How to Conduct a Third-Party Vendor Assessment Under DORA

Your third-party vendors are vital to your business, but they also bring risks. If one of them drops the ball, it’s not just their problem but yours. That’s why the Digital Operational Resilience Act (DORA) prioritizes vendor assessments. 

A well-executed third-party vendor assessment helps you spot vulnerabilities before they escalate, build stronger partnerships, and avoid disruptions that could cost you time, money, and credibility. 

In this guide, we’ll walk you through everything you need to know about conducting a successful third-party vendor assessment under DORA. This step-by-step approach will set you up for success, from identifying risks to implementing the right strategies.

Why does DORA require third-party vendor assessments?

Regulators expect you to know your vendors’ risk profiles as well as your own. As we stated above, when a vendor fails, it doesn’t just affect them—it affects you, too. Their vulnerabilities can ripple through your operations, creating risks you may not see coming.  

A strong third-party vendor assessment protects the security, integrity, and continuity of operations, for you as well as your vendors. By thoroughly evaluating each one, you can reduce the chances of data breaches, operational hiccups, and even expensive compliance penalties. 

Key components of a DORA third-party vendor assessment

To meet DORA’s requirements, your third-party vendor assessment needs to cover several key areas.

Risk assessment during onboarding

When you onboard a new vendor, you’ll want to assess them thoroughly from the start. Look at their financial stability, cybersecurity practices, and track record with incidents. Ask yourself:

• Can they handle your sensitive data securely without cutting corners?
• Have they dealt with breaches before, and if so, what steps did they take to recover and improve?

Taking the time to conduct a detailed risk assessment during onboarding lays the foundation for a partnership that’s built on transparency and trust. When you know where a vendor stands, you can move forward with confidence, knowing you’ve covered your bases.

Graphite’s platform helps you collect, view and operationalize risk assessments during the onboarding process by leveraging industry best-practice questionnaires used to stay DORA compliant from Fortune 500 companies.

Risk management framework

Every vendor you work with should have a solid risk management framework in place. This includes clearly defined policies for handling operational, IT, and cybersecurity risks. If they don’t have these essentials, it’s a red flag that could spell trouble for your business.

As part of your assessment, take a close look at their framework and check whether it lines up with DORA’s requirements. Do their policies address potential risks? Are their protocols strong enough to protect your partnership from disruptions? If the answers aren’t clear, it’s a risk you can’t afford to overlook.

Register of Information

DORA mandates keeping a detailed register of information for every vendor you work with. This includes critical items like:

• Contracts and agreements
• Incident reports
• Emergency contact details

Having this information readily available is crucial during audits or when incidents occur. With tools like Graphite Connect, you can streamline this step by centralizing all vendor data in one place. Real-time updates make it easier to stay on top of things without wasting time or missing critical details. It also enables remediation plans and helps you monitor progress for existing vendors after incidents.

Incident reporting and response

Your vendors need a reporting system that works smoothly alongside yours, so evaluate how well they detect, document, and communicate incidents. Can they act quickly and provide accurate updates when issues arise?

Fast reporting is a must. Delays can turn small problems into larger disruptions. By verifying that your vendors meet DORA’s timelines, you’ll reduce unnecessary risks and maintain control when it matters most.

Contractual security obligations

Your vendor contracts must clearly define security responsibilities. These should include protocols for protecting data, responding to incidents, and meeting regulatory requirements. 

Ambiguity in these agreements can lead to misunderstandings, so it’s worth going over them in detail. Think of these obligations as your safety net: they keep both parties accountable and set the foundation for a reliable partnership.

Graphite’s contract management capabilities allow you to keep contracts stored in one place with other supplier information, and helps you manage renegotiations and updates in order to ensure DORA compliance.

Regular monitoring

Vendor assessments aren’t a one-and-done task—they’re a continuous process. Regularlyly performing risk assessmentschecking on performance aand compliance is is the only way to make sure your vendors remain aligned with DORA’s requirements. This means conducting periodic audits, holding performance reviews, and keeping an eye on potential risks with real-time tracking.

With Graphite, staying on top of monitoring is easier than ever. It gives you instant access to vendor data and performance metrics, so you can spot issues early and address them without added hassle.

How to develop a third-party vendor assessment for DORA

Creating a dependable vendor assessment requires taking proactive steps to identify, evaluate, and address potential risks. Here’s how to build a framework you can rely on.

Identify all the potential risks among third-party vendors

Begin by listing every possible risk a vendor might introduce to your business. These can include IT vulnerabilities, financial instability, and operational shortcomings. Breaking these risks into categories helps you organize them and decide how to best tackle each one.

Assess and prioritize critical risks to your organization

Not all risks are equal – some pose a far greater threat to your business than others. Focus on risks that could disrupt operations, damage your reputation, or lead to compliance failures. Vendors handling sensitive data or playing a key role in your supply chain should always be at the top of your list.

Implement a due diligence process for vendor assessment

A solid due diligence process can spot weaknesses before they become problems. Conduct background checks to understand your vendor’s track record, verify their certifications, and review their risk management protocols. Standardize this evaluation by using a checklist, so no important details slip through the cracks.

Graphite can streamline your third-party vendor assessment process

Managing vendor assessments can be difficult, especially when you’re juggling multiple vendors with varying risk profiles. With Graphite, you can:

• Automate risk assessments during onboarding.
• Maintain a centralized register of vendor information.
• Track performance and compliance with real-time dashboards.
• Ensure seamless communication with vendors about incidents or updates.

Graphite takes the guesswork out of compliance, helping you stay aligned with DORA’s requirements while saving time and reducing stress. Ready to make third-party vendor assessment easier? Schedule your demo today!