Each time your organization onboards a new vendor, be it a supplier or a service provider, its risk landscape expands. Cybersecurity risks are particularly prevalent because many vendors are SaaS companies—so their potential attack surface inherently builds onto yours when you adopt their solutions.
To minimize the likelihood and impact of cybersecurity and other vendor-related threats, the best practice is to conduct comprehensive vendor security reviews. This guide will cover the ins and outs of the process, including the following:
- Meaning and importance of vendor security reviews
- Steps to conducting diligent security reviews
- Actions to take after performing one
What is a vendor security review?
A vendor security review—also referred to as a vendor security assessment—is a set of internal processes that evaluate a vendor’s ability to protect your sensitive data and systems from external risks like data breaches, leaks, attacks, etc. The goal is to encapsulate a vendor’s security posture alongside the vulnerabilities they add to your risk environment.
A typical vendor security assessment encompasses four review components, outlined in the table below:
Security reviews are typically performed as part of a broader vendor risk assessment (VRA) process. You can conduct them to decide whether you should partner with a vendor or if an existing vendor maintains a desirable security and compliance posture.
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Why should you conduct vendor security reviews?
Security reviews or assessments are crucial for effective risk identification. Without them, it's challenging to fully gauge a vendor’s threat areas and vulnerabilities that a malicious party can exploit to access your data or systems. Certain vulnerabilities may also lead to non-compliance and reputational damage.
However, diligently conducted security reviews can help you devise the right course of action to address notable vulnerabilities. This leads to better resource allocation for vendor monitoring, more effective internal controls, and trust-focused vendor relationship management.
In today’s age, where organizational security heavily influences procurement decisions, vendor security reviews promote a culture of risk awareness and long-term operational resilience.
4 steps to conducting vendor security reviews
Comprehensive security reviews go beyond gathering vendor credentials and compliance reports. Take the following steps to perform these reviews with care:
- Define the review scope and security criteria.
- Standardize your due diligence and review methods.
- Assess the vendor’s security risks.
- Assign the vendor risk score.
Step 1: Define the review scope and security criteria
Before you start the review process, you should outline its scope and objectives to create a clear framework for your team. You can factor in one or more review components based on the nature of the vendor’s services and the sensitivity of their risk profile.
For example, if you’re performing the initial review of a potential vendor offering employee collaboration software, the scope can include the following:
- Location and security of data centers
- Data collection and storage practices
- Encryption protocols
- Governance, risk, and compliance (GRC) reports
- Incident response and business continuity plans
This step requires you to define clear security criteria to serve as benchmarks for evaluating vendors. You can focus on specific KPIs and KRIs—like the number of security incidents within a particular timeframe or the percentage of outstanding compliance requirements—that best measure a vendor’s accountability toward GRC practices.
{{cta_webinar4="/cta-modules"}} | Webinar: Vendor risk management
Step 2: Standardize your due diligence and review methods
Security reviews should be formalized with clear, repeatable processes you’ll follow with each vendor. This can include defining several tools and techniques, such as:
- Risk assessment templates
- Risk assessment methodologies
- Vendor interviews
- Security questionnaires
- Vendor risk management (VRM) software
If we’re strictly talking due diligence, questionnaires are particularly useful because they mostly eliminate the need to start each vendor security review from scratch. You can create a standard questionnaire for all vendors to complete and get comparable responses if you’re conducting the review during vendor selection.
The items included in a security questionnaire should correspond with the review’s scope and objectives. A few examples of potential areas to inquire about include:
- What cybersecurity risk governance and methodologies do you use?
- How do you manage partnerships with your third parties?
- Which parties have admin access to your systems?
- How often do you conduct penetration testing and vulnerability scanning?
- Have you experienced a security breach or data leak in the past 5 years?
If you’re unsure what to include, you can look into established questionnaires like SIG and CAIQ. They are crafted to enable comprehensive risk coverage and can be adapted for most industries.
Additionally, you can clearly establish the following procedure items to ensure the review process goes smoothly:
- Workflow specifics
- Documentation requirements
- Roles and responsibilities
Considering how elaborate review workflows can be, you should use automation-enabled risk management software to streamline the process and automate tedious tasks.
Step 3: Assess the vendor’s security risk
After you’ve received your questionnaire responses and relevant data and reports from the vendor, it’s time to start evaluating their internal security policies and controls. This is where you revisit the security metrics defined in the first step to clearly understand the vendor's cyber risk profile. At this stage, you can note down:
- Gaps in security controls
- Potential security commitments to request or enforce via SLAs
- Scope for joint efforts to address security challenges
Remember to account for compliance requirements specific to a vendor. You may want to check which standards impact your relationship and future regulatory standing.
Step 4: Assign the vendor risk score
Whether evaluating one or multiple vendors, you need to identify those that expose you to the highest amount of risk through a standard scoring process. Having tangible scores is important because each vendor has a unique risk profile, so making a subjective comparison is not always viable.
For this step, you need to assign numerical values to a risk’s severity and likelihood, and then multiply the two values to get the final risk score. Next, add the risk scores for each vendor or plot them in a matrix. You can then define risk ranges (e.g., low, moderate, and high) according to your predetermined risk criteria.
By the end of the exercise, you’ll get an idea of which vendors expose you to multiple critical risks so you can make procurement decisions and risk remediation plans more confidently.
Once you have the data necessary to form risk-based opinions, create or update the vendor’s profile in your system (or VRM software) to document the identified risks and security outcomes. The goal is to create a centralized inventory for convenient vendor risk management.
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What to do after a security review
After completing a security review, all that’s left to do is decide whether the risks are worth accepting and what to do about them. Specifically, the actions you can take depending on a vendor’s risk level can include the following:
- Refining contractual obligations and SLAs, including incident reporting requirements
- Performing business continuity tests for potential risk scenarios
- Conducting interviews with vendor staff to gain assurance of potential issues or concerns
Keep in mind that each vendor’s risk profile will change over time, which may render a past security review outdated. It’s best to reassess and monitor each vendor’s security posture ongoingly and adjust your VRM practices accordingly.
Conduct seamless vendor security reviews with Vanta
Vanta's Vendor Risk Management solution is designed to help you maintain a robust security posture while working with third parties—you can watch this free webinar to see it in action.
Vanta leverages AI and automation to fast-track security reviews at any scale. You get access to:
- Pre-built questionnaire templates to establish a foundation of questions
- Automated vendor risk assessments
- Vanta AI to quickly extract findings from questionnaires and security documents
- Unified vendor inventory and a robust dashboard for tracking metrics
The platform also auto-scores vendor risks based on default or configurable criteria. This allows you to classify and prioritize vendors without tedious calculations and manual data entry.
Schedule a custom demo today to see how Vanta’s capabilities can help your security team.
{{cta_simple5="/cta-modules"}}
Vendor risk assessment
How to conduct effective vendor security reviews
Vendor risk assessment
Each time your organization onboards a new vendor, be it a supplier or a service provider, its risk landscape expands. Cybersecurity risks are particularly prevalent because many vendors are SaaS companies—so their potential attack surface inherently builds onto yours when you adopt their solutions.
To minimize the likelihood and impact of cybersecurity and other vendor-related threats, the best practice is to conduct comprehensive vendor security reviews. This guide will cover the ins and outs of the process, including the following:
- Meaning and importance of vendor security reviews
- Steps to conducting diligent security reviews
- Actions to take after performing one
What is a vendor security review?
A vendor security review—also referred to as a vendor security assessment—is a set of internal processes that evaluate a vendor’s ability to protect your sensitive data and systems from external risks like data breaches, leaks, attacks, etc. The goal is to encapsulate a vendor’s security posture alongside the vulnerabilities they add to your risk environment.
A typical vendor security assessment encompasses four review components, outlined in the table below:
Security reviews are typically performed as part of a broader vendor risk assessment (VRA) process. You can conduct them to decide whether you should partner with a vendor or if an existing vendor maintains a desirable security and compliance posture.
{{cta_withimage20="/cta-modules"}}
Why should you conduct vendor security reviews?
Security reviews or assessments are crucial for effective risk identification. Without them, it's challenging to fully gauge a vendor’s threat areas and vulnerabilities that a malicious party can exploit to access your data or systems. Certain vulnerabilities may also lead to non-compliance and reputational damage.
However, diligently conducted security reviews can help you devise the right course of action to address notable vulnerabilities. This leads to better resource allocation for vendor monitoring, more effective internal controls, and trust-focused vendor relationship management.
In today’s age, where organizational security heavily influences procurement decisions, vendor security reviews promote a culture of risk awareness and long-term operational resilience.
4 steps to conducting vendor security reviews
Comprehensive security reviews go beyond gathering vendor credentials and compliance reports. Take the following steps to perform these reviews with care:
- Define the review scope and security criteria.
- Standardize your due diligence and review methods.
- Assess the vendor’s security risks.
- Assign the vendor risk score.
Step 1: Define the review scope and security criteria
Before you start the review process, you should outline its scope and objectives to create a clear framework for your team. You can factor in one or more review components based on the nature of the vendor’s services and the sensitivity of their risk profile.
For example, if you’re performing the initial review of a potential vendor offering employee collaboration software, the scope can include the following:
- Location and security of data centers
- Data collection and storage practices
- Encryption protocols
- Governance, risk, and compliance (GRC) reports
- Incident response and business continuity plans
This step requires you to define clear security criteria to serve as benchmarks for evaluating vendors. You can focus on specific KPIs and KRIs—like the number of security incidents within a particular timeframe or the percentage of outstanding compliance requirements—that best measure a vendor’s accountability toward GRC practices.
{{cta_webinar4="/cta-modules"}} | Webinar: Vendor risk management
Step 2: Standardize your due diligence and review methods
Security reviews should be formalized with clear, repeatable processes you’ll follow with each vendor. This can include defining several tools and techniques, such as:
- Risk assessment templates
- Risk assessment methodologies
- Vendor interviews
- Security questionnaires
- Vendor risk management (VRM) software
If we’re strictly talking due diligence, questionnaires are particularly useful because they mostly eliminate the need to start each vendor security review from scratch. You can create a standard questionnaire for all vendors to complete and get comparable responses if you’re conducting the review during vendor selection.
The items included in a security questionnaire should correspond with the review’s scope and objectives. A few examples of potential areas to inquire about include:
- What cybersecurity risk governance and methodologies do you use?
- How do you manage partnerships with your third parties?
- Which parties have admin access to your systems?
- How often do you conduct penetration testing and vulnerability scanning?
- Have you experienced a security breach or data leak in the past 5 years?
If you’re unsure what to include, you can look into established questionnaires like SIG and CAIQ. They are crafted to enable comprehensive risk coverage and can be adapted for most industries.
Additionally, you can clearly establish the following procedure items to ensure the review process goes smoothly:
- Workflow specifics
- Documentation requirements
- Roles and responsibilities
Considering how elaborate review workflows can be, you should use automation-enabled risk management software to streamline the process and automate tedious tasks.
Step 3: Assess the vendor’s security risk
After you’ve received your questionnaire responses and relevant data and reports from the vendor, it’s time to start evaluating their internal security policies and controls. This is where you revisit the security metrics defined in the first step to clearly understand the vendor's cyber risk profile. At this stage, you can note down:
- Gaps in security controls
- Potential security commitments to request or enforce via SLAs
- Scope for joint efforts to address security challenges
Remember to account for compliance requirements specific to a vendor. You may want to check which standards impact your relationship and future regulatory standing.
Step 4: Assign the vendor risk score
Whether evaluating one or multiple vendors, you need to identify those that expose you to the highest amount of risk through a standard scoring process. Having tangible scores is important because each vendor has a unique risk profile, so making a subjective comparison is not always viable.
For this step, you need to assign numerical values to a risk’s severity and likelihood, and then multiply the two values to get the final risk score. Next, add the risk scores for each vendor or plot them in a matrix. You can then define risk ranges (e.g., low, moderate, and high) according to your predetermined risk criteria.
By the end of the exercise, you’ll get an idea of which vendors expose you to multiple critical risks so you can make procurement decisions and risk remediation plans more confidently.
Once you have the data necessary to form risk-based opinions, create or update the vendor’s profile in your system (or VRM software) to document the identified risks and security outcomes. The goal is to create a centralized inventory for convenient vendor risk management.
{{cta_withimage5="/cta-modules"}}
What to do after a security review
After completing a security review, all that’s left to do is decide whether the risks are worth accepting and what to do about them. Specifically, the actions you can take depending on a vendor’s risk level can include the following:
- Refining contractual obligations and SLAs, including incident reporting requirements
- Performing business continuity tests for potential risk scenarios
- Conducting interviews with vendor staff to gain assurance of potential issues or concerns
Keep in mind that each vendor’s risk profile will change over time, which may render a past security review outdated. It’s best to reassess and monitor each vendor’s security posture ongoingly and adjust your VRM practices accordingly.
Conduct seamless vendor security reviews with Vanta
Vanta's Vendor Risk Management solution is designed to help you maintain a robust security posture while working with third parties—you can watch this free webinar to see it in action.
Vanta leverages AI and automation to fast-track security reviews at any scale. You get access to:
- Pre-built questionnaire templates to establish a foundation of questions
- Automated vendor risk assessments
- Vanta AI to quickly extract findings from questionnaires and security documents
- Unified vendor inventory and a robust dashboard for tracking metrics
The platform also auto-scores vendor risks based on default or configurable criteria. This allows you to classify and prioritize vendors without tedious calculations and manual data entry.
Schedule a custom demo today to see how Vanta’s capabilities can help your security team.
{{cta_simple5="/cta-modules"}}
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