The Significant Cost of Improper Vendor Risk Management
Less than one in ten organizations has a mature vendor risk management program and actively monitors risks within their third-party providers. Keep in mind, an organization can only be as resilient as their weakest third-party.
A report by IBM released in 2022 stated that the average cost of a data breach exceeded $9.4 million in the US alone. A staggering figure. What makes things even worse is that 83% of companies have had more than one data breach.
What are you doing to prevent costly incidents from occurring within your organization? Will you be held responsible when a vendor fails? Is your organization prepared?
Organizations rely on vendors to provide value to our business. But at what cost?
Your organization must make strategic choices on which vendors to rely on by assessing their inherent risk and required controls. Consider their access to sensitive data, reliance on fourth-parties, data location, internal security controls and their strategic view of risk mitigation.
To do this you need a powerful vendor risk management (VRM) program that can help you anticipate and prevent risks that could impact sensitive customer data and much more.
The True Cost of a Improper Vendor Risk Management
The ultimate question every manager, VRM Committee, and Board Member is asking. How much is this going to cost us? It is the hardest question for a third-party risk management (TPRM) professional to answer. TPRM departments are looked at as cost centers, not profit centers. This mindset needs to change and the F.A.I.R. Institute can help you do just that.
Organizations rely on vendors to provide value to the business. Vendor monitoring aims to ensure these third-parties have the right protections in place. When an incident occurs, the costs can vary. To demonstrate the financial impact, you need a methodical approach to convert risk into a monetary figure that is easily understood by leadership.
Solutions such as Black Kite and Alyne work together to quantify financial impact to the organization using methodology from the F.A.I.R. Institute. Finally, you can demonstrate the monetary impact of every vendor relationship, clearing the path for you to improve data protection measures with increased budgets for VRM solutions and staffing.
Looking to accelerate your organization’s cyber risk and vendor risk management programs? Take a look at Mitratech x Black Kite: Supercharged Cyber Risk Assessments.
Build a Wall Around Your Data
Data security is vital for your business. Personnel files, customer demographic data, payment and client information, bank account details — these are all complicated to restore and are potentially dangerous in the hands of bad actors.
The breach or loss of this data can be a serious blow to a company’s reputation and financials. Your clients will see a failure through one of your vendors as a direct failure of your organization’s performance.
Even consistently collected and secured data can be lost in a variety of ways by your vendors:
- Stolen equipment.
- Natural disasters.
- Business interruptions (BI) due to targeted attacks.
- Business email compromises (BEC), scams that use false emails to trick employees into sending money to the wrong accounts.
- Internal exploitation attacks.
It is critical that your company formulates an effective strategy to protect important data. Take an agile and urgent enterprise-wide approach to customer data protection especially with your vendors:
- Review all vendors’ data protection and classification practices.
- Store sensitive data in structured and unstructured database formats.
- Track where sensitive data is located.
- Regularly maintain secure data and server backups.
- Continuously monitor who has access to data and when they access it.
Build a wall around customer data. Understand the potential risks surrounding its collection, storage and access. Leverage the F.A.I.R. Model to focus your risk mitigation controls with vendors who will have the biggest impact. All of these can be managed through a properly configured VRM framework.
Mitratech Helps You Maintain Control
What does a proper vendor risk solution entail? Mitratech can provide a turn-key VRM framework leveraging workflow automation, artificial intelligence, risk identification, control mapping, and system integrations with solutions like Black Kite to provide an all-in-one solution.
- Identify Risk
- Quantify Financial Impact
- Define Controls
- Monitor Continuously
- Automate the TPRM Process
Mitratech consolidates all aspects of TPRM into one single source of truth. Easily identify control gaps for remediation before an incident occurs. Report to the board the strengths of your program. Compare your incidents to industry averages and prove the effectiveness of your solution.
Partner with Mitratech today to further prevent unnecessary exposure and costly incidents. Check out our Infographic: Fully Automated Vendor Risk Management Processes and learn how to boost efficiency and save on costs with the help of Mitratech.
Dynamic organizations need a holistic, cost preventive, approach to vendor risk management. Request a demo from Mitratech today and take your business to the next level.
Watch the latest episode of Mitratech’s Morning Coffee Show for an expert conversation touching on vendor risk management between Ryan Fox, GRC Sales Manager at Mitratech, and Stephanie Fox, GRC Client Success Manager at Mitratech.
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