Cybersecurity Policy Template

Third-Party and Vendor Management Policy (DORA Compliant)

1. Introduction

1.1 Purpose and Scope: This policy establishes a framework for the assessment, selection, monitoring, and management of third-party ICT providers and vendors (hereinafter referred to as "third parties") to ensure the confidentiality, integrity, and availability (CIA) of our organization's information and systems. This policy applies to all third parties that provide ICT services, products, or access to our systems, regardless of contract type or location. This includes, but is not limited to, cloud service providers, software vendors, managed service providers, consultants, and contractors.

1.2 Relevance to DORA: This policy directly supports the objectives of the Digital Operational Resilience Act (DORA) by establishing a robust framework for managing third-party risks that could impact the operational resilience of our organization's ICT systems. It ensures compliance with DORA's requirements for identifying, assessing, and mitigating ICT-related risks from third parties, particularly concerning incident reporting, recovery time objectives (RTOs), and recovery point objectives (RPOs). By proactively managing third-party risks, we minimize the likelihood of disruptions and ensure compliance with regulatory reporting obligations.

2. Key Components

The policy encompasses the following key components:

  • Third-Party Risk Assessment: A structured process for evaluating the risks associated with each third party.

  • Due Diligence and Selection: Criteria and procedures for selecting and onboarding suitable third parties.

  • Contractual Management: Ensuring appropriate contractual terms and conditions are in place.

  • Ongoing Monitoring and Oversight: Continuous monitoring of third-party performance and risk posture.

  • Incident Management and Reporting: Procedures for managing incidents involving third parties and reporting to relevant authorities.

  • Exit Strategy and Offboarding: A structured process for terminating relationships with third parties.

3. Detailed Content

3.1 Third-Party Risk Assessment:

  • In-depth explanation: This involves identifying and evaluating potential risks associated with a third party's services, including operational, security, financial, reputational, and legal risks. This should be conducted before engaging with a third party and regularly reviewed. Consider using a risk matrix to prioritize risks.

  • Best practices: Employ standardized questionnaires, risk assessments, and penetration testing where appropriate. Conduct background checks and financial stability assessments.

  • Example: Assessing a cloud provider involves reviewing their security certifications (ISO 27001, SOC 2), incident response plans, disaster recovery capabilities, data residency policies, and service level agreements (SLAs). A questionnaire could ask about their security architecture, vulnerability management processes, and employee background checks.

  • Common pitfalls: Failing to conduct thorough due diligence, relying solely on self-reported information, and neglecting to consider emerging threats.

3.2 Due Diligence and Selection:

  • In-depth explanation: This involves verifying the third party's capabilities, experience, financial stability, and compliance with relevant regulations. It includes reference checks, background checks, and verification of certifications.

  • Best practices: Develop a detailed selection criteria checklist that aligns with organizational risk appetite and DORA requirements. Use a scoring system to objectively evaluate potential vendors.

  • Example: Before selecting a payment processor, we'll verify their PCI DSS compliance, review their security audit reports, check their financial stability ratings, and conduct reference checks with other clients.

  • Common pitfalls: Rushing the selection process, focusing solely on price, neglecting to verify credentials, and not considering long-term implications.

3.3 Contractual Management:

  • In-depth explanation: This involves negotiating and implementing contracts that clearly define responsibilities, service levels, security requirements, incident reporting procedures, and exit strategies. Contracts should incorporate DORA-relevant clauses.

  • Best practices: Include clear SLAs, penalties for non-compliance, data protection clauses, and provisions for data breaches and incident reporting. Require regular security assessments and audits as part of the contract.

  • Example: The contract with our cloud provider specifies their RTO and RPO for various services, their obligations for data protection and incident reporting, and the process for terminating the agreement. It also stipulates their responsibility for complying with relevant data privacy regulations (e.g., GDPR).

  • Common pitfalls: Lack of clear contractual obligations, inadequate service level agreements (SLAs), and omission of crucial clauses regarding incident response and data security.

3.4 Ongoing Monitoring and Oversight:

  • In-depth explanation: This involves regularly monitoring the third party's performance, security posture, and compliance with contractual obligations. This may include regular reports, security audits, and performance reviews.

  • Best practices: Establish key performance indicators (KPIs) to track the third party's performance, and conduct regular audits or assessments. Leverage security information and event management (SIEM) systems to monitor activities.

  • Example: Monthly reports from our managed security service provider (MSSP) detailing security incidents, vulnerabilities identified, and remediation actions taken.

  • Common pitfalls: Insufficient monitoring, lack of proactive risk management, and slow responses to identified issues.

3.5 Incident Management and Reporting:

  • In-depth explanation: This defines procedures for handling incidents involving third parties, including reporting to internal and external stakeholders (including regulatory authorities as per DORA).

  • Best practices: Establish clear communication channels, incident response plans, and escalation procedures. Maintain a detailed log of all incidents and remediation activities.

  • Example: If a third-party provider experiences a data breach affecting our data, a predefined incident response plan will be activated, including notifying relevant stakeholders, containing the breach, and reporting to the appropriate authorities within the timeframes mandated by DORA.

  • Common pitfalls: Lack of clear communication, inadequate incident response plans, and delayed or incomplete reporting.

3.6 Exit Strategy and Offboarding:

  • In-depth explanation: This defines procedures for terminating relationships with third parties, including data migration, knowledge transfer, and security considerations.

  • Best practices: Develop a detailed checklist for offboarding, including data retrieval, security assessments, and contract closure.

  • Example: When terminating a contract with a cloud provider, a detailed data migration plan will be implemented, ensuring the secure transfer of our data to another provider. A final security assessment will be conducted to verify the complete removal of our data from their systems.

  • Common pitfalls: Lack of planning, insufficient data migration procedures, and security vulnerabilities during the transition.

4. Implementation Guidelines

  • Step 1: Establish a Third-Party Risk Management team with clearly defined roles and responsibilities.

  • Step 2: Develop a comprehensive risk assessment methodology and scoring system.

  • Step 3: Create a standardized third-party onboarding process.

  • Step 4: Develop standardized contracts with clear SLAs and security requirements.

  • Step 5: Implement a monitoring and reporting system.

  • Step 6: Establish incident response and reporting procedures.

  • Step 7: Develop an offboarding process.

  • Step 8: Provide training to relevant personnel.

Roles and Responsibilities:

  • Third-Party Risk Management Team: Oversees the entire process.

  • IT Security: Conducts security assessments and audits.

  • Legal: Reviews contracts and ensures compliance with regulations.

  • Business Units: Identify and assess the risks associated with their respective third parties.

5. Monitoring and Review

The effectiveness of this policy will be monitored through regular reviews of third-party performance, security audits, and incident reports. The policy will be reviewed and updated at least annually, or more frequently as needed, to address changes in the risk landscape and regulatory requirements. This includes incorporating learnings from incidents and audits.

6. Related Documents

  • Information Security Policy

  • Incident Response Plan

  • Data Breach Notification Policy

  • Business Continuity Plan

  • Outsourcing Policy

7. Compliance Considerations

This policy addresses several DORA clauses and controls, including:

  • Article 3 (ICT risk management): By establishing a robust framework for assessing, monitoring, and managing third-party risks.

  • Article 4 (incident reporting): By defining procedures for reporting incidents involving third parties.

  • Article 5 (operational resilience): By ensuring the resilience of our systems through effective third-party management.

  • Article 10 (outsourcing): By establishing requirements for outsourcing arrangements.

This policy should also take into account relevant national and EU legislation concerning data protection (GDPR), cybersecurity, and contract law. Compliance with these regulations is crucial.

This detailed template provides a solid foundation for a DORA-compliant Third-Party and Vendor Management Policy. It is essential to adapt this template to your organization's specific needs and context. Remember that ongoing vigilance and adaptation are vital for maintaining operational resilience in the ever-evolving threat landscape.

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