How do you handle vendor incidents and breaches?

The purpose of a vendor risk management policy is to identify potential risks and vulnerabilities that may arise from these relationships and implement measures to reduce or eliminate them. Risk assessment is the key ingredient here as it helps evaluates the vendor's ability to meet the organization's standards for security, data protection, and compliance with regulatory requirements. Most importantly, it helps to protect the organization from potential financial losses, reputational damage, and legal liabilities that may result from vendor-related incidents.

The vendor risk management policy can not anticipate every risk scenario with vendors and should be considered a high-level guideline.

Vendors should be treated as family. Investing the time and financial investment to understand each party’s values and align them so that a consistent quality culture transcends the customer is critical. The services of local vendors must share the same culture as you represent to your customers or clients. One way to do this is by utilizing professionally administered deep-dive organizational assessments. Doing so will significantly diminish the possibility of falling prey to the abovementioned risks. Assessments of this nature are readily available and are not expensive to administer.

Always have legal and fiscal coverage signed into contracts with any vendor to cover breaches. Many state and federal laws mandate multiple obligations in case if data breaches and you need to cover all bases.

Organizations should put governance and focus on creating practices to understand the risk associated while managing vendors. There are several reasons why such a policy is important: 1. Reputation Management: We forget that an incident due to a vendor can also damage an organization's reputation, resulting in loss of customer trust and business opportunities. 2. Data Protection: Know what data is shared and how is it protected e.g. PII, financial data, or even trade secrets. 3. Regulatory Compliance: Organizations are subject to various regulations such as GDPR, HIPAA, and PCI-DSS, which impose specific requirements on the protection of sensitive data. 4. Mitigation of Financial Loss due to all of the above.

Creating and administering a legal agreement that all vendors sign addresses the expected behavior mentioned above is essential.

The most important factor while creating a vendor risk management policy is to ensure that it aligns with the organization's overall risk management strategy. This means that the policy should be designed to address the specific risks associated with the organization's vendors and the services or products they provide, while also taking into account the organization's risk appetite and tolerance.

One thing I have found very helpful is to offer periodic training sessions that address all of the processes and procedures listed above.

Always have legal and fiscal coverage signed into contracts with any vendor to cover breaches. Many state and federal laws mandate multiple obligations in case if data breaches and you need to cover all bases. All training and legal acknowledgments that your employees go through should be compulsory for vendors too. Plan for the worst. Data breach is no joke nowadays and are business destroying incidents and should never be taken lightly.

One of the challenges faced when implementing vendor risk is the collection of data. You must be able to present the data and reports to all stakeholders in order to get buy in on any new or updated changes to the policy.

In certain situations, having the vendors cross-trained is a good idea when more than one vendor would be on the job simultaneously with others. An example could be mainly for recommended trade companies where various vendors will be on the assignment simultaneously as others.

Data collection from the vendor is vital as it helps to identify the vendor touch points and assess the impact on the business. The data collection will also identify gaps or findings and policy exceptions.

A common use case is in the financial services industry. Financial institutions, such as banks and insurance companies, often work with third-party vendors for various services, such as IT support, data management, and customer service. For example, a bank might engage a third-party vendor to manage its customer data. The bank would need to ensure that the vendor is complying with data protection regulations, such as GDPR or CCPA, and has adequate security controls in place to protect this sensitive data from theft or unauthorized disclosure. To address these risks, the bank would need to implement the following: -Risk Assessment -Due Diligence -Contractual Obligations -Ongoing Monitoring of vendor activity -Incident Response Plan

Buy-in is critical for all parties involved, including the client or customer. Once a client or customer realizes the coordination of vendor services, they will greatly appreciate the professionalism and the great degree of concern rendered to create the best client-customer experience possible.

Those that fail to plan, plan to fail. The entity must have a well defined TPRM plan. Stakeholders should include cross functional contributions from, research, legal, technical expertise, procurement, financial, and business. All points should be considered thru the risk model with weighted decision and criteria that drive past the vendor's sales and marketing claims to evidenced points during diligence. Performance and maintenance measures must be stated within the final engagement contract that should reference all TPRM findings from the entire TPRM process.