Organisations are increasingly relying on third-party vendors and partners for various services and solutions. Whilst these relationships offer numerous benefits, they also introduce an expanded attack surface for cyber threats. This is where third-party risk management becomes indispensable in fortifying an organisation's cyber security posture.
What is Cyber security-centric Third-Party Risk Management?
Third-party risk management in the context of cyber security involves identifying, assessing, and mitigating cyber security risks that external entities pose to an organisation. This includes not just service providers but also suppliers, business partners, and even fourth-party vendors to whom your third-party vendors may subcontract.
Why is it important?
Third-party risk management is integral to a comprehensive cyber security strategy. Any vulnerability in a third-party system can become a vulnerability in your own system. Failure to manage these risks can lead to data breaches, financial losses, and irreversible damage to reputation.
The Cyber security Threats Posed by Third Parties
Recognising the gravity of the cyber security risks introduced by third-party affiliations is the first step in addressing them. Let's delve into these specific threats in more detail:
Data Breaches Through Third-Party Systems
Many third parties require access to an organisation’s network or databases. Should these third parties fall victim to a cyber-attack, the data they had access to is also compromised. Therefore, assessing their data protection measures is crucial.
Supply Chain Attacks
Third-party vendors often act as a bridge between multiple clients and even other vendors. Cyber attackers can exploit weak links in this interconnected chain, ultimately compromising the primary organisation's security.
Insider Threats from Third Parties
Third-party employees often have the credentials to access your systems. Malicious or negligent activities from such insiders can lead to data leaks, system failures, or other cyber incidents.
Exploitation of Software Vulnerabilities
If third parties develop software or manage systems for you, vulnerabilities in their codebase or architecture can become entry points for cyberattacks on your own systems.
Non-compliance to cyber security Standards
Your organisation may be subject to strict cyber security regulations. If a third party does not adhere to these regulations, you may face legal consequences, including hefty fines.
Best practices for cyber security-Focused Third-Party Risk Management
To address these issues, adopt the following cyber security-focused approaches:
Rigorous Cyber security Audits
Before onboarding, subject the third party to a stringent cyber security audit. This should cover data protection measures, incident response plans, and compliance with relevant cyber security standards.
Employ continuous monitoring tools to scrutinise third-party activities in real-time, quickly identifying and mitigating any suspicious activities that could signify a cyber security threat.
Define Cyber security Clauses in Contracts
Contracts with third parties should contain explicit clauses specifying cyber security requirements, immediate actions in case of a breach, and the rights to terminate the contract if the third party fails to meet cyber security standards.
Periodic Risk Assessments
The cyber security landscape is ever-changing. Conducting periodic risk assessments helps to ensure that third-party vendors continue to meet your cyber security requirements.
Third-party risk management is essential for maintaining robust cyber security. Being aware of the potential cyber risks and implementing stringent third-party risk management practices can save an organisation from detrimental cyber incidents, financial repercussions, and loss of trust among stakeholders.
If you are worried about cyber threats or need help in improving your organisation’s visibility please get in touch to find out how you can protect your organisation.