When companies want to ensure that their vendors are handling data appropriately and that they aren’t susceptible to a data breach, they conduct vendor reviews. Let’s cover what vendor reviews are and how they work — and then learn how your company can seamlessly integrate vendor reviews into regular business operations to support your holistic security posture.
What is a vendor review?
Vendor reviews allow companies to assess a vendor’s capacity to deliver and maintain effective security practices and other performance elements critical to their business. Vendor reviews are essential in evaluating the security practices of potential new vendors — and of periodically assessing existing vendors to ensure that they are maintaining established standards.
Your company’s vendor review processes are a key part of your vendor management policy. Vendor reviews are particularly important when a vendor is performing work that impacts your business most directly: when a vendor is handling sensitive data, interacting with your customers, or handling a core function of your business. Vendor reviews should thus address a range of areas of risk that a vendor’s work could pose to an organization — from the security of a vendor’s physical environment to its data handling processes, and everything in between.
Vendor reviews vary by vendor type
Vendor reviews should be tailored to the type of service the vendor performs for your company, ranging from those vendors that provide essential services and interact with your customers and their data directly, to vendors who may not engage with your company’s core services or product. There are some areas of risk that your company should assess across all vendor types and some risk areas that apply more specifically to vendors providing essential services and otherwise interacting with customers or their data.
Where should vendor reviews focus?
Depending on a vendor’s service type, your review should focus on particular risk areas, such as ensuring that a vendor has processes in place for:
- Handling security breach incidents;
- Monitoring and protecting access to its built environment;
- Training employees and contractors on working with customer information;
- Data handling across the life cycle of electronic or paper files;
- Management of assets such as computers, phones, and other valuable items; and more.
In addition to assessing a vendor’s practices across specific risk areas, your vendor reviews should also ensure that vendors have an overarching organizational security program in place, through which they proactively oversee their security responsibilities to their company and clients.
How often should companies conduct vendor reviews?
Your company should conduct vendor reviews at a frequency that aligns with the level of risk you’ve assigned to each of your vendors. You may consider reviewing a low-risk vendor every year or two years, assessing a middle-risk vendor annually or semi-annually, and reviewing your company’s highest risk vendors quarterly or semi-annually. When setting a rhythm for your vendor reviews, you should consider the vendor’s risk level in relation to your company, as well as its size and its established security practices. You’ll want to aim for a review frequency that meets your company’s risk management needs in balance with what the particular vendor relationship requires. Your goal is to ensure that your company’s vendors are protecting your data; and at the same time, your company is aiming to build and maintain relationships with those vendors who are able to demonstrate that they are meeting established security standards over time.
How do vendor reviews support good business relationships?
Any company’s successful cybersecurity program requires that vendors and partners are consistently maintaining their security posture at a level that meets the needs of customers, clients, and regulators. Companies performing vendor reviews want to identify any red flags that might indicate that a vendor is not holistically maintaining expected security standards. Companies that are able to consistently demonstrate that they are responsible with their data security are best positioned to gain new business — and to keep their contracts.
One way companies and vendors can communicate their commitment to strong security practices — and support their ongoing client relationships — is by regularly engaging in a SOC 2 compliance audit. SOC 2 audits are unique to each organization, and the resulting internal reports provide partners with important information about how a company is managing data and security. SOC 2 reports are particularly useful in streamlining the vendor review process, as companies and vendors who are SOC 2 compliant will be actively engaged in assessing the quality of their holistic security environment and remediating any security gaps.
That’s where Vanta comes in: Vanta is your automated security and compliance expert, providing powerful continuous monitoring software to maintain and monitor security across your business ecosystem. Vanta can help build and streamline your company’s security and compliance program, with support for vendor reviews and monitoring — your partner in maintaining a strong security posture inside and out.