Cybersecurity Best Practices for Managing Vendor Access

Third-party vendors are essential to organizations, but each vendor an organization adds widens its attack surface and can introduce various security risks, such as data leaks or data breaches. To effectively manage vendor access and prevent security threats, organizations must conduct thorough vendor risk assessments, implement least-privilege access, establish clear vendor access policies, require MFA, log vendor activity, update vendor access and ensure vendors comply with industry standards.

Continue reading to learn about the risks of improperly managing third-party vendors, seven best practices for managing vendor access and how a Privileged Access Management (PAM) solution can secure vendor access.

The importance of managing third-party risks

Organizations may face several security risks if vendor access is not properly managed, including insider threats, poor security hygiene and vulnerabilities in vendor systems. Even though vendors are external, their employees or contractors can access an organization’s sensitive information. There were several prominent data breaches that happened in 2024 due to compromised vendor access, affecting major companies including American Express and HealthEquity. These data breaches were caused by the involved third-party vendors’ poor security hygiene and large attack surfaces.

Since not all vendors follow strict security hygiene practices, they can be easy targets for cybercriminals, who prey on weak or reused passwords to gain access to an organization’s systems. Vendors with security vulnerabilities can be exploited by cybercriminals as a backdoor into an organization, even if the organization itself has strong security measures in place. By understanding these risks, organizations can take appropriate steps to create stricter controls over vendor access to prevent data breaches.

7 best practices for managing vendor access

Properly managing vendor access helps organizations identify security vulnerabilities that could be exploited by cybercriminals. Here are seven best practices to help organizations reduce security risks when working with third-party vendors.

1. Conduct a thorough vendor risk assessment

A vendor risk assessment evaluates a third-party vendor’s security practices and potential risks before granting them access to an organization’s data or systems. Since not all vendors have the same level of security, it’s important for organizations to conduct a thorough risk assessment before onboarding a vendor to ensure they work only with partners who meet their standards. By carefully analyzing a vendor’s data protection procedures, track record, reputation and incident response plan, organizations can help prevent data breaches and ensure regulatory compliance with industry standards.

2. Implement the Principle of Least Privilege (PoLP)

The Principle of Least Privilege (PoLP) limits access based on a user’s specific job responsibilities. This means vendors should have permission only to access the data, systems and resources necessary to perform their tasks. Organizations should also define what type of access vendors require, such as access to internal web UIs, admin panels, Windows or Linux servers, cloud infrastructure or SaaS applications. The protocols used – such as web browser, RDP, SSH or VNC – should be determined in advance to ensure secure access. 

Eliminating a vendor’s standing access to an organization’s sensitive data prevents insider threats and helps with regulatory compliance, as vendors will be unable to access anything beyond what is needed for their work. In addition to implementing PoLP, organizations should implement Role-Based Access Controls (RBAC) to determine which roles are entitled to certain data, systems or resources. Clearly defining the activities a third-party vendor can perform and what data they can access is essential to protecting an organization’s systems.

3. Establish clear vendor access policies

A vendor access policy defines the rules and procedures that vendors must follow when accessing an organization’s data and systems. Organizations must establish clear vendor access policies to standardize security practices, such as enforcing Multi-Factor Authentication (MFA) or strong password policies, and to specify monitoring requirements, including monitoring and logging all vendor activities. If VPN access is required, organizations must determine how vendors will authenticate, whether through username and password or identity provider integration. This process should also define how credentials are securely shared, such as through encrypted solutions like Keeper’s One-Time Share.

4. Require Multi-Factor Authentication (MFA)

Secure vendor access by requiring vendors to enable Multi-Factor Authentication (MFA), which adds an extra layer of security when verifying their identity. Because a vendor may have permissions to access sensitive data or systems, they must use MFA, which will stop cybercriminals from accessing an organization’s network – even if the vendor’s credentials are compromised. Implement MFA for vendors by requiring it for all logins, including customer databases and cloud services. Requiring MFA protects organizations’ systems from unauthorized access, credential theft and data breaches.

5. Continuously log and monitor vendor activity

Many traditional PAM solutions fail to monitor web sessions to web panes or SaaS apps, but KeeperPAM^® provides full visibility into all vendor activities, including privileged web sessions. Organizations must continuously log and monitor vendor activity to detect suspicious behavior as soon as it happens, preventing potential security incidents from causing maximum damage. KeeperPAM notifies organizations of unauthorized access, suspicious login attempts and privilege escalation. By tracking vendor logins, data access, file downloads, privilege updates and unusual behavior, organizations can identify security threats and prevent data breaches.

6. Regularly review and update vendor access

When granting vendors access to sensitive systems, organizations must regularly review and update vendor access to ensure they have access only to what’s necessary for a specific timeframe. By leveraging a PAM solution, organizations can automate password rotation and access expiration, ensuring vendors only have time-bound access that automatically revokes when no longer needed. Organizations can strengthen their security posture by conducting scheduled audits of vendor access and revoking outdated access for former vendors, preventing cybercriminals from exploiting inactive vendor accounts.

7. Ensure vendors adhere to compliance and security standards

If vendors fail to adhere to compliance and security standards, organizations’ sensitive data and systems can be at risk of compromise. Organizations must define compliance requirements in vendor contracts, especially if standards are industry-specific like HIPAA is for healthcare data. Without ensuring vendors’ compliance with security standards, organizations can be held accountable for vendor-related noncompliance, resulting in fines, lawsuits and reputational damage.

How Privileged Access Management (PAM) secures vendor access

Implementing PAM secures vendor access by allowing organizations to control and monitor privileged access, manage vendors’ sessions, provide time-restricted access, automate reporting and enable integration with Security Information and Event Management (SIEM) solutions.

Controls and monitors privileged access in real time

PAM solutions enable organizations to control and monitor vendor activity involving privileged access. Organizations can track and audit all privileged vendor activity, including logins, activities, accessed files and changes made to any systems or data. Unlike traditional PAM solutions, KeeperPAM provides a web-based access gateway that allows vendors to securely access any resource without exposing credentials to the vendor’s local machine. This ensures that SSH keys, passwords and privileged access credentials are never shared with the vendor directly.

Secures vendor credentials with session management

PAM ensures vendor access is secure, accountable and auditable at all times by managing access sessions. PAM solutions securely store vendor credentials in an encrypted vault, preventing password leaks, credential theft and password reuse. Solutions like KeeperPAM can provide vendors access to resources without ever exposing the credentials, dramatically lowering security risks. KeeperPAM also eliminates the need for vendors to install agents or modify network configurations by using an outbound-only connection to the Keeper Cloud.

Provides temporary, time-bound access

PAM prevents standing access by granting temporary, time-bound access to vendors, limiting their access to organizational data only to what is necessary and only when it is necessary. KeeperPAM facilitates Just-in-Time (JIT) access without requiring VPN configurations, ensuring vendors can only access resources for a specific task before their privileges are revoked.

Automates compliance and reporting

PAM generates detailed audit trails automatically and can create reports to show how vendors comply with security policies and industry regulations. PAM makes it easier for organizations to track, document and prove that security best practices are being followed for third-party vendor access. With no need for manual tracking or auditing challenges, PAM ensures organizations can enforce strong security policies, maintain full visibility over vendor access and simplify compliance.

Enables integration with SIEM solutions

PAM integrates with Security Information and Event Management (SIEM) solutions, providing a comprehensive view of vendor access and associated risks while enhancing security monitoring. By integrating with SIEM, PAM-generated audit logs make it easier for organizations to perform enhanced analysis of vendor activity and detect unusual behavior. SIEM works with PAM to identify vendor-related threats and respond efficiently by triggering intrusion detection system alerts, blocking access to sensitive systems or notifying security teams immediately.

Take control of vendor access with KeeperPAM^®

Organizations can manage vendor access with KeeperPAM, a cloud-based solution that protects sensitive data, reduces the risk of cyber threats and ensures regulatory compliance. KeeperPAM uniquely enables web-based, protocol-agnostic access to internal systems without requiring VPN credentials or exposing privileged credentials to vendors. With its password vault, KeeperPAM can store and manage privileged credentials for vendors, eliminating the risk of password leaks or unauthorized access. KeeperPAM keeps detailed logs and real-time session recordings, allowing organizations to track vendor activities and identify security threats immediately.

Request a demo of KeeperPAM today to strengthen your organization’s vendor access management.