7 Tips for Successful Third-Party Risk Assessments

BLOG 2 MINS January 15, 2021
7 Tips for Successful Third-Party Risk Assessments

Organizations want to ensure their third parties safeguard their data and maintain compliance. This is why conducting third-party risk assessments is essential to understand if your vendors have appropriate security and privacy controls in place.

But where does an organization start in the assessment process? How does an organization measure the success of their third-party risk assessments?

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In this blog, we’re outlining 7 tips for successful third-party risk assessments.

  1. Audit your existing program to identify third parties that haven’t been assessed. Compare your vendor inventory to the list of vendors in your accounts payable department. Double-check that you haven’t accidently skipped over a vendor, especially one that’s high risk. A good way to generate a comprehensive list is to go department by department (e.g., marketing, sales, finance, HR, etc.) to identify all vendors in use.
  2. Tier third parties based on business impact and associated risk. Is a third party essential to operations, or is it non-critical? This tiering can help you determine which third parties should be assessed first and at what lengths. Understanding the context for how a third party is used can help you prioritize. In the event your third-party risk assessments prove a third party to be high risk, you will want to take appropriate action, which may include controls testing or an onsite audit.
  3. Maintain a consistent and repeatable approach. The third-party risk assessment process is one that can be standardized and automated. Think through your processes and develop your step-by-step procedures. From there, take practical steps to automate certain stages of the workflow. Common areas for automation include the intake of the vendor, the assigning of risk owners, and the triggering of reassessments based on contract expiration dates.
  4. Conduct third-party risk assessments for not only the vendor product, but the vendor service. To fully understand the risk a vendor poses, an organization must evaluate both the product as well as associated services.
  5. Ensure third-party risk assessments are conducted throughout the engagement lifecycle. An organization’s work doesn’t stop once a vendor is onboarded. Consistent monitoring of vendors is essential in today’s shifting landscape. Configure automation triggers based on events that introduce or increase risks. These events may be a change in how the third party is used, the detection of a data breach, or a negative news story.
  6. Stay abreast of regulatory requirements. Ensure your third-party risk assessments incorporate the most up-to-date regulatory compliance requirements. This is a constant challenge, but keep in mind that once a third party completes an assessment, they don’t need to start from scratch. Make any changes to the assessment that are necessary and provide the third party their previously completed assessment. From there, a third party only needs to review old answers, make any adjustments, and answer only the new questions.
  7. Ensure board involvement and awareness. Risk management requires top-down involvement, so make sure your board and leadership team are made aware of significant third-party risk assessment requirements. Make the case for greater budget to deploy a dedicated solution by outlining areas for improvement and potential risks.

Answering and distributing third-party risk assessments is cumbersome and time consuming when leveraging spreadsheets and disparate email communication. If you’d like to streamline your assessment process further, while still incorporating all the best practices above, leverage the Vendorpedia Third-Party Risk Exchange to get access to a community of pre-completed vendor risk assessments.

Further third-party risk assessment reading:

Next steps on third-party risk assessments:

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