, shows no signs of slowing. Quite the opposite. In 2017, 240 cybersecurity-related bills or resolutions were introduced in 42 states. In 2016, 28 states introduced cybersecurity-related legislation; 15 of these states actually enacted the legislation. In 2015, the numbers were 26 states and eight pieces of legislation enacted. Quite an increase in just a few years.

All of this regulation is having a direct effect on not only hosting organizations, but the businesses that provide services to them. Vendors are increasingly being asked to demonstrate the security of their cyber-systems and processes by both present and prospective clients. They must be able to show that their information security program is just as effective as that of the parent organization or no job.

The upshot of all of this is that NOW is the time ensure that your vendor management program meets all of the recommendations and regulations that are currently emerging. Playing catch-up is never a good idea.

First of all, the program should be based on risk. An assessment should be performed to identify risks to the organization associated with the use of 3rd party providers. Once that information is in place, a framework of policies and procedures designed to address these risks should be developed and implemented. Responsibilities for undertaking these tasks should be assigned to individuals, and of course, the whole program should be fully documented and maintained. Senior management should monitor the program to ensure that it is being implemented as designed, and that it is effective in its operation.

Companies should ensure that contracts with service providers are clear, comprehensive and that information security requirements and responsibilities are fully defined for all parties concerned. Results of IT audits and security assessments should be accessible and reviewed at least annually. Any significant weaknesses or security problems uncovered by these assessments should be addressed, and the effectiveness of their remediation should be monitored.

So, don’t wait. Review your own vendor management program today and see if it meets all of the current and likely future requirements. Having a compliant program in place is not only good information security, but may even be the differentiator that gets your company a few extra clients.