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Third Party Risk Assessment

Beyond your control: Reviewing the risks of Third-Party relationship

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Third Party Risk Assessment is the process of evaluating and managing the risks associated with third-party vendors, suppliers, and contractors that have access to an organization's sensitive information, systems, or networks.

The "third-party" can be any external entity that has access to the organization's data or networks, including software vendors, cloud service providers, payment processors, and other business partners.

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The process of Third-Party Risk Assessment involves the following steps:


  • Identification of third-party vendors: Organizations must identify all third-party vendors who have access to their sensitive information, systems, or networks.
  • Risk assessment: Organizations should evaluate the risk profile of each vendor, based on factors such as the type and sensitivity of data they have access to, the nature of their services, and their security practices.
  • Due diligence: Organizations should conduct a thorough due diligence process to assess the vendor's security controls, policies, and procedures. This may include reviewing the vendor's security certifications, conducting security assessments, and requesting documentation related to security practices.
  • Contractual agreements: Organizations should establish contractual agreements that outline the vendor's responsibilities, obligations, and liabilities in the event of a security breach or incident.
  • Ongoing monitoring: Organizations should continually monitor their third-party vendors' security practices to ensure that they continue to meet the organization's security requirements.

Approach and Methodology for Conducting Third Party Risk Assessment:

  • Identify all third-party vendors that have access to their sensitive information, systems, or networks.
  • Evaluate the risk profile of each vendor based on the nature of their services, the type and sensitivity of data they have access to, and their security practices.
  • Conduct a thorough due diligence process to assess the vendor's security controls, policies, and procedures. This may include reviewing the vendor's security certifications, conducting security assessments, and requesting documentation related to security practices.
  • Establish contractual agreements that outline the vendor's responsibilities, obligations, and liabilities in the event of a security breach or incident.
  • Continuously monitor their third-party vendors' security practices to ensure that they continue to meet the organization's security requirements.

Conducting Third Party Risk Assessment offers several benefits to organizations, including:

  • Improved security posture: Conducting third-party risk assessments enables organizations to identify security risks and vulnerabilities that may be present in their vendor ecosystem. This information can be used to strengthen security controls and mitigate risks to the organization's sensitive information, systems, and networks.
  • Compliance with regulations: Many regulatory frameworks require organizations to assess the risk posed by their third-party vendors. Conducting third-party risk assessments can help organizations comply with these regulations and avoid penalties and fines.
  • Protection of sensitive data: Third-party vendors often have access to sensitive information about an organization's operations, customers, and employees. Conducting risk assessments can help organizations ensure that their vendors are implementing adequate security controls to protect this information.
  • Better vendor management: Third-party risk assessments can provide valuable insights into the security practices of vendors. This information can be used to develop and maintain better vendor management practices and improve the overall quality of vendor services.
  • Enhanced reputation: Organizations that prioritize security and demonstrate a commitment to protecting sensitive information can enhance their reputation with customers, employees, and stakeholders. Conducting third-party risk assessments can be a critical component of this effort.

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FAQs

A Third-Party Risk Assessment involves evaluating the vendors, suppliers, or service providers to see what risks exist as it relates to their security, compliance and operations. It helps to ensure that external partners won't create additional vulnerability within your organization exposing it to threats or regulatory scrutiny.

Today, organizations expose themselves to cybersecurity breaches from External parties/ External Sources in a reputation, legal, and financial context. For instance, If a vendor gets breached, it could result in data loss, possible fines, or harm to reputation. A Third-Party Risk Assessment allows organizations to satisfy compliance related to GDPR, RBI or PCI, protect sensitive data, maintain customer confidence, and reduce total cyber risk.

We have a structured process that begins with identifying all third-party vendors and the services provided by said vendors to set the scope, determining their risk exposure, conducting a due diligence assessment, and reviewing contracts, and security controls. We then provide ongoing monitoring so organizations can remain aware of their vendors' security posture and compliance status.

A well-executed Third-Party Risk Assessment strengthens your cybersecurity resilience, reduces chances of data breaches, and ensures you stay aligned with regulatory requirements. It also improves transparency and builds stronger, more reliable relationships with vendors and partners.