Business organizations need to constantly strategize and innovate to stay relevant and remain competitive in the ever-competitive business market. Sometimes, businesses also need the help of third parties for better service delivery. By simple definition, a third-party is an individual or organization that’s involved in a business as a minority player. You may think of a third-party as an outsourcing agency, or a logistics company that makes delivery smooth and efficient, or digital payment platforms such as PayPal Holdings Inc and Amazon Payments Inc.
However, involving third parties in businesses also poses security risks. In a survey carried out by Ponemon Institute detailing over 1000 businesses in the US and UK, third-party breaches accounted for over 60 percent of data breaches in 2018. Another worrying aspect of third-party security threats is the tendency for organizations to fail to evaluate third parties properly. In a 2016 report by NAVEX Global Survey, over 32 percent didn’t bother to evaluate their third-party agents. It’s not surprising why over 22 percent were unsure about a third-party in the previously mentioned survey by Ponemon Institute.
For business owners that employ the services of third parties, it’s essential to implement third-party security assessments to monitor third-party activities. But to implement a third-party security risk assessment, it’s important to know your third parties. This is why you need a third-party security assessment questionnaire to help you collate data and other relevant cybersecurity information about third-parties.
This article explains all you need to know about third-party security assessment questionnaires and why every business needs a third-party security assessment. You’ll also learn about the frameworks needed by small and medium businesses to create a sound cybersecurity risk assessment questionnaire.
What’s a Third-Party Security Assessment Questionnaire?
A third-party security assessment questionnaire (also called a vendor risk assessment questionnaire) allows organizations to avert cyber breaches by identifying the risks and weaknesses posed by third-party vendors. Third-party questionnaires are designed to help organizations understand third-party services and to understand the required cybersecurity solution that's needed to avoid third-party cyber-attacks.
No two organizations are the same. The same saying is true for third-parties which is why it's important to tailor your questionnaires to fit your organization’s services while also considering the services offered by third-party vendors. Third-party security risk assessments also grant your organization a peek into the cybersecurity system of a potential third-party vendor or supplier.
Although cybersecurity solutions and policies are subject to change over time, third-party risk assessment questionnaires allow your organization to understand if the cybersecurity solution of a potential third-party is fitting and safe for your organization.
The Importance of a Third-Party Risk Assessment Questionnaire
Third-parties are here to stay. That's an undeniable fact in the business world. Whether it's for your logistics, data server, or credit card payment, third-parties are a key component to foster efficient business delivery. So, it's important to incorporate a third-party risk assessment program that'll help your business to navigate the potential risks posed by any third-party.
Below are 3 important reasons for implementing a third-party risk assessment questionnaire.
1. Data breaches are costly: Third-party breaches are on the rise. However, with third-party breaches, the financial consequences are more severe because of the direct access to sensitive information that third-parties have.
The severity of third-party-related breaches is reflected in the fact that, on average, third-party-related breaches cost almost $400,000 higher than first-party breaches. If you need any motivation to avoid third-party breaches, that's your cue.
2. Third-party acquaintance: Third-party risk assessment questionnaire isn't the ultimate form of third-party risk assessment. The processes are even steeper. However, the first thing that a third-party risk assessment questionnaire guarantees are that it allows you to vet your third-parties. The questionnaire allows you to understand, at the very least, the cybersecurity security practices and infrastructure of third-parties.
Also, it gives you good details about the relationship between your organization and a potential third-party. While implementing a questionnaire isn't the ultimate step to avoiding third-party breaches, it's a step in the right direction that'll keep your business out of cyber troubles.
3. The first step of many: As previously mentioned, security risk questionnaires alone aren't enough. However, implementing a third-party risks assessment questionnaire is arguably the most important and foremost step to implementing a sound third-party risk assessment program. The relevant data and variety of information gathered during this stage are essential components that'll inform other aspects of third-party assessments such as incident response planning.
Navigating a Third-Party Risk Assessment Questionnaire
At this point, it's clear that organizations are better served when they understand the cybersecurity posture of the third-parties they deal with. The process of ensuring this begins with implementing a cybersecurity risk assessment questionnaire. However, settling on a questionnaire is not an easy task.
In this section, a shortlist of questionnaire frameworks has been compiled that'll help you to draft a good questionnaire for your small and medium business. The frameworks will allow your organization to assess their needs with respect to the cybersecurity stance of a potential third-party vendor. Without further ado, the frameworks are:
1. Payment Card Industry Data Security Standards (PCI DSS) Questionnaire
The PCI DSS questionnaire is for organizations involved with credit card transactions. The purpose of the PCI DSS is to ensure that card transaction is carried out in a secured environment. If your business stores and processes credit card information, this questionnaire is fitting for you. The questionnaire ensures that every organization that processes credit card payments comply with the holy, unshakeable 12 rules of PCI DSS Compliance, which ensures proper data encryption and storage.
2. The Vendor Security Alliance Questionnaire (VSAQ)
The Vendor Security Alliance (VSA) was created in 2016 to improve internet security using Vendor Security Alliance questionnaires which measure the activities and threats level of vendors. The VSA, which offers two questionnaires— VSA-Core and VSA-Full— provides full insight into the data privacy scheme, cybersecurity policies and standards, and cybersecurity privacy of third-party vendors.
The VSAQ— specifically the VSA-Core— also covers the cybersecurity privacy compliance of third parties to external regulatory bodies such as the California Consumer Privacy Act and the General Data Protection Regulation. If you do business in the US, this questionnaire is tailored to help you understand third-party vendor breaches and other external regulations that you should include in your questionnaire.
3. Center for Internet Security— CIS Critical Security Controls (CIS First 5/CIS Top 20)
Center for Internet Security (CIS) questionnaire consists of 20 “Controls” that are designed to help your organization to monitor your data against cyber breaches. The First 5 CIS Controls, also called cybersecurity "hygiene", are specifically designed to help you to monitor the integrity and confidentiality system of third-party vendors.
4. Cloud Security Alliance— Consensus Assessments Initiative Questionnaire (CAIQ)
Consensus Assessment Initiative Questionnaire (CAIQ) addresses insecurity related to cloud computing. The questionnaire addresses the lack of transparency that organizations face when dealing with cloud computing service providers. Created by Cloud Security Alliance, the questionnaire provides the best cybersecurity practices to protect cloud data.
Third-party security risk assessment is an important aspect of cybersecurity solutions because of the growing use of third-parties in business operations. However, choosing the appropriate third-party questionnaire framework as well as adapting it to fit the needs of your small and medium business is no easy feat.
At NW Technologies, we're committed to helping you choose the suitable framework fit for your business. Our well-trained team of professionals is always available to help you simplify the process while also providing insight into other vital aspects of third-party security assessment. Contact us today to book a session.