Top Industries That Need To Up Their Vendor Risk Assessment Game
Upstream compliance, cyberthreats, geographical location, financial assets, and reputation are five of the top vendor risks most organizations face. But different industries also face vendor risks challenges that are unique to their business sector. For example, the healthcare industry has HIPAA regulations it must follow, and the insurance industry is subject to reporting and auditing standards from various state regulators.
When investigating vendors, many companies focus on what they offer and whether it will help them work better and faster. Few conduct a thorough security assessment that’s needed to ensure that third-party vendor systems won’t open up holes in their own security or introduce new threats into their network.
At ComplyScore, we have successfully helped companies in a variety of industries assess and manage their vendor risks. Based on our experience, these five top industries must up their vendor risk assessment game now to ensure their vendors’ security standards are as robust as the ones they have in place themselves.
The entertainment industry uses many third-party vendors but has no mandated vendor risk regulations it must meet. The industry must initiate vendor risk assessments on its own. While vendor risk management is important to all entertainment businesses, video game companies face enterprise-specific challenges from practices such as outsourcing production elements to countries that represent higher security risks. Comprehensive risk assessment can help the industry avoid expensive litigation while preserving reputation and stakeholder value.
The insurance industry has long outsourced business processes and utilized third-party software solutions. Regulators like the OIG, OCC, FFIED, CFPB, and others require insurance companies to identify possible third-party risks, verify the vendors they do business with are compliant, and regularly monitor changes that may create new risks. A risk assessment platform helps automate risk rating and reduce the amount of time spent managing vendor risk.
Most healthcare organizations have a strategy in place to comply with the Health Insurance Portability & Accountability Act (HIPAA) but with each new technology and practice, fresh risks abound. Third-party risks cost the healthcare industry nearly $24 billion per year and many providers are hard-pressed to adequately assess and understand the risks their vendors pose. A cloud-based platform and end-to-end vendor risk assessment managed services can help meet each provider’s unique needs and ensure compliance requirements are met.
A favorite target for cybercriminals, the financial services sector must continuously monitor third-party risk, adopt policies that go beyond regulatory compliance, and devise an organization-wide approach to vendor risk management. From deciding whether a vendor is a good fit to establishing a cybersecurity culture, a broad vendor risk assessment process protects critical financial and PCI data and helps organizations avoid catastrophic breaches.
Pharmaceutical, biotechnology, and medical device companies face many regulatory compliance requirements related to areas like trial designs, geographic location, and/or specific expertise. Geographic expansion is a particular challenge the life sciences industry faces, as is meeting anti-bribery regulations. An advanced 3rd party assessment solution streamlines the vendor assessment process while ensuring analytic consistency and significantly reducing overhead.
Third-party vendors are a risky necessity that can be made safer by using a cloud-based risk assessment solution and vendor risk assessment managed services. ComplyScore’s CyberScore is designed to help top industries manage third-party relationships in accordance with increased and expansive regulatory expectations while mitigating the risks posed by third-party vendors throughout the lifecycle of the relationship.