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When it comes to cybersecurity and compliance, businesses will often focus inward, securing their own systems, protecting their own data, and ensuring that their own controls are properly implemented and maintained. However, as businesses are becoming increasingly more reliant on the the services and software provided by organisations, their security posture becomes tied to these vendors.
These third-party vendors, whether they are cloud providers, payroll processors, software platforms, or IT support companies, introduce real and significant risk. A breach or failure at a vendor can quickly become a breach or failure for your business, with all the financial, operational, legal, and reputational damage that entails.
This is why third-party risk management is now a core component of effective cybersecurity, and why compliance frameworks increasingly require businesses to demonstrate that they are managing vendor relationships with the same care and attention that they use internally.
The Growing Importance of Third-Party Risk Management
Very few businesses today operate in isolation. SaaS platforms handle sensitive data, third-party consultants have access to internal systems, and infrastructure is often hosted across multiple cloud environments. While outsourcing can provide flexibility and efficiency, it also significantly widens the available attack surface. Supply chain attacks, where attackers target less secure vendors to reach their intended targets, are on the rise.
Crucially, your organisation may still be held responsible even if the root cause of the incident lies outside your direct control. Data protection regulations such as GDPR, and cybersecurity frameworks like ISO 27001, require businesses to assess and manage the risks posed by their suppliers. Ignoring third-party security is no defence when customer data is exposed or operations are disrupted.
How Compliance Frameworks Address Vendor Risk
Most compliance standards now reflect the reality that third-party relationships carry risk, no longer focusing solely on internal security controls.
For example:
- ISO 27001 requires organisations to assess the information security practices of suppliers and ensure that appropriate contractual agreements are in place.
- SOC 2 mandates that service providers identify third-party relationships and ensure they meet specific Trust Services Criteria, particularly around confidentiality and availability.
- Cyber Essentials focuses more on internal technical controls but still expects that external services critical to business operations are secured appropriately.
Beyond formal frameworks, insurers, customers, and regulatory bodies increasingly expect evidence that you have performed due diligence on critical vendors, that risks are regularly reviewed, and that there are processes in place to address non-compliance or service failures stemming from these suppliers.
Simply trusting a vendor’s assurances is not enough. Businesses must verify that the vendors they rely on are implementing controls that meet or exceed their own security requirements.
The Risks of Inadequate Third-Party Management
Failing to properly manage vendor risk doesn’t just increase the chances of an incident, it compounds the impact when one occurs.
If a vendor suffers a breach, sensitive data could be exposed, your operations could be interrupted, and your customers could lose confidence in your ability to protect them. In regulated industries, a vendor breach can still lead to fines, legal action, and regulatory scrutiny against your organisation, not just the vendor, as it is still your responsibility to manage vendor risks.
Perhaps the most important consequence of an incident is the reputational aspect. Customers and clients rarely distinguish between a direct failure and a vendor failure when assessing whether they can continue trusting your business.
Without a comprehensive third-party risk management strategy, businesses also face more practical challenges, a lack of visibility into where sensitive data is stored, uncertainty about how vendors would respond to a security incident, and difficulty meeting audit requirements when documentation evidencing vendor risk management is requested.
Building a Strong Third-Party Risk Management Approach
Managing third-party risk effectively involves a combination of due diligence, contractual processes, ongoing monitoring, and contingency planning.
At minimum, organisations should:
- Assess vendors' security practices before engagement, using questionnaires, evidence reviews, or certifications (such as ISO 27001 or SOC 2 Type II reports).
- Include specific security and compliance obligations in vendor contracts, including rights to audit and incident notification requirements.
- Monitor vendors on a regular basis, not just during the initial onboarding process.
- Maintain an up-to-date inventory of third-party services that process sensitive data or provide critical operational functions.
- Identify the risks associated with these vendors, and create response plans in the event of an incident.
Vendor management should not be treated as a one-time task at the point of signing a contract. It must be a living process that evolves with your business and the broader threat landscape.
Strengthening Third-Party Oversight with OneClickComply
OneClickComply helps businesses strengthen their third-party risk management by embedding vendor oversight directly into their broader compliance and security posture.
Our Information Security Management System (ISMS) capabilities enable businesses to record used vendors, automate due diligence checks, and maintain evidence of risk tracking. This ensures that vendor management is not an afterthought but a formal, auditable part of your security and compliance framework.
In addition, OneClickComply’s continuous monitoring and automation tools can detect changes in your environment, and automatically implementing the required technical controls. This ensures that you can both manage the risks posed by vendors, whilst maintaining your own security.
With OneClickComply, businesses can move beyond manual, documentation focused compliance, towards a consistent, reliable and automated approach to both third-party risk and compliance.
Final Thought
Third-party vendors can provide enormous value, but they also introduce significant risk. Managing that risk is no longer optional, it is now a core part of securing your business and maintaining compliance.
By embedding third-party risk management into your broader security approach, supported by clear processes, regular reviews, and the right tools, you can strengthen your defences, demonstrate accountability, and build a more resilient organisation, one that acknowledges the risks it faces and responds accordingly.
