Blockchain Framework for Managing Third-Party Vendor Risks
Organizations increasingly rely on third-party vendors, but managing these relationships effectively requires addressing security vulnerabilities and ensuring compliance. The paper, “Blockchain-Enhanced Framework for Secure Third-Party Vendor Risk Management and Vigilant Security Controls”, explains how blockchain was integrated into vendor risk management processes, with practical application demonstrated through a healthcare IoT company’s transition to AWS Cloud.
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🚀 Blockchain in Action
🔹 Vendor Assessment: Before transitioning to AWS Cloud, the company implemented blockchain to create an immutable record of vendor credentials, compliance documents, and security evaluations. Documents such as audit reports and certifications were hashed and stored on the blockchain, ensuring tamper-proof validation.
🔹 Compliance Verification: Smart contracts were used to automatically verify vendor compliance against established benchmarks (e.g., NIST 800–53). For example, when a vendor submitted documentation, the smart contract cross-checked it with predefined criteria, flagging any discrepancies or automatically approving compliant vendors.
🔹 Continuous Monitoring: The company used blockchain’s decentralized ledger to log security events and compliance status in real time. This enabled ongoing monitoring of vendor systems, providing visibility into operational status and identifying potential risks as they arose.
🔹 Incident Response: When incidents occurred, predefined actions encoded in smart contracts were triggered automatically, ensuring swift response and remediation. Actions and timelines were recorded on the blockchain, creating an auditable trail for regulators and stakeholders.
📊 Results Achieved
- 67% reduction in vulnerabilities, achieved by addressing gaps like outdated software and inadequate access controls, with automated verification ensuring consistent remediation.
- 75% faster incident response times, decreasing from 48 hours to 12 hours, driven by blockchain-enabled real-time monitoring and automated response mechanisms.
This case highlights how blockchain, combined with established security practices, can enhance vendor risk management by automating processes, improving transparency, and ensuring compliance.
📖 Read More: https://arxiv.org/html/2411.13447v1
🖋️ Authors: Deepti Gupta, Lavanya Elluri, Avi Jain, Shafika Showkat Moni, Omer Aslan
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