With the amount of data generated every day, the importance of cybersecurity is ever-increasing as it encompasses everything that applies to protecting sensitive data, personal information, intellectual property, and industry information systems. With organizations relying more on third-party services, data security concerns arise as many of them have access to some essential assets of the organization, for instance, data storage.
The question of how to prevent cyber attacks occurs when private information is available to third-party vendors. The increase in cybersecurity demand increases more as individuals with proper skills and take up advanced cybersecurity program that can help you in preventing the cyber attack. The intellectual property of an organization getting into the wrong hands can result in a complete loss. With third-party services used by an organization, monitoring the cybersecurity risk of those services is essential. That’s where vendor security risk assessment comes in.
Getting the Basics Right
The cybersecurity concept is not that difficult to understand but can get confusing with different terminologies. Getting to know the basics helps lay a good foundation and further study in advanced third party. The terms asset, threat, vulnerability, and risk sound different but can complicate things when used together.
An asset can be people, intellectual property, or information, which can be tangible or intangible. Threat refers to something that has the potential to intentionally or accidentally exploit a vulnerability and is capable of obtaining or even damaging an asset. Vulnerabilities are weaknesses or loopholes in a security program that threats can use to gain unauthorized access to its installed system. Risk refers to the concept of the likelihood of loss, damage, or destruction of an asset resulting from a threat exploiting a vulnerability. One can get to know these terms with cybersecurity courses which helps you to understand the actual risk to intellectual property.
The Importance of Vendor Security Risk Assessment
Vendor security assessment helps an organization in determining the risks of using certain third-party vendor services. Many organizations’ common mistake is to overlook their vendors’ cybersecurity procedures and security risks, resulting in cyber attacks.
Purpose
Identifying organizational assets and the kind of data on them. Determining the value and assessing the threats and vulnerabilities and analyzing the probability and impact of a risk.
Conducting Risk Assessment
With some terminologies of the cybersecurity basics explained, understanding the formula used when conducting a risk assessment will be more straightforward,
A + T + V = R i.e., Asset + Threat + Vulnerability = Risk.
Risk is basically a function of threats that exploit vulnerabilities to obtain, cause damage, or even destroy assets. Thus, threats arise, but there is little to no chance if there are no vulnerabilities present. On the other hand, there can be a vulnerability, but there is little to no risk if you have no threat.
Risk Assessment in a Five-Step Process
- Asset Characterization
Start by identifying and ranking assets such that, if a product was damaged or lost due to security events, what could be the resulting adverse consequences. Here, two factors must be taken into consideration when ranking the assets. The severity or impact of the implications and the asset attractiveness, which is a factor of the degree of interest an adversary has in that particular asset. Ranking all the assets in such a way will help you generate a list of the organization’s attractive targets.
- Threat Assessment
Use the information collected to evaluate all the threat information collected from different sources and further identify the threat categories and potential adversaries. Assign a threat ranking to each adversary based on the assessment of the credibility of that adversary. Evaluating the threat attractiveness from an adversary’s perspective will help calculate the likelihood of a cyber attack.
- Vulnerability assessment
Scenario analysis can help in documenting an attackers’ potential actions and worst credible consequences. Further, evaluate the organizations’ security measures’ effectiveness by analyzing critical factors in the security design and protection layers and ranking each crucial asset’s potential vulnerabilities against applicable threats.
- Risk evaluation
Risk evaluation involves determining the level of risk to the organization or facility regarding the effect of a cyber attack on each critical asset. Based on the previous steps’ information, plot each scenario based on its likelihood and consequences. Prioritize each as per the relative degree of risk.
- Risk treatment
Conduct a countermeasure analysis to identify a shortfall between the existing security and desirable security. Use the cybersecurity concept of deterring, detect, delay, and respond to select appropriate measures to mitigate security risks. Prioritize the countermeasure options to assist the management in decision making for implementing these options into the process.
Vendor Security Risk Assessment
Coming back to vendor security assessment, many organizations resort to third-party applications and services and overlook the security risks every vendor may have. Many vendors handle sensitive information within the organization, from software development projects to data storage, access to almost everything. Vendors and suppliers come across a lot of sensitive information on a day-to-day basis. The assets being an organization’s intellectual property is of utmost importance to an organization and of the highest responsibility for the vendors and the organization to safeguard the data, the essential assets they have. Knowing how to protect the information is the primary goal of security risk assessment.
Handling third-parties as per ISO 27001
- Risk assessment
Coming back to cybersecurity topics, as stated in clause 6.1.2, you must assess the risk to the confidentiality, integrity, and availability of your information if you’re outsourcing your process, access to your assets or your information and data to any third party. Assessment is a crucial step, and if your data is exposed to the public, it could damage your assets and your organizational reputation. It could also be a complete loss if it is freely available in the public domain. Such thoughts occur when you perform a risk assessment. Then, based upon the evaluation result, one can further decide the next step in the process, the things you need to do to make sure that your data and assets are protected, and the types of safeguards you need to implement. Do a proper background check of the supplier and insert appropriate security clauses to prevent any adverse consequences.
- Screening (Control A.7.1.1)
Screening refers to the process of performing background checks of your potential suppliers, vendors, and partners. The thorough the inspections, the more it will help the screening process, but these checks must be done correctly. A lot of different techniques are available, which can be used in this process. However, there’s a limit to the auditing that can be done for the supplier’s environment. These need to be discussed with the different third-party suppliers, vendors, and contractors. Auditing their existing security policies, controls, and process helps, and the last time they got audited.
- Addressing Security within the agreement (Control A.15.1.2)
Addressing security is of primary concern and importance. When drafting an agreement, selecting the right type of clauses is essential. Knowing the risks that exist and the company’s situation for the chosen supplier or partner helps draft the appropriate security clauses in the agreement.
First, perform a risk assessment. Depending on the results obtained after the evaluation, put your safeguards and security clauses in place, which will be inserted in the official agreement you will have with the vendors. You can add clauses such as safeguarding, access controls, and awareness training on the vendor side to ensure that your vendors’ employees are well trained in terms of information and cybersecurity. Propositions of specialized practices or changes to processes like encryption can be made for the data they are dealing with to avoid information loss.
- Access Control (Control A.9.4.1)
Having an agreement with a third-party vendor or supplier does not give them access to all of your data. It is very crucial to ensure that each vendor is given the least privileges and can access only the assets containing processes, workflows, and scope they are responsible for, as it will help safeguard the organization’s information. Ensuring the implementation of proper access controls, and the number of privileges given to the third-party suppliers and vendors. In some cases, if a vendor needs privileged access to something, document those things. Implementing a change management process will be helpful for the organization making it easier to adapt to changes.
- Compliance Monitoring (Control A.15.2.1)
Even with all the security concerns being flagged, not all suppliers and vendors will comply with all the security clauses set in your agreement, but that’s not always the case and rarely happens. However, it is essential to monitor and audit whether your supplier or vendor complies with all the clauses and safeguards they have agreed to when signing the contract with you to safeguard your data.
- Agreement Termination
When terminating an agreement with any third party when it has ended, make sure that all of your assets are returned to you. All access to any assets have been revoked, and privileges are removed from the vendor’s side. These are essential termination clauses. The agreement termination process must have a step-by-step procedure.
Conclusion
Vendor security risk assessment helps every organization and must be taken seriously in this day and age. Taking these steps into consideration will help a lot in the process risk assessment of any third-party vendors’ security. The results will help organizations make the right choice when hiring a third-party vendor or planning to use any of their services for your organization.
This process may not seem like a one size fits all approach, and it isn’t, but these suggestions can be considered and will come in handy when performing a security risk assessment for vendors. Other add-ons and steps can be implemented in this process, which will help your organization benefit the most. The situations might differ for different organizations and work environments depending on the types of controls, supply security policies they apply to their processes and workflows. Understand the utmost importance of your vendor and scope, figure out the most appropriate approach for your organization or work environment, and implement the security assessment process accordingly.
