Cyber threats involving third party suppliers are today rapidly increasing. Thus, a good ‘supplier security risk management’ is a must.
The Importance
Supplier connections are very important in one’s business. It keeps the business running. Moreover, it enables business’ profitability to improve. And it can help businesses of all sizes to minimize costs.
However, it is undeniable that more connections also mean more risk exposures. And these days, the number of cyber-attacks are third-party related.
Yet, not every company implements these regulations on their own business. Some may be negligent enough to face these threats. A study way back in 2019 reports. That only 40% of businesses have such security management.
That means to say, that the rest of it or the 60% have neglected this security measure. Could they be the ‘small businesses’? Maybe.
But, whatever your business size is. You must be on guard against this. Cybercriminals love ‘negligent’. It is easy to corrupt. No enough firewalls to protect. Threats can easily crawl under and deploy attacks.
So having assessments keeps you ahead of the game. It helps you see the overview of the situation.
- Where do the risks come from?
- Where could these possibly make way?
- What is the business’s vulnerability status?
- How can the business take action for prevention?
This is especially critical when handling information. Since most of the security attacks today concern data breaches.
Risk Management
Definition:
It is the procedure of analyzing and controlling potential threats or risks.
What does it do to your business?
Risk management affects your business’ data and operations. But, most of all, your company’s finances.
Risk can be of all sorts. These risks may come from:
- Business Partners
- Customers
- Joint Ventures
- Counterparties
- Third-parties or Vendors
So the objective of a Supplier Security Risk Management is this.
It aims to mitigate the risks. And lesser the threats that may be coming from your suppliers (a third party). Most especially, that these third parties do provide services and products to your customers.
On the other hand, supplier security risk management also helps in financial control. Since this is at risk with uncertainties. Also with possible disruptions in connection with these third party suppliers.
The Types of Risks
Cybersecurity Risk
One of the most common risks today is cybersecurity risks. Especially today, when dependencies increase on third-parties remote access. This poses more cyber risks to the company.
Of which may include:
- Malware attacks
- Email phishing
- Ransomware
- Spam
- Cyber hacks
Compliance Risk
This happens when a company violates local, national, or international laws. This is concerning business’ standards, policies, and procedures.
Thus, entities should be concerned and knowledgeable enough with these standards. Since these standards may vary depending on one’s country or region.
The following are examples of such regulations:
- PCI DSS
- GDPR
- HIPPA
- OCC
Strategic Risk
This happens when your suppliers do not follow your business strategies. This will then fail business decisions.
Thus, it is important to conduct assessments beforehand. This is to aware of your supplier’s adherence to laws. Most importantly, with cybersecurity risks.
