Third party risk may sound like it’s not your problem, but in reality, it reflects on you and your organization whenever a vendor fails to live up to your industry’s security and compliance standards. Anytime you engage a vendor, you are bringing on board an added regulatory burden in addition to whatever capabilities or services you’re buying.
Let’s take a closer look at third party vendor risks and how the right MSP can help minimize them with the right vendor risk management capabilities.
Vendor Risk is Real, and Ongoing
Third party engagements expand your compliance responsibility along with the capabilities or materials that the vendor relationship may bring. Indeed, longstanding research from McKinsey shows financial institutions, in particular, are being held responsible by regulators for the actions of their suppliers.
Adding to the challenge, the shared responsibility model for most “XaaS” models means that even if your vendor is doing everything right, how you manage assets with that vendor can still get you into compliance trouble. For example, your SaaS vendor may be responsible for application security, but you remain accountable for any data or workload misconfigurations or breakdowns in network or endpoint security.
The risks are real and ongoing. In fact, Gartner reports more than 80% of legal and compliance leaders experience third party risks cropping up after initial onboarding and due diligence. This underscores the need to capture both new and evolving risks as the organization and its vendors adjust activities and relationships to respond to changing business conditions.
How an MSP Addresses Third Party Vendor Risk
Unfortunately, the work of maintaining rigorous vendor due diligence for ongoing risk management analysis is too overwhelming for most organizations to do on their own. That’s why an effective approach to third party risk management invariably requires the assistance of a qualified MSP partner.
The right MSP partner can transform an organization's relationship with vendors from one of poor visibility and unknown risks, into a proactive and transparent operation that gives C-suite executives and IT leaders holistic control of all factors across the vendor ecosystem that may impact compliance. Such a partnership can include customized risk assessments with a targeted and specific analysis of what can go wrong, and where.
The right MSP can combine rigorous up-front vendor due diligence with ongoing, real-time visibility into where and how threats evolve as vendor relationships and operational conditions change over time. Ongoing monitoring is also employed to verify vendor compliance and credentials like SOC assessments and industry certifications, with actionable reports to inform both clients and vendors of what’s wrong and how to fix it.
Finally, remember the shared responsibility model and that vendor due diligence must be augmented by your own process and workflow optimization efforts. The shared responsibility model means you have a critical need to configure and manage all vendor services securely and compliantly while also supporting ongoing client-side support for IT security configurations, workflow process optimization and cybergenie for the workforce. Third-party risk management compliance requires success on both the vendor and client, and IT and human side of the equation, and the right MSP has you covered on all these fronts!
