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Third-party vendors often introduce hidden vulnerabilities that can compromise your supply chain security. That’s why strong third-party risk management is so essential.
Supply chain security incidents occur more frequently than most people realize. In July, Australian airline Qantas revealed a cyberattack that affected a third-party platform used by the airline’s contact center. Current reports reveal that the attack exposed the records of up to 6 million customers. Unfortunately, this is just one of many incidents.
Why Third-Party Risk is on the Rise
The growing number of third-party breaches means vendor ecosystems are now a significant focus of cybersecurity frameworks.
Real-World Examples of Vendor Breaches
Recent supply chain attacks show the real risks associated with vendor vulnerabilities and highlight the importance of third-party risk management.
In 2023, the Cl0p ransomware gang exploited a zero-day vulnerability in the MOVEit file transfer software application, which was used by nearly 1,700 organizations. It leaked sensitive information belonging to clients, including universities, banks, and government agencies.
Earlier, in late 2020, the CISA announced that attackers had compromised SolarWinds Orion’s software update process by injecting malicious code that reached thousands of customers. This allowed unauthorized access to critical networks and data, which made it one of the most significant supply chain security failures in recent history.
Why Vendors are Appealing Targets
It’s typical for attackers to exploit vendors’ lower security standards to gain access to larger networks. They often lack the same budgets, staff levels, or processes necessary to maintain top levels of security. This provides attackers with an easier path than targeting a well-defended large enterprise directly.
Understanding the Scope of Third-Party Risk
A single supply chain can include many organizations, ranging from IT service providers and software vendors to logistics and payment processors. This can make it tricky to comprehend the full spectrum of risk.
Direct vs. Indirect Vendor Risks
There are two categories of vendor risk: direct and indirect. Direct vendor risk comes from vendors that have direct access to your networks, systems, or data. This could include a Managed Service Provider (MSP) with remote administrative access, or a payroll processor that handles employees’ banking information.
Indirect vendor risk arises from vendors that aren’t directly connected to your systems, but could still impact you if they were to be compromised. For instance, they may have your data stored on their systems. This could include a marketing agency that stores customer lists.
The Challenge of Vendor Visibility
Often, due to complex supply chains, legacy systems, and a lack of centralized oversight, many organizations lack a precise list of their current vendors and dependencies. When an incident happens, many organizations struggle to determine if they’re exposed, which delays their response.
Frameworks and Best Practices for Managing Vendor Risk
Approaches such as the NIST Cyber Supply Chain Risk Management (C-SCRM) framework can help you conduct a thorough vendor risk assessment and enhance your third-party risk management strategy.
Overview of NIST C-SCRM and Other Frameworks
The NIST C-SCRM framework is designed to enable organizations to identify, assess, and mitigate the risks associated with using third-party suppliers. It provides detailed guidance for organizations to integrate supply chain security risk into their enterprise risk management by establishing clear policies, roles, and responsibilities.
There are also other frameworks available. For instance, the ISO/IEC 27036 Series provides principles for organizations to securely manage outsourced ICT services and ensure confidentiality, integrity, and availability in supply chain interactions.
The CISA also provides information on cybersecurity best practices to help organizations reduce third-party risk.
Due Diligence, Contracts, and Continuous Monitoring
Before onboarding vendors, it’s important to assess their security posture by reviewing their policies, incident history, and relevant certifications. Check which other suppliers they rely on, and use security audits to find any gaps. You should also confirm which data they need access to and apply the principle of least privilege accordingly.
Throughout the vendor relationship, you should regularly reassess the vendor to check their risk profile. Remove any unused credentials and inform vendors that they should notify you immediately if their credentials are compromised.
Questions Every Organization Should Ask Vendors
Some questions you should ask as part of a thorough vendor risk assessment include:
What security certifications or standards do you follow?
- Do you use subcontractors or third-party vendors, and how do you verify their qualifications?
- Can you share examples of how you handled past security incidents?
- Do you agree to regular security reviews or audits?
- How do you ensure continuity if your systems are disrupted?
Asking these questions will help you understand how committed your vendors are to cybersecurity.
Steps to Strengthen Your Third-Party Risk Management Strategy Today
It can be challenging to know where to begin when it comes to strengthening your third-party risk management strategy and conducting a comprehensive vendor risk assessment. We have recommended some steps below.
Start with a Vendor Inventory
Identifying and categorizing all vendors by access level and business criticality helps you understand which vendors pose a risk to your organization. Knowing exactly which vendors are high-impact means you can respond faster in a crisis.
Implement Tiered Risk Assessments
Creating risk tiers to align review depth with vendor criticality is an essential part of a robust third-party risk management strategy, as it means you can focus your efforts where they matter most. Doing so helps you stay efficient when managing a large number of vendors.
Collaborate with Security Partners
Working together with a trusted cybersecurity partner like CyberMaxx means they can act as an extension of your internal team and provide you with a robust cybersecurity roadmap. This is especially critical for high-risk vendors, as it means you can respond much more quickly in a crisis.
How CyberMaxx Helps Mitigate Third-Party Risk
CyberMaxx cybersecurity services help organizations to enhance their third-party risk management strategy through proactive defense and detection.
Continuous Threat Detection Across the Extended Enterprise
CyberMaxx’s Managed Detection and Response (MDR) and Extended Managed Detection and Response (XDR) solutions surpass the offerings of typical security providers. They monitor vendor-related traffic and anomalies across the network, such as unusual logins or accounts being used outside of approved hours. This enables analysts to combine data across endpoints and servers, revealing signs of compromise and allowing them to respond to threats before they cause lasting damage.
Risk-Based Alerting and Response
CyberMaxx cybersecurity services prioritize and escalate alerts related to third-party activity. This reduces your organization’s mean time to respond (MTTR) and promotes faster triage and response. Ultimately, this prevents attackers from moving deeper into the network.
Customizable Dashboards and Transparent Reporting
CyberMaxx cybersecurity services provide tailored reports and intuitive, customizable dashboards that offer clients full visibility into their supply chain security. This means you can see vendor-related activity at a glance to track which third-party accounts are active and monitor high-risk vendors. You can also view detailed summaries of vendor-related incidents, escalations, and response actions. This provides a clear insight into how controls function over time.
Don’t Let a Vendor Breach Be Your Breach
Third-party vendors often serve as the entry point for supply chain attacks. CyberMaxx cybersecurity services provide the tools and support to help you continuously monitor, detect, and respond to vendor risks. This enhances your organization’s third-party risk management strategy, helping you remain secure and resilient.