Understanding The Risk of Vendor Supply Chains
Vendor supply chains are risky because if a third party’s security or other vulnerabilities are exploited, it could impact your business. The goal of SOC is to reduce business risks and vulnerabilities while simultaneously enhancing organizational resilience. A vendor supply chain is a complex system with many stakeholders. Each stakeholder presents risks and vulnerabilities that can potentially impact the business. Understanding risk management for vendors is crucial to mitigating all of these risks while simultaneously enhancing organizational resilience.
A business’s supply chain risk goes beyond the product itself and includes any vulnerabilities that lead to a disruption or compromise. Vendors are no exception, as they too have vulnerabilities that can impact your company if exploited. That is why SOC compliance for vendor assessment should be an invaluable tool in understanding how these vendors operate while also providing insights into their security posture.
Why Do Your Vendors Need to Maintain SOC Compliance
Suppliers are a considerable risk for any company, given the regulatory environment and their access to sensitive and confidential data. Supply-chain security is becoming a significant concern for organizations of all sizes, as compliance fines from missteps in supply chains continue to rise. The tightening regulatory climate on privacy has heightened the interest in third parties that handle sensitive data. The focus of regulatory bodies is now moving beyond just companies directly operating sensitive data and extends to those with which they may have a contract. That is an extension of the data protection principle of “data controllership,” which states that organizations must ensure they do not outsource processing or hosting of personal data and instead carry out these processes within their walls.
Vendors need SOC compliance because it helps reduce business risks while also enhancing organizational resilience. To better understand what makes up good SOC compliance, let’s explore some key points:
– System inventory – Ensure systems are being inventoried by type, location, age, etc.; this will help you gauge whether patches/updates are current on all relevant devices;
– Vulnerability assessment – Ensure vulnerabilities are assessed for present or potential risk to the business; this should include documenting findings and assessing risks so that you can prioritize remediation efforts based on threat severity levels;
– Patch management – Update systems with available patches in a timely manner. That will help minimize your company’s exposure to cyberattacks by ensuring devices have all current updates installed, thereby decreasing their attack surface;
– Control system network access controls – Create policies and procedures for controlling who has access privileges at each level of the organization as well as what information they can view (i.e., user approval process);
The Benefits of Working with Vendors that Are SOC Compliant
The main benefit for your organization is knowing that all new vendors you bring in have the necessary capabilities and financial controls to pass an audit from a reputable audit firm.
When vendors are looking at your company as a potential client, they check what type of industry certifications you have, including a SOC 2 compliance report. Having the vendor involved with an outside auditor shows they are committed to providing quality service and validates their work.
There are also many other benefits of vendors that are SOC 2 compliant, and they vary from company to company. Some benefit areas include:
– Ability to rely on reports generated by a trusted party on an internal business process.
– Reduced overall risk due to compliance with industry standards and auditing requirements.
– Increased price attraction from buyers who know they can depend on the financials being correct.
Keeping your supply chain secure is a difficult task, but it’s also an important one. That’s why you need to make sure all of the vendors in your supply chain are SOC compliant. Vulnerabilities can be costly for businesses and consumers alike, so we must take every possible precaution against them.
To learn more about how our team at TrustNet can help you with these efforts, get in touch today! We look forward to answering any questions or concerns you may have on how best to protect yourself from cyberattacks within your own company, as well as those who work closely with you.