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12 Oct 2017

As per the reports of KPMG are to be believed, it has been declared that around 81 percent of the healthcare executive have taken the right to claim that their organizations have gone through the poor luck of being compromised by at least one of the many hazardous risks that can be faced in such scenarios such as one malware or botnet or some other form of cyber attack in the time frame of the past two years.

Another conclusion based on the same topic of discussion has also been reached which is that as a Covered entity, one has taken the right to share the responsibility as well as the liability for the steps taken and committed by your existing Business Associate management as well as their vendors. It is you who is to be held responsible for any actions taken by them.

Now these vendors also have something called the Vendor risk management which is basically trying to handle the various kinds of risks that these vendors can face at some point in the work that they are supposed to do. These risks can be pretty damaging and they need to be taken care of. But in order to take care of them you need to know what the kinds of risks that you might face are.

Here are a few types of vendor risks that are existent, let us have a look at them:

·       THE STRATEGIC RISK

These kinds of risks are mostly prevalent in the kind of areas that have a very weak and poor as well as the kind of business decisions that are full of faults. These kinds of decisions are mostly the reason behind the earnings and capital being adversely affected. If the concerned organization fails to have effective process that would be liable for the proper selection of vendors and also monitoring them, they might fail in the task to face and beat strategic risks and issues when required.

·       THE REPUTATION RISK

Reputation risk is the kind of risk that has the ability to come up when the quality of a vendor’s service is not up to the mark and does not meet the necessary expectation of performance according to the standards of the company.  This has the power to result in a major loss of customers for the institution and tamper with the brand loyalty as well.

·       THE COMPLIANCE RISK

Institutions hold the responsibility for giving a complete surety that all their vendors have the ability of complying with the complete range of industry as well as the particular regulations that are specific to geography. This becomes a tad bit difficult in some of the developing countries; this is because these are the places that often face the difficulty to assign a monitoring process that will have a strict compliance across vendors.

·       THE TRANSACTION RISK

When a vendor is caught hold of being a part of a fraud incident or does not have the potential to deliver products or the right services in the right time or maybe is not capable enough to manage information in an effective manner, the organization is said to become a victim who has to face a confrontation of transactional risks.



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