A recent Ponemon study found that only 34% of companies maintain a comprehensive list of their vendors. 69% of the participants in the study blamed “a lack of centralized control” as the key factor as to why a comprehensive inventory had not been created.
Security departments must take a leading role in these situations in order to effectively manage the risks they are inherently exposed to. Vendor risk is not one-size-fits-all. Classifying vendors by Tier so you can ask relevant questions during your security review process is a critical step in the vendor risk management program lifecycle.
Privva has a 4-tier vendor classification system based on data access, network or physical access and business criticality.
Risk Tier 1 vendors will be classified as business and mission critical vendors that pose the greatest risk to overall security, privacy, and operations. Vendors in the tier 1 category will receive the most comprehensive advanced assessment. We expect to conduct rigorous inquiries into each of these vendors’ policies, procedures, and network architecture.
Risk Tier 2 vendors will be classified as high risk vendors. Vendors in the tier 2 category will receive a less exhaustive advanced assessment compared to the tier 1 assessment. The tier 2 assessment will still incorporate questions covering the main risk categories, but our main objective will be to identify vendors’ policies, procedures, and architecture.
Risk Tier 3 vendors will be classified as medium risk vendors. Vendors in the tier 3 category will receive a more focused advanced assessment compared to the tier 2 assessment. Even though these vendors lack the same business criticality as tier 1 and tier 2 vendors, it is still important to understand the controls in place designed to protect the company from risk.
Risk Tier 4 is an optional tier we may leverage for low tier vendors if this level of categorization is needed to maintain a full inventory of all vendors. These may include vendors that do not have access to sensitive information or connectivity to systems/networks. For example, janitorial staff may be a vendor to be inventoried on Privva but may not require an evaluation as part of the engagement.
As the definition of a vendor expands, companies need to thoughtfully review their comprehensive vendor lists. Managing third party risk is only as effective as the completeness of your assessment strategy. Make sure to consider the risks posed by all vendors within your ecosystem and develop an assessment approach to accommodate the full spectrum of these risks.
To learn more about how to centralize, control, and Tier your vendors within the Privva platform please contact Privva at email@example.com.