We all know that doing business implies risks and that it is crucial to mitigate the risks in order to sustain the business. There are risks that can be controlled and others that are unfortunately not. However, all organisations can set up measures and plan to mitigate risks and act accordingly.
In a previous article, we reviewed the importance of implementing a supplier security policy in order to mitigate risks related to suppliers. In this article, we review the importance of conducting a third party risk assessment, which is wider vision of risks that can be introduced to your organisation via third parties.
As the name already indicates, a third-party risk assessment is an analysis of risks that might be introduced to your organisation via third-party relationships. For example, risks related to suppliers, partners or clients. Assessments may be conducted in-house or by an independent consultant such as Ascentrix Consulting on your behalf.
Here below are some types of Third Party Risks:
Information Security Risk
Cybersecurity Risk
Reputational Risk
Operational Risk
Regulatory Risk
Strategic Risk
Financial Risk
When an organization conducts a third party risk assessment, all the types of risks above must be considered. This will help strengthen the reputation of your organisation as well as the relation with your clients and suppliers.
This said, third-party risk assessment is a never ending task. It should be a continuous monitoring as third parties may change their own policies or relation with other parties. For example, a supplier who decides to sub contract a work that it use to internalise. In this case, you should do another risk assessment of the sub-contractor of your own supplier.
Despite the importance of the third party risk assessment, some organisations neglect this aspect of their activities due to the lack of ressources at their disposal. The main reason being that only 35% of organisations have a proper budget for the information security, cybersecurity and data protection requirements. More over, 63% of cybersecurity team are understaffed.
At Ascentrix consulting, we can help you in your tasks. If you wish to know more about our third party risk assessment services, please contact us.