By Brian Milbier, Vice President of Information Security & Compliance
As a SaaS-based cybersecurity provider, CyberQP sees varying levels of dedication to security and compliance requirements across the channel. In today’s digital landscape, built on countless interconnected systems, businesses and public organizations alike rely heavily on third-party vendors to support various business functions.
However, this dependence introduces significant security risks to these organizations, making third-party vendor security reviews crucial.
Because of the wide range of diligence CyberQP has observed among vendors and customers, our team has developed a simple guide to explain best practices for third-party vendor security. In this blog post, we’ll dive into how you can review your external security vendors, why they matter, and tips from our team on how you can conduct these evaluations effectively.
What are Third-Party Vendor Security Reviews?
Third-party vendor security reviews are assessments conducted by an organization to evaluate the security practices of their vendors. These reviews aim to identify and mitigate potential risks associated with outsourcing services or integrating external software.
Vendors can include:
- Cloud service providers
- Software developers
- Data processors
- And other entities that handle sensitive data or provide critical services.
Organizations might turn to third-party vendors for various reasons. For example, they might be looking to save costs or access specialized expertise. In the cybersecurity field, for example, a business may look to circumvent a global talent gap, and protect their digital environments without breaking the bank.
However, this reliance also opens the door to potential security vulnerabilities. A breach at a vendor’s end can have cascading effects, compromising the organization’s data and operations. Therefore, thorough security reviews must ensure that vendors meet stringent security standards.
Why Are These Reviews Important?
Third-party vendor security reviews are vital for mitigating risks, protecting data, complying with regulatory standards, and avoiding reputational harm. Here’s how:
- Mitigating Risks: Vendors with weak security practices can introduce vulnerabilities into an organization’s environment. Regular reviews help identify and address these weaknesses before they can be exploited.
- Protecting Data: Vendors often have access to sensitive data. They must ensure they have robust security measures in place to protect this data from unauthorized access and breaches.
- Regulatory Compliance: Various regulations, such as GDPR, HIPAA, and PCI DSS, mandate stringent data protection measures. Regular vendor security reviews help ensure compliance with these regulations, avoiding hefty fines and legal repercussions.
- Reputation Management: A data breach can severely damage an organization’s reputation. By proactively managing vendor security, organizations can maintain trust with their customers and stakeholders.
How do I start?
Conducting effective third-party vendor security reviews can start with the basics:
A. Take a Risk-Based Approach
Adopting a risk-based approach ensures that resources are allocated efficiently, focusing on vendors that pose the greatest risk to the organization. Here’s you can implement this approach:
- Identify Critical Vendors: Determine which vendors are critical to your business operations. Assess their business criticality and the sensitivity of the data they handle.
- Categorize Vendors by Risk Level: Categorize vendors into high, medium, and low-risk groups based on their impact on your business and the type of data they access.
- Set Review Frequency: Establish review frequencies based on the risk category. High-risk vendors should be reviewed at least annually, while medium and low-risk vendors can have longer intervals between reviews.
- Create a standard process: Develop a base set of questions for your vendors, establish a process for collecting and reviewing SOC2 reports, and conduct a security interview with the vendor if there are red flags or concerns.
B. Key Questions to Ask When Reviewing a Vendor
When reviewing a vendor, it’s essential to ask targeted questions that address specific security concerns your business may have. Some key questions include:
- Learn More About Their Security Team: Does the vendor have a dedicated security team responsible for implementing and maintaining security measures?
- Learn More About Their Engineering Organization: Are the developers who work on the vendor’s products employees or contractors? Employee developers often have more oversight and accountability. Does the company have a dedicated Engineering team?
- Ask If They Have a Secure SDLC Process: What is the vendor’s Secure Software Development Life Cycle (SDLC) process? Ensure they follow best practices for secure coding and testing.
- Learn About Their Code Review Practices: Can any individual commit code to production without a secondary review? It’s crucial to have checks in place to prevent unauthorized or malicious code changes.
- Understand Their Endpoint Management: Does the vendor manage and monitor all user endpoints? Comprehensive endpoint management helps prevent security breaches at the user level.
- Ask About Their Security Monitoring: Does the vendor have security monitoring in place for employee’s machines and accounts and for the production environment hosting the services you are consuming? Do they have defined processes and people in place to review alerts and quickly address them?
C. Understanding SOC2 Reports
SOC2 (Service Organization Control 2) reports are third-party audits assessing a vendor’s security controls, availability, processing integrity, confidentiality, and privacy. While SOC2 reports provide valuable insights, not all SOC2 audits are created equal. Here’s what to look for:
- Scope of the Audit: Review the scope of the SOC2 report to understand which parts of the vendor’s company were included in the audit. Determine if the audit covers only employee devices and accounts or if it includes the vendor’s platform and software as well. Ensure that all components critical to your operations are within the scope.
- Included Trust Criteria: Not all SOC2 audits cover the same Trust Services Criteria (TSC). A SOC2 audit starts with security at a minimum but can include any combination of security plus availability, processing integrity, confidentiality, and privacy. Every additional Trust Criteria added to the scope of the SOC2 audit introduces additional controls the vendor is being tested against. For example, at CyberQP, based on the services we are providing, we felt it was important to include Security, Availability, and Confidentiality in our SOC2 audit.
- Findings and Gaps: Look for any findings or deficiencies highlighted in the SOC2 report. These findings indicate areas where the vendor’s controls did not meet the required standards and may need additional scrutiny.
Conclusion
Third-party vendor security reviews are essential for safeguarding an organization’s data and operations. While having a SOC2 report is a good starting point, it is not sufficient on its own. The content and scope of the SOC2 report, along with additional diligence and targeted questions, are crucial in evaluating a vendor’s security posture.
Organizations can effectively manage third-party risks by adopting a risk-based approach, asking the right questions, and thoroughly analyzing SOC2 or other security reports. This proactive approach helps mitigate potential security threats, ensures compliance with regulatory requirements, and maintains the organization’s reputation.
