The better control an organization has over its third-party security evaluation and management process, the faster and easier it will be to manage, mitigate, and remediate risk, ensure vendor compliance, reduce the likelihood of breaches, improve security posture, and keep the business running smoothly.
In today’s hyper-connected world, businesses rely heavily on third-party vendors to run their operations smoothly. Vendors who share systems with an organization, however, pose security risks that might have major financial, legal, and business consequences. As a result, it’s critical to handle third-party security risk efficiently and effectively.
Organizations should have complete, in-depth visibility into and control of third-party security risk in order to achieve this. This necessitates them assessing and routinely monitoring data flow inside their systems and those of their vendors, as well as being aware of security risks and how to address them. Organizations are exposed when they have an incomplete, unknown, or erroneous understanding of supplier risk, which can lead to a security breach.
Third-party security risk management challenges
- Businesses are vulnerable if they don’t know or have an inaccurate view of vendor risk, therefore CISOs should ensure their third-party risk program is thorough and includes dynamic security questionnaires and external attack surface evaluations, as well as business context. This will provide them with a quick and accurate picture of the cyber-risk posed by suppliers and other parties.
- Manual questionnaires are time-consuming and can make the process seem overwhelming. The time and effort required to do it correctly is taxing, and it frequently results in an incomplete or misleading picture of supplier risk.
- A vendor attack surface analysis is required to understand the security posture of the vendor, but many businesses lack the resources to do it fast and efficiently.
- Not all risk is the same, and organizations don’t always have a simple way to contextualise risk based on the business relationship. This may result in an inaccurate depiction of risk and a loss of time and effort to address an incorrectly estimated risk.
- A big blind spot and cyber gap for businesses is underestimating the risk that employees of the vendors pose to the company’s security posture.
Consequences of a third-party security breach
Dealing with a vendor breach is difficult enough, but the fallout from a third-party security breach regrettably does not end here.
A vendor security breach can cost organizations between US$0.5 and US$1 billion—or possibly more, according to Deloitte’s “2021 Global Third Party Risk Management Survey.” A security breach frequently leads in the loss of sensitive information, which can result in regulatory fines, lawsuits, and damage to the company’s reputation.
Organizations may never be able to recover from the devastation of a third-party security breach for any or all of these reasons, which is why it is vital for businesses to be proactive about their vendor security program.
How can CISOs reduce the risk of a third-party or digital supply chain?
- Build cyber resilience and recovery – CIOs need to be aware of their assets and vendors, which include third-party tools and services that process or store data. This long and cumbersome process can be streamlined and accelerated by automating the management of their third parties.
- Identify critical assets – It is necessary to prioritize assets by compiling an inventory that covers both virtual and physical infrastructure. Once IT leaders have identified and prioritized their assets, they should establish a system to track them all so they monitor the ever-changing landscape.
- Minimize third & fourth-party risk– Every third party has their own infrastructure as well as third parties, which are fourth parties. As a result, CISOs should also be aware of the risk posed by third-parties that handle their data.
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