23 November 2023
Cyber risk - what do you know about your Vendors, Partners and Service Providers?
Most organisations are reliant on external vendors, partners, and service providers for various aspects of their business operations. These external parties will often have access to your organisation’s company or customer data, systems, processes, or other sensitive information.
The management of third-party cyber risk is gaining attention because of some high-profile data breaches. A survey conducted by Gartner, Inc. in late 2022 highlighted that by 2025, 60% of supply chain organisations will use cyber security risk as a key consideration when conducting transactions and business engagements with third parties.
Some of the factors that are driving the requirement for third-party cyber risk management are:
Interconnectedness: Businesses are more interconnected, often sharing sensitive data and access with third parties, which opens potential avenues for cyber threats to spread through supply chains.
Cyber Threat Landscape: The instances where cybercriminals exploit vulnerabilities in a supply chain to compromise a target organisation, are on the rise. Attackers are becoming more sophisticated, and third parties are attractive targets for cybercriminals as they can be used as entry points into larger networks.
Data Privacy: Data privacy is an ongoing concern for many organisations, so ensuring their third-party partners handle data responsibly and securely is critical. A failure to handle data securely will highly likely lead to reputational damage and legal consequences.
Business Continuity: Understanding and managing the cyber risks associated with third parties is key to maintaining business continuity in the face of potential disruptions.
Regulatory Compliance: Some industries and jurisdictions have introduced (or plan to introduce) regulations that require organisations to manage and report on third-party cyber risks. Non-compliance with these regulations will have legal consequences and erode trust with customers.
What’s right for my organisation?
There are a range of factors to consider when a business is determining the scope and scale of a third-party cyber risk management program.
Medium and large organisations share common principles in third-party cyber risk management. However, for large organisations a comprehensive and advanced approach to address the unique challenges they face is required due to their scale, resources, and the complexity of their ecosystem.
To implement an effective cyber risk management program in a large organisation, the use of technologies, such as automated risk assessment tools, threat intelligence platforms, and risk management solutions will be a requirement. A medium sized organisation may be reliant on manual processes and/or basic tools due to budget constraints.
A large organisation may apply a more granular approach to categorising suppliers or partners based on criteria such as the criticality of services provided, the type of data involved, and geographic location. Prioritisation and risk categorisation for a medium sized organisation may be simpler, with a focus on critical third-party suppliers or partners.
Once a categorisation exercise is in hand, a large organisation should expect their high-risk external vendors, partners, and service providers to undertake comprehensive assessments that take in to account existing audit and penetration testing reports, and a thorough analysis of their security practices. A medium sized organisation may look to complete a reduced assessment scope and use questionnaires for risk evaluation.
As mentioned, it is important to note that there are a range of factors to consider when determining the scope and scale of a third-party cyber risk management program. If a medium sized organisation sees the business need and has the resources to implement a comprehensive program, then that is the path they should take.
Click below to download our infographic on Third-Party Risk Management.
Third-Pary Risk Management Infographic
Contact us to discuss how Kaon Security can assist your organisation put a third party cyber risk program in place or assess your existing program.