Third-Party Risk Management

Your vendors could cost you $7,500 per violation.

Are your contracts protecting you?

Managing third-party risks under emerging privacy and cybersecurity laws isn't optional. It's critical.

In the U.S. data breach costs exceeded $10.2 million on average in 2024.

With 60% of breaches tied to third-party vendors, weak vendor oversight is a liability your business can't afford.

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Download Free Checklist: Vendor Compliance Audit Tool →

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The Problem: Hidden Vendor Risks

Most businesses face three critical gaps:

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1. Inconsistent Vendor Practices
Your marketing vendor uses two-factor authentication. Your analytics provider doesn't. Only 37% of organizations maintain comprehensive third-party data inventories—leaving massive blind spots in their security posture.

2. Outdated Contracts
One retailer paid $50,000 in fines because their vendor contract didn't prohibit unauthorized data analytics. Their agreement predated CPRA and lacked basic protections.

3. No Ongoing Monitoring
Half of all organizations can't keep vendor inventories current. Without continuous oversight, you won't catch security lapses until it's too late—and too expensive.

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Get Your Risk Assessment →

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What Privacy Laws Requires

For the most part, in the US:

Written contracts must include

• Explicit data use limitations (no vague "business purposes")

• Immediate breach notification requirements

• Full audit rights (scheduled and unannounced)

• Data minimization commitments

Security Standards must include

• Encryption and access controls

• Employee security training

• Vulnerability testing protocols

• Documented incident response plans

Audit Requirements must include

• Annual cybersecurity audits for high-risk data processing

• Risk assessments for entire supply chain (including fourth-party vendors)

• Documentation ready for CPPA review

Falling short? CPRA fines start at $2,500 per violation and jump to $7,500 for violations involving children's data.

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Schedule Compliance Review →

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Your 3-Step Risk Management Framework

Step 1: Build Your Vendor Inventory

Create a complete registry of every vendor touching consumer data. Include your CRM, your chatbot provider,  and all of their subcontractors.

Document data types accessed, processing activities, risk tier (high/medium/low), security certifications (SOC 2, ISO 27001), contract expiration dates

Update quarterly and whenever you onboard new vendors.

Step 2: Strengthen Contracts

Replace generic language with specific requirements:

NOT "Vendor will protect data appropriately"
BUT RATHER "Vendor may use data solely for email campaign delivery and performance tracking. Prohibited uses include: resale, third-party sharing, behavioral profiling, or any processing outside stated purpose."

Include audit rights, remediation procedures, and fast-track termination clauses for non-compliance.

Step 3: Monitor Continuously

• High-risk vendors: Annual comprehensive audits

• Medium-risk vendors: Biennial audits

• All vendors: Quarterly check-ins on security changes

Track KPIs like audit completion rates, incident response times, and contract compliance. Organizations that monitor these metrics see 40% fewer privacy incidents.

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Advanced Protection Strategies

Use Security Frameworks

Require SOC 2 Type II or ISO 27001 certifications from high-risk vendors. These frameworks verify controls are actually working—not just documented.

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Joint Incident Response Planning

Don't wait for a breach to figure out communication protocols. Run tabletop exercises with your critical vendors to test notification procedures and response coordination.

Privacy-First Process Design

Team up with data strategy experts to minimize data sharing without sacrificing marketing performance. Less data shared = lower risk exposure.

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Data Steward is here to help!

We help businesses reduce vendor risk while maximizing marketing efficacy through:

• Customer journey mapping to identify unnecessary data collection points

• Privacy-first analytics that maintain performance visibility with minimal data exposure

• Vendor risk assessments using standardized security frameworks

• Compliance-ready documentation that satisfies audit requirements

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Book Strategy Session →

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Take Action Now

U.S. privacy enforcement is accelerating. By 2027, mandatory annual audits will be standard for high-risk data processing. Companies that wait until then will face rushed implementations, higher costs, and increased violation risk.

Start with our free resources:

1. Download: Vendor Compliance Audit Checklist (comprehensive questionnaire for security assessments)

2. Access: Risk Assessment Calculator (estimate your exposure based on vendor count and data sensitivity)

Then schedule your 30-minute risk assessment where we'll:

• Review your current vendor landscape

• Identify your top 3 compliance gaps

• Provide a customized action plan

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Get Started: Download Free Audit Checklist →