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Risk exposure is haphazard, whether a company is large or small. Since the GDPR is now entirely imposed, organizations should observe best practices that are compliant.
Among these is putting in place a robust vendor risk management program to help in identifying, tracking, and monitoring your firm’s risk exposure. Under the GDPR, your organization is likely to face penalties, fines, and other probable legal consequences.
The EU General Data Protection Regulation (GDPR) is considering that all e-commerce is exposed to cybercriminals. Data breaches to consumers’ confidential information are reported almost every day. Although consumer data privacy concerns are the most quoted, the scope of citizen data under GDPR is also extended to accommodate payroll or healthcare data.
To be ready for GDPR, companies will need to overhaul some critical business operations, and their vendor risk management programs are among them. The language expressed in GDPR on data processors and controllers clearly states that you are legally answerable if one of your third-party processors experiences a breach that results in comprising customer data.
Below is an illustrated overview of the pertinent articles of GDPR vendor risk management that may affect.
GDPR has plenty of articles that affect data processing from both the processor and the controller. To be specific, Article 28 mandates that controllers have to use processors with sufficient practical and provisional guarantees. Besides, they should have the appropriate organization and technical measures that safeguard subject data rights.
This means that you must apply due diligence and test your third-party vendors to validate that they meet the GDPR compliance requirements. Also, the whole process of validation has to be documented.
To help you understand the way your vendor risk management program can affect GDPR compliance, first ask yourself these few questions:
- What type of personally distinguishable data do you and your vendors collect, process, or store?
- Who processes personal information on your behalf?
- Where do you store your data?
- How and when is this data disposed of?
- Does this data belong to the residents or citizens of the EU?
- What personal data do you process?
- For what purpose is this data processed?
- Who may access such information?
- Do you have policies and procedures put in place to govern your data collection, usage, and compliance?
- What protection and precautionary measures have the controller and processor taken to protect your employees/customers’ personal information?
- What are your processes for breach notifications?
If you want to identify key risk areas, ask yourself these key questions:
- Did you notify your EU citizens that you are sharing their information with third parties?
- Are you confident that your middlemen assure adequate levels of protection? How can you validate this?
- Do you conduct vendor risk assessments to find out the impact of GDPR and how it affects you and your vendors?
- Do you carry out data privacy impact assessments before bringing new systems or vendors on board?
- Have you developed policies and procedures for onboarding/offboarding vendors, monitoring their compliance and assessing them regularly?
- Are you performing controls testing of internal data sources and on-site reviews to safeguard data from getting altered or deleted by vendors if you are high-risk vendors?
- Have you centralized your vendor management program?
Under the GDPR, any data breaches have to be reported to the authorities within 72 hours. If there is compelling proof of mistrust between organizations and third-party vendors who are reluctant to notify their clients of a data breach, under the GDPR you have to. GDPR is a best practice that helps you do good business.
If you fall under GDPR, update your policies and programs because it impacts the legal, compliance, and third-party risks. The counterproductive impacts can be monetary fines, regulatory pressures, and reputational loss from customer mistrust. When updating your internal policies and programs, it should also include your third-party vendors. Depending on your organization’s size, the amount of data you collect will determine if your data privacy officer can formally manage your data security. This will make your case strong and understand your vendors’ adherence to compliance following the regulation.
Effective vendor management requires a systematic approach to identifying and managing vendor risk. Soon you will be required to show your GDPR compliance and vendor management. Audits will be conducted, and they will assess your vendor risk management behavior, questioned and tested. It is imperative that you develop a robust program to help you navigate through.
GDPR is not only impacting European citizens and does not put aside third-party risk management. It is necessary to review the regulations thoroughly to deeply understand how GDPR will affect you and your company as the data collector. Make the necessary changes where needed to potentially save your firm from large fines equivalent to millions of euros or a percentage of global revenue.