There is nothing revolutionary about companies enlisting the services of outside vendors, suppliers, providers and contractors; companies have been engaging in this practice for generations. However, modern businesses do need to confront additional challenges when it comes to third-party companies, including the regulatory requirements and inherent risks associated with the relationship.
If your enterprise has chosen to enlist the services of a certified third party risk professional (CTPRP), you should learn about how this industry is changing as well as what you should look for in a CTPRP.
Increases In Risks and Threats
Today’s business climate as well as other factors have led to an increase in risk from third-party companies. For one thing, the recession of 2008 caused many operations to take a hard look at their budgets. Upon doing so, they realized that they could save money by outsourcing risk management tasks. It stands to reason that the more outside companies are involved, the higher the risk level.
In addition, the regulatory landscape has become a great deal stricter. Corporations are now expected to be much more forthcoming about how they are managing third-party risk, and the fines for falling out of compliance are stiff, sometimes soaring into the hundreds of millions of dollars.
Furthermore, the speed with which information now travels means that when a breach does occur, it quickly becomes a global event. All too often, the result is significant damage to a company’s brand and reputation. In order to prevent this from happening, businesses are increasingly enlisting the services of professionals with third party risk management certification as a preemptive measure.
Tips for Hiring a Certified Third Party Risk Professional
Ironically, hiring a CTPRP can actually make your organization more vulnerable to data breaches and other threats if you have not developed an effective assessment strategy. This is because any provider that you entrust to perform assessments of the inner workings of your enterprise must be given access to privileged information. Consequently, it is crucial that you exercise foresight and caution as you do your pre-hiring research. Consider the following suggested requirements:
- Identify your business objectives. In other words, what are the goals that you believe that someone with vendor risk management certification could help you achieve? These may include complying with regulatory requirements; filling an expertise gap; lightening the workload of current employees; gaining an objective point of view from a professional who can obtain an overview of your company’s security with a fresh perspective; and saving money and resources by only paying for risk management services when you need them.
- Determine vulnerable data. Some companies store, manage or transmit valuable retail customer, financial or healthcare information. Although others may not, they will probably need to keep track of payroll records, employee data and even corporate secrets. In all cases, protecting the privacy, integrity, confidentiality and availability of this information is necessary. If you cannot clearly identify all of this crucial information, you cannot protect it.
- List your potential risks. There are many upcoming security threats that your cyber team must work to guard against. These include viruses; malware, spyware and ransomware; risks from inadequate or failed log and other processes; risks from outside vendors; system failures; natural and human-made disasters; and legal difficulties or noncompliance with rules and regulations.
- Conduct due diligence. With a high-stakes proposition such as third-party risk management, it is important that your group practices in-depth scrutiny of possible risk management vendors as validation and verification before you sign any contracts. There are multiple issues to be considered, including producing licenses, recognition, certifications and audits; statements that verify and validate financial health; and a documented history of expertise and customer satisfaction that help to establish credibility.
- Know what cost you are willing to pay. Bearing your business objectives in mind, choose a company that provides only the features you need. There is no reason to spend more on a program or assessment tool that is irrelevant or out of your scope.
- Use objective tools such as security ratings. These can provide your team with numerical scores on which to judge various professionals.
Using these guidelines, your team can find a provider with the comprehensive skill set, attention to details, solid business history and expertise that your enterprise needs to guard against third-party risk.
Which CTPRP Certification Is Right For Us?
Another question to answer when considering the company that will be conducting oversight over your risk management protocols is the type of third-party risk management certification you should require. Four of the most common are the following:
- Shared Assessments CTPRP. This is intended for people holding procurement and compliance roles. Someone with this credential has high marketability and can be considered to be a third-party risk management expert.
- Shared Assessments Certified Third-Party Risk Assessor (CTPRA). If you hire someone with this credential, they will be skilled in performing remote or onsite risk assessments .
- SIG University Certified Third-Party Risk Management Professional (C3PRMP). This in-depth certification focuses on third-party risk best practices, frameworks, tools and controls and is an excellent credential to look for if you are seeking an expert in governance.
- Thomson Reuters Third-Party Risk Management certification. This credential is specifically designed for regulatory compliance in the financial industry.
These days, many organizations would rather shift their resources away from training and managing their own in-house third-party risk professionals. If your organization falls into this category, it is making increasingly good sense to outsource this essential function. As long as you take the time to find a certified professional who is equipped to meet your industry-related requirements and business objectives, you can significantly lower your risks in a way that is both effective and affordable.