Third parties and vendors can bring a lot of value to the table — but with that also comes risk. How do you assess, address and mitigate?
With today’s interconnected, interdependent nature of businesses and the emerging trend of hackers breaking into this web of relationships, the disruptive specter of third-party risk continues to loom ever-larger. It’s estimated that 65% of today’s cyber breaches are caused by third parties.
And while many organizations may have taken the cybersecurity of third parties for granted in the past, with many having had to get their house in order with the EU’s General Data Protection Regulation (GDPR), the stakes for protecting your business from cyber threats have never been higher. There’s simply no room for casual business relationships based on blind trust.
As a result of the escalating risk and fallout when third-party risk becomes reality, many organizations are continuing down the path towards adopting the right cybersecurity posture and implementing robust third-party and vendor risk management (VRM). By doing so and ensuring that it is applied to its entire network of partners, an organization can effectively manage and mitigate third-party risk.
Without an effective risk management program, an organization faces real and tangible damning impacts in the form of financial losses – the average global cost of a data breach stands at an estimated US$3.86 million – customer losses, and reputational and brand damage.
With breaches and security incidents affecting third-parties and vendors continuing to dominate the headlines, there’s been an erosion of consumer trust in the commercial marketplace, specifically as it relates to data stewardship.
- According to respondents to SAI Global’s 2019 Reputation Trust Index report, 59% say they are less likely to trust a company that has had a data breach.
- Across the board, 65% of those surveyed viewed data privacy as the most important attribute when considering a company’s trustworthiness.
- With 75% saying they would accept a lower quality product for increased data protection.
- They would also pay more for a product or service if data privacy was guaranteed. This illustrates that data security is more than just a compliance issue, but one of trust and reputation.
In light of protecting yourself and your customers, more than ever you have a strong incentive to broaden and deepen the way you manage third-party and vendor relationships. It’s not enough to ensure that your own house is in order – you have to assess every business relationship. After all, a chain is only as strong as its weakest link. And cybercriminals are adept at finding weak spots.
But sizing up vendor and third-party risk is a tricky business, which is why we have created this ebook to help you and your organization to assess, address and mitigate the risk of third parties and vendors.
Learn more about our solutions for managing third-party risk.
Or, request a demo to see how SAI Global has helped organizations like yours.