A U.S.-based financial services company is expanding into the European Union and must select a local vendor for data processing. The Chief Security Officer (CSO) is primarily concerned with avoiding regulatory penalties related to data protection. Which of the following processes is MOST critical for the CSO to initiate to validate the vendor's compliance with regional laws such as GDPR?
Due diligence is the formal process of investigating a third party to assess its adherence to laws and regulations, financial stability, and security posture before entering into a business relationship. In this scenario, performing due diligence is the most critical first step to verify the EU vendor's compliance with GDPR and other regional requirements, thereby mitigating legal and financial risks. Due care refers to the ongoing maintenance of security controls, typically within one's own organization, not the initial investigation of an external partner. Business continuity planning focuses on operational resilience during a disaster, and risk transference is a strategy to shift liability rather than the investigative process itself.
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