Qualysec

Third Party Security Assessment

Vendor Risk Assessment
3rd Party Penetration Testing

Vendor Risk Assessment: A Complete Guide in 2025

A recent study by Gartner concludes that 80% of compliance leaders find third-party risks after initial onboarding and due diligence processes have been conducted; this reflects the increasing complexity of third-party relationships. This raises the need for risk management approaches in third-party management. Investing in vendor risk assessment procedures—such as enhancing procurement processes, encouraging supervision, and mitigating associated risks with vendors—can yield organizations substantial benefits; the advantages are not limited to these. To delve further into this crucial practice of vendor risk assessment, read our blog for an in-depth exploration of its significance and effective conducting methods. What is Vendor Risk Assessment? Vendor risk assessment is the process of evaluating risks that may arise from outsourcing business to third-party vendors, suppliers, and contractors. Vendor risk assessments allow firms to understand the exposure levels associated with these third-party entities and help them gain insights into security, privacy, and other threats that could emerge when vendors are involved in handling data, business operations, or customer interactions. It provides a holistic understanding of various threats that may challenge the organization.  What is a Vendor Risk Assessment Process? A vendor risk assessment examines potential risks while engaging external partners. It has five key stages in the process: A vendor risk assessment usually consists of issuing questionnaires for the vendors to detail the information security controls, data protection policies, compliance frameworks, subcontracting practices, and many more. Companies may gather financial, legal, and operational information to scope broader business risks. Vendor assessments help organizations evaluate the risks that arise from vendor exposure. Security teams can assign a risk score and identify possible impacts across issues such as data breaches, service disruptions, audits, regulations, and reputation. Initial assessments take place in the screening and selection of a vendor. Follow-up assessments enforce compliance with regulatory standards and prevent unanticipated threats initiated by vendors. Why Vendor Risk Assessment is important? Vendor risk assessments play a very important role in controlling potential risks by third-party service providers. It allows vendor risk assessments that ensure careful management of risk when outsourcing services, sharing data, or giving supplier network access. With greater responsibilities undertaken by vendors, the regulatory landscape further requires proper third-party risk assessment. Assessments provide continuous visibility into vendor performance and policy changes. They help confirm that vendors uphold security and privacy standards throughout the business relationship and enable organizations to be better positioned to reduce impacts from security incidents. Identifying and mitigating risks early on can save you from financial losses in case of security breaches or operational disruptions. Therefore, an active third-party risk assessment process is crucial to promoting operational resilience, business continuity, compliance with standards, data security within the vendor ecosystem, and effective governance of third-party relationships. Vendor risk assessments are more than just looking for vulnerabilities. It is an opportunity to start meaningful dialogues with vendors about security measures, compliance issues, and mutual expectations. By actively collaborating to mitigate the risks at hand, you fortify partnerships. This results in enhanced security and stability. When to do a Vendor Risk Assessment? Regular vendor risk assessments must be performed to maintain security, privacy, resilience, and compliance at all levels of vendor relationships. The results of such assessments give an insight into the trends of risks over time and enable holistic governance with targeted oversight of every individual provider. Below are some critical points that should be performed in organizations at the following stages: 1. Onboarding process: First, do thorough inherent risk assessments before thinking of adding new vendors and, in the process, be aligned with your target risk tolerance. 2. Pre-audits Whether internal or external, preparation for an audit calls for a risk assessment of the vendor involved in the process to ensure adherence to regulatory requirements and compliance with audit expectations. 3. Recurring assessments Regular risk assessments should be conducted throughout the lifecycle of the vendor relationships. Periodic evaluations ensure ongoing compliance, assess changes in risk status—and validate adherence to agreed-upon standards. 4. Upon contract renewals Reassess the risk profile of your vendors before renewing contracts. This process ensures that your vendors’ risk aligns with your evolving business needs and standards before contract renewal. 5. During incidents A vendor risk assessment is necessary in case of security incidents or breaches. This gives you an understanding of the scope of the violation and allows you to determine its impact on your organization—crucial steps toward developing effective incident response plans. 6. During Termination When terminating a vendor relationship, a final assessment is necessary. It ensures proper migration or secure disposal of sensitive data that confirms adherence to contract terms. How to do Vendor Risk Assessment? The business needs to perform a vendor risk assessment to develop an assessment strategy. This helps a business understand vulnerabilities related to its vendors. It enables businesses to develop effective plans addressing them. Here are the 6 steps to performing vendor risk assessment: Step 1: Assigning roles Start by building a cross-functional team consisting of stakeholders from different areas such as risk management, procurement, IT compliance, and security operations. Every role brings unique priorities, uniting perspectives, and knowledge to the vendor risk assessment process. The collaborative approach ensures that all risks connected with third-party relationships are covered comprehensively while promoting an understanding of the multi-faceted aspects of vendor risk assessment. Step 2: Establish your risk appetite After assembling your team, assess and define an acceptable level of risk your organization can tolerate. Critical to this step is the evaluation and definition of various types of risk: data security, financial risks, and operational risks. A risk matrix method helps streamline this process. Step 3: Calculating your risk matrix This matrix helps categorize critical risks for you: anything scoring above a 6 on our 10-point scale signals an imminent danger. It further helps in identifying risk thresholds once we establish some remediation plans, thus enabling us to assess with precision and clarity. This way, we can weigh if the benefits are worth the risks we’re taking. Step 4: Establish vendor risk assessment process Now that

Third-Party Penetration Testing_ A CISO Guide
3rd Party Penetration Testing

Third-Party Penetration Testing: A CISO Guide 2025

In today’s digitized business world, every organization aims to prioritize its security system to safeguard confidential data from potential threats. While the organization may have used top security tools to prevent unwanted vulnerabilities. However, due to irregular updation of those security tools or insufficient knowledge about the latest cyber threats, vulnerabilities often go unnoticed until cybersecurity risks surround them. That’s why there is a need for an effective strategy to mitigate cybersecurity vulnerabilities. One such effective strategy includes third-party penetration testing. In this comprehensive guide, you will read the significance of third-party penetration testing and a detailed roadmap for CISOs on authorizing a functional third-party pen testing program. What is third-party penetration testing? Third-party penetration testing, or external penetration testing, is a cybersecurity practice. In this practice, an external firm or individual accesses the security system of the company with the objective of identifying weaknesses and vulnerabilities to restrict attackers from causing potential threats. Third-party penetration testers implement various techniques like vulnerability scanning, reconnaissance, exploitation, and reporting to penetrate the organization’s security system, including apps, websites, and clouds.  Unlike vulnerability assessment, expert pen testers perform third-party penetration testing services, and it is recommended that every organization should conduct penetration testing at least once a year to cope with the latest cybersecurity techniques.  Penetration testing or ethical hacking can be conducted both internally and externally. The companies reaching out to third-party firms or individuals fall under the category of external pen testing. In contrast, internal pen testing refers to understanding how real threats from the inside can exploit the system’s vulnerabilities. Key differences between internal and external pentest:     *Internal Penetration Testing* Internal pentest:  Examples of internal pentest:  Industry standards in Internal pentest:  *External Penetration Testing* External pentest:  Examples of external pentest: When should your organization connect with Third-party penetration testing? Carrying out penetration testing is a complex process and requires skills, time, and in-depth knowledge. Generally, an organization’s security team doesn’t have access to the tools and methodologies required to conduct pen testing. A company should connect with the third-party penetration testing services provider whenever the following happens:  Benefits of third-party penetration testing The following are the main benefits of having a third-party penetration test: Talk to our Cybersecurity Expert to discuss your specific needs and how we can help your business. Schedule a Call A CISO guide: Important steps before engaging a third-party penetration test. Before directly consulting a third-party penetration testing service, it’s important to follow certain steps to ensure what exactly your organization wants from a penetration testing provider. CISO should do research and address key areas like: The following are the important steps a CISO can follow up when dealing with third-party penetration testing: The very first step is cybersecurity scoping. This step involves creating a clear understanding and agreement between the third-party pen testing and the organization. This step is crucial as it is performed to discuss the issues and decisions on what can or cannot be done. In conclusion, a set of rules are prepared before the tests.  This step is equally important for the pen testing team to get crucial information about the target organization. The team will also be able to present their services before starting the penetration testing. This step includes the process of gathering data and information about the organization. The collected data might encompass a variety of data such as IP addresses, servers, footprinting, scanning, and domain details but under the target company’s permission.  The main objective behind this step is to get an overview of the assets (domain and sub-domains) and content. (specific resources of the assets) With this informed data, testers can develop a specific strategy to examine the vulnerabilities in the later penetration testing process effectively.  Once the target system is done with discussions and scanning, the next step is vulnerability assessment. This is a testing process where pen testers target to identify security defects and points of exploitation. It can be performed through both manual and automated techniques. The earlier three consist of pre-attacks and assessments, but this step is about the actual attack. The objective of this step is not to destroy but to discover the roots of vulnerability and assess the potential threats.  Since this step involves practices like data breaches and unidentified data access to your organization’s sensitive data, it requires extra delicacy when handling and monitoring.  When a vulnerability is discovered, they exploit using various techniques and tools to gain internal access. The final step or process is reporting. Once all the earlier steps are performed and data exploited, a detailed report is created by the third-party penetration team. The report doesn’t only include the list of vulnerabilities but also shares the whole process, including decisions and agreements made prior to tests, threats found, assets and content identified in the exploitation process, and the relevant recommendations to address vulnerabilities.  Moreover, the methodologies and standards used during the exploitation will also be explained. How to identify the right third-party penetration testing company? Before finalizing the third-party pen testing company, it’s important to do a background check of the company because pen testing is a complex process and requires in-depth knowledge about the latest security techniques. CISOs can conduct research by contacting previous clients and reading reviews and case studies available on their websites. To understand the third-party pen testing company more, you can organize a meeting to ask relevant questions related to their core team members’ methodologies, experience and expertise, certifications, and qualifications. Choosing the right third-pen testing provider depends on the company’s requirements. Many organizations hire penetration testing for security maintenance, while others aim for specific compliance like HIPPA, ISO 27001, GDPR, PCI-DSS and SOC. If your organization is aware of the needs and requirements, it becomes smoother for pen testers to suggest specific services. Third-party penetration companies often customize tests according to the company’s objectives. It is significant to learn about the process followed by the penetration testing company to understand what exactly the pen testers will perform during the

Scroll to Top
Pabitra Kumar Sahoo

Pabitra Kumar Sahoo

COO & Cybersecurity Expert

“By filling out this form, you can take the first step towards securing your business, During the call, we will discuss your specific security needs and whether our services are a good fit for your business”

Get a quote

For Free Consultation

Pabitra Kumar Sahoo

Pabitra Kumar Sahoo

COO & Cybersecurity Expert