NIST CSF 2.0: Implications for Your Third-Party Risk Management Program

GOVERN (GV): The organization’s cybersecurity risk management strategy, expectations, and policy are established, communicated, and monitored

Cybersecurity Supply Chain Risk Management (GV.SC): Cyber supply chain risk management processes are identified, established, managed, monitored, and improved by organizational stakeholders

GV.SC-01: A cybersecurity supply chain risk management program, strategy, objectives, policies, and processes are established and agreed to by organizational stakeholders

GV.SC-02: Cybersecurity roles and responsibilities for suppliers, customers, and partners are established, communicated, and coordinated internally and externally

GV.SC-03: Cybersecurity supply chain risk management is integrated into cybersecurity and enterprise risk management, risk assessment, and improvement processes

Build a comprehensive third-party risk management (TPRM) or cybersecurity supply chain risk management (C-SCRM) program in line with your broader information security and governance, enterprise risk management and compliance programs.

• Seek out experts to collaborate with your team on:
• Defining and implementing TPRM and C-SCRM processes and solutions
• Selecting risk assessment questionnaires and frameworks
• Optimizing your program to address the entire third-party risk lifecycle – from sourcing and due diligence to termination and offboarding – according to your organization’s risk appetite

As part of this process, you should define:

• Clear roles and responsibilities (e.g., RACI)
• Third-party inventories
• Risk scoring and thresholds based on your organization’s risk tolerance
• Key risk indicators (KRIs), key performance indicators (KPIs) and service levels for incident response

GV.SC-04: Suppliers are known and prioritized by criticality

Centralize your third-party inventory in a software solution. Then, quantify inherent risks for all third parties. Criteria used to calculate inherent risk for third-party prioritization should include:

• Type of content required to validate controls
• Criticality to business performance and operations
• Location(s) and related legal or regulatory considerations
• Level of reliance on fourth parties
• Exposure to operational or client-facing processes
• Interaction with protected data
• Financial status and health
• Reputation

From this inherent risk assessment, your team can automatically tier suppliers; set appropriate levels of further diligence; and determine the scope of ongoing assessments.

Rule-based tiering logic should enable vendor categorization using a range of data interaction, financial, regulatory, and reputational considerations.

GV.SC-05: Requirements to address cybersecurity risks in supply chains are established, prioritized, and integrated into contracts and other types of agreements with suppliers and other relevant third parties

Centralize the distribution, discussion, retention, and review of vendor contracts to automate the contract lifecycle and ensure key clauses are enforced. Key capabilities should include:

• Centralized tracking of all contracts and contract attributes such as type, key dates, value, reminders, and status – with customized, role-based views
• Workflow capabilities (based on user or contract type) to automate the contract management lifecycle
• Automated reminders and overdue notices to streamline contract reviews
• Centralized contract discussion and comment tracking
• Contract and document storage with role-based permissions and audit trails of all access
• Version control tracking that supports offline contract and document edits
• Role-based permissions that enable allocation of duties, access to contracts, and read/write/modify access

With this capability, you can ensure that clear responsibilities and right-to-audit clauses are articulated in the vendor contract, and SLAs tracked and managed accordingly.

GV.SC-06: Planning and due diligence are performed to reduce risks before entering into formal supplier or other third-party relationships

Centralize and automate the distribution, comparison and management of requests for proposals (RFPs) and requests for information (RFIs) in a single solution that enables comparison on key attributes.

As all service providers are being centralized and reviewed, teams should create comprehensive vendor profiles that contain insight into a vendor’s demographic information, 4th-party technologies, ESG scores, recent business and reputational insights, data breach history, and recent financial performance.

This level of due diligence creates greater context for making vendor selection decisions.

GV.SC-07: The risks posed by a supplier, their products and services, and other third parties are understood, recorded, prioritized, assessed, responded to, and monitored over the course of the relationship

Look for solutions that feature a large library of pre-built templates for third-party risk assessments. Assessments should be conducted at the time of onboarding, contract renewal, or at any required frequency (e.g., quarterly or annually) depending on material changes.

Assessments should be managed centrally and be backed by workflow, task management and automated evidence review capabilities to ensure that your team has visibility into third-party risks throughout the relationship lifecycle.

Importantly, a TPRM solution should include built-in remediation recommendations based on risk assessment results to ensure that your third parties address risks in a timely and satisfactory manner and can provide the appropriate evidence to auditors.

As part of this process, continuously track and analyze external threats to third parties. Monitor the Internet and dark web for cyber threats and vulnerabilities, as well as public and private sources of reputational, sanctions and financial information.

All monitoring data should be correlated with assessment results and centralized in a unified risk register for each vendor, streamlining risk review, reporting, remediation and response initiatives.

Be sure to incorporate third-party operational, reputational and financial data to add context to cyber findings and measure the impact of incidents over time.

GV.SC-08: Relevant suppliers and other third parties are included in incident planning, response, and recovery activities

As part of your broader incident management strategy ensure that your third-party incident response program enables your team to rapidly identify, respond to, report on, and mitigate the impact of third-party vendor security incidents. Look for managed services where dedicated experts centrally manage your vendors; conduct proactive event risk assessments; score identified risks; correlate risks with continuous cyber monitoring intelligence; and issue remediation guidance. Managed services can greatly reduce the time required to identify vendors impacted by a cybersecurity incident and ensure that remediations are in place.

Key capabilities in a third-party incident response service should include:

• Continuously updated and customizable event and incident management questionnaires
• Real-time questionnaire completion progress tracking
• Defined risk owners with automated chasing reminders to keep surveys on schedule
• Proactive vendor reporting
• Consolidated views of risk ratings, counts, scores and flagged responses for each vendor
• Workflow rules to trigger automated playbooks to act on risks according to their potential impact on the business
• Built-in reporting templates for internal and external stakeholders
• Guidance from built-in remediation recommendations to reduce risk
• Data and relationship mapping to identify relationships between your organization and third, fourth or Nth parties to visualize information paths and reveal at-risk data

Also, consider leveraging databases that contain several years of data breach history for thousands of companies around the world – including types and quantities of stolen data; compliance and regulatory issues; and real-time vendor data breach notifications.

Armed with these insights, your team can better understand the scope and impact of the incident; what data was involved; whether the third party’s operations were impacted; and when remediations have been completed – all by leveraging experts.

GV.SC-09: Supply chain security practices are integrated into cybersecurity and enterprise risk management programs, and their performance is monitored throughout the technology product and service life cycle

Please see GV.SC-01 and GV.SC-02.

GV.SC-10: Cybersecurity supply chain risk management plans include provisions for activities that occur after the conclusion of a partnership or service agreement

Building on the best practices recommended for GV.SC-05, automate contract assessments and offboarding procedures to reduce your organization’s risk of post-contract exposure.

• Schedule tasks to review contracts to ensure all obligations have been met
• Issue contract assessments to evaluate status
• Leverage surveys and workflows report on system access, data destruction, access management, compliance with all relevant laws, final payments, etc.
• Centrally store and manage documents and certifications, such as NDAs, SLAs, SOWs and contracts
• Analyze documents to confirm key criteria are addressed
• Take actionable steps to reduce vendor risk with remediation recommendations and guidance.
• Visualize and address compliance requirements by automatically mapping assessment results to regulations and frameworks