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Why Third-Party Risk Assessment Should be Mandatory?

While technology shapes and businesses adopt new innovations, entities will have to adopt one more thing that latches on when technology advancements occur; cyber-attacks! These attacks are inevitable as criminals find ways to harvest and penetrate user information.

With fast pacing development, it takes multiple years for any organization to change and adapt to the security defenses that effectively safeguard against attacks. This process has been seen since the past decade as the move is towards the adoption of more cloud-based infrastructure.

The most current development that occurred in organizations is that they rely on a big network of outsourced suppliers and partners for operations. While a big group of suppliers is not new thing, the excessive advancement of cloud means that the entity can easily find a cloud service for all business needs.

Due to it, the entire network of connections has become complex to understand. In the United States, the Director of the National Counterintelligence and Security Center William Evanina recently announced that:

“supply chain infiltration is one of the key threats that corporations need to pay attention to.”

While in the UK, CEO Ciaran Martin of the National Cyber Security Centre told CBI that third-party risk is one of the five top priorities for boardrooms in this current year.

The fact that firms are not only heavily relying on a larger number of third parties but these suppliers are usually trusted with autonomous access to sensitive information and mission-critical systems. The recent report from Ponemom Institute “Data Risk in the Third-Party Ecosystem” that surveyed an approximate 1000 risk and security professionals found that corporations now share confidential data with an estimated 583 companies. While managing this circle of connections can be a difficult task.

The Emergence of Third Party Risks – How and When?

Considering the increasing interconnectivity, it helps to create a more collaborative and diversified working relationship, it greatly exposes entities to a much bigger risk of cyber-attack. Just as previously firms were late to make a move towards a perimeter-based defense system and handle threats of their mobile workforce. Most of the companies are trying to survive to keep track of all their connections with third parties and calculating the risk that it adds further.

Cybercriminals will try to target suppliers to exploit the connections that have more valuable targets. As according to Ponemon’s study, 59% of corporations faced data breaches caused by third-party suppliers.  

Majority of the famous incidents that happened in the previous years mainly involved third parties at a certain extent. A good example would of the Ticketmaster and Marriott International occurred in 2018.

Organizations are failing terribly to keep up with the increasing landscape of the third parties as Ponemom found, 34% keep a detailed inventory of third parties, while only 69% is only because of no proper hierarchy and control. Companies and individuals need to start looking at online security tools for keeping their security in check at times as there has to be a constant shield to avoid mishaps as mentioned above.

Taking Ownership and Control of third-party risks

Control of third-party risks
Source: https://www.wavefrontac.com/wp-content/uploads/2019/02/How-to-Develop-a-Business-to-be-Successful.png

Looking at the companies, they are largely relying on thousands of suppliers and partners, the basic step would be to manage third-party risk. Its high time firms should make a list of all the possible connections and combine them in a list based on factors as importance to the company and security pasture and the potential breach it can cause.

Along with this, firms have to develop an extensive understanding of how the third parties connect to their infrastructure and the length of the access rights to assets. The reviews should not just account for technology but should also include policies and how they are implemented.

After this has been taken care of, organizations need to create their own governance for reviewing third parties that include risk assessment. This needs to cover what level of risk is permittable and the after effects if the firm does not seek to resort these issues.

All these policies later need to be integrated into the vendor procurement policies the same way as the service level agreements to provide a clear bidding understanding. This process will be a foundation for managing all third parties.

Dire Need for a Revamped Approach

Look around you! With the increase in cyber threats, the rapidness of it can evolve, and intelligence from one of these reports will be history in a few days as security is fast changing. Detailed reviews should be made reality daily, especially for suppliers that represent a high risk depending on their level of access in the organization.

Having a third party monitoring system will enable the organization to get notified of immediate threats and identify risks before the incident occurs. Moreover, with new interconnected partnership or businesses, the world has become more complex and profound as the technology is developing as we speak and unless organizations take countermeasures, the risk will overgrow the organization.

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