Cybersecurity Policy Template
Third-Party Risk Assessment Policy (DORA Compliant)
1. Introduction
1.1 Purpose and Scope: This policy establishes a framework for assessing and managing the risks associated with engaging third-party Information and Communication Technology (ICT) providers. It aims to ensure that all third-party ICT relationships align with the organization's overall security posture and comply with the Digital Operational Resilience Act (DORA). This policy applies to all third-party ICT providers, regardless of their size, location, or the services they provide, including but not limited to cloud service providers, software vendors, managed service providers, and outsourcing partners.
1.2 Relevance to DORA: DORA mandates robust ICT risk management, including the management of risks from third-party ICT service providers. This policy directly addresses DORA's requirements by establishing a structured process for identifying, assessing, mitigating, and monitoring risks associated with these providers. It helps the organization meet its obligations regarding incident reporting, recovery time objectives (RTOs), and recovery point objectives (RPOs) as impacted by third-party dependencies.
2. Key Components
This Third-Party Risk Assessment Policy comprises the following key components:
Third-Party Identification and Categorization: Identifying and classifying third-party ICT providers based on their criticality to the organization's operations.
Risk Assessment Methodology: Defining the process and criteria for conducting risk assessments.
Due Diligence and Onboarding: Establishing procedures for vetting potential third-party providers.
Contractual Agreements: Ensuring that contracts include appropriate security and resilience clauses.
Ongoing Monitoring and Review: Regularly monitoring the performance and security posture of third-party providers.
Incident Management and Reporting: Defining procedures for handling incidents involving third-party providers.
Exit Strategy: Planning for the orderly disengagement of third-party providers.
3. Detailed Content
3.1 Third-Party Identification and Categorization:
In-depth explanation: This involves creating a register of all third-party ICT providers, classifying them based on their criticality to business operations (e.g., critical, important, non-critical). Criticality is determined by factors like impact on business continuity, data sensitivity processed, and regulatory obligations.
Best practices: Use a standardized categorization framework, regularly review and update the register, and assign ownership for each third party.
Example: A bank might categorize its core banking system provider as "critical," its email provider as "important," and its office printer supplier as "non-critical."
Common pitfalls: Inconsistent categorization, lack of regular updates, and failure to consider interdependencies between providers.
3.2 Risk Assessment Methodology:
In-depth explanation: A structured approach to identify and assess risks associated with each third-party provider, encompassing security, operational, and compliance risks. This includes using qualitative and quantitative risk assessment methods (e.g., risk matrices, questionnaires).
Best practices: Use a standardized risk assessment framework, involve relevant stakeholders, document findings thoroughly, and regularly review and update assessments.
Example: A risk assessment questionnaire for a cloud provider might assess their data security controls, disaster recovery capabilities, incident response plans, and compliance certifications (e.g., ISO 27001, SOC 2).
Common pitfalls: Using a generic, one-size-fits-all assessment, neglecting qualitative aspects, and failing to document findings adequately.
3.3 Due Diligence and Onboarding:
In-depth explanation: This involves a thorough vetting process before engaging a third-party provider. This could include background checks, reference checks, security audits, and review of their security policies and procedures.
Best practices: Develop a comprehensive due diligence checklist, use independent assessors where appropriate, and clearly define acceptance criteria.
Example: Before engaging a new cloud provider, a company conducts a security audit of their infrastructure, reviews their incident response plan, and verifies their compliance with relevant regulations (e.g., GDPR, CCPA).
Common pitfalls: Rushing the onboarding process, failing to perform adequate due diligence, and overlooking critical security controls.
3.4 Contractual Agreements:
In-depth explanation: Contracts should clearly define security responsibilities, service level agreements (SLAs), incident reporting procedures, and data protection requirements, aligning with DORA's requirements for incident reporting and recovery times.
Best practices: Use standardized contract templates, involve legal and security experts in contract negotiation, and ensure that contracts are regularly reviewed and updated.
Example: The contract with a cloud provider should specify their RTO and RPO for critical services, their obligations regarding data breaches, and their responsibilities for data security.
Common pitfalls: Failing to include adequate security clauses, unclear definitions of responsibilities, and lack of contract review.
3.5 Ongoing Monitoring and Review:
In-depth explanation: This involves regularly monitoring the performance and security posture of third-party providers through performance metrics, security audits, and regular communication.
Best practices: Establish key performance indicators (KPIs), conduct regular security assessments, and maintain open communication channels with providers.
Example: Regularly reviewing the cloud provider’s security reports, monitoring their uptime, and conducting annual security audits.
Common pitfalls: Lack of proactive monitoring, infrequent reviews, and insufficient communication with providers.
3.6 Incident Management and Reporting:
In-depth explanation: This defines procedures for handling incidents involving third-party providers, including notification protocols, escalation procedures, and post-incident reviews. This is crucial for DORA compliance.
Best practices: Establish clear communication channels, develop incident response plans, and conduct regular drills and simulations.
Example: A defined process for notifying relevant stakeholders within a specified timeframe if a third-party provider experiences a service outage or data breach.
Common pitfalls: Lack of clear communication protocols, inadequate incident response plans, and failure to conduct post-incident reviews.
3.7 Exit Strategy:
In-depth explanation: This outlines the process for terminating relationships with third-party providers, including data migration, security considerations, and contractual obligations.
Best practices: Develop a standardized exit plan, involve relevant stakeholders, and document the process thoroughly.
Example: A detailed plan for migrating data from a cloud provider, ensuring data security during the transition, and adhering to contractual obligations.
Common pitfalls: Lack of planning, failure to address data security concerns, and neglecting contractual obligations.
4. Implementation Guidelines
1. Establish a Third-Party Risk Management Team: Assign roles and responsibilities.
2. Develop a Third-Party Risk Assessment Inventory: Identify all third-party ICT providers.
3. Categorize Third-Party Providers: Classify providers based on criticality.
4. Develop Risk Assessment Questionnaires: Tailor questionnaires to different provider types.
5. Conduct Risk Assessments: Assess each provider's risks systematically.
6. Negotiate Contracts: Include robust security and resilience clauses.
7. Implement Monitoring Procedures: Regularly monitor provider performance and security.
8. Develop Incident Response Plan: Define procedures for handling incidents.
9. Establish Exit Strategies: Plan for orderly disengagement.
Roles and Responsibilities: A dedicated Third-Party Risk Management team should be established, with clear roles and responsibilities for identifying, assessing, and monitoring third-party risks. This team may include representatives from IT, security, legal, and business units.
5. Monitoring and Review
The effectiveness of this policy will be monitored through regular reviews of the third-party risk register, the results of risk assessments, incident reports, and audits. The policy will be reviewed and updated at least annually or whenever significant changes occur in the organization’s ICT landscape or relevant regulations (e.g., updates to DORA).
6. Related Documents
ICT Security Policy
Incident Response Plan
Data Protection Policy
Business Continuity Plan
Vendor Management Policy
7. Compliance Considerations
This policy directly addresses DORA's requirements for managing third-party ICT risk, specifically regarding:
Article 3: The obligation to identify and manage ICT risks.
Article 10: Requirements for incident reporting and recovery.
Article 11: Requirements for ICT risk management.
This policy should also be aligned with other relevant regulations, including GDPR, CCPA, and national cybersecurity legislation. Legal counsel should be consulted to ensure full compliance.
This comprehensive template provides a foundation for a DORA-compliant Third-Party Risk Assessment Policy. It should be adapted and tailored to fit the specific needs and context of the organization. Remember that regular updates and refinements are crucial to maintain its effectiveness and compliance with evolving regulatory requirements.
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