Cybersecurity experts are facing a growing challenge in managing the risks associated with third-party relationships. With only 42% of companies discovering breaches through their own security teams, CISOs are often left in the dark about the security practices of their service providers, creating a dangerous trade-off between security and accessibility. While service providers want access to real-time information to enhance their security practices, organizations may be hesitant to share confidential data. This dilemma raises the question of where CISOs and service providers should draw the line when it comes to sharing data.
According to a Gartner survey, 84% of executive risk committee members reported that third-party risk incidents resulted in disruptions to operations, leading to financial loss, increased regulatory scrutiny, and reputational damage. The cost of a third-party cyber breach is typically 40% higher than remediating an internal security violation, placing third-party risk management high on CISOs’ priority lists. This highlights the importance of maintaining confidentiality, integrity, and availability of data both internally and across vendor communities.
One of the major challenges in third-party risk management is the expanding attack surface. Malicious actors can exploit vulnerabilities in third-party systems or connections, making supply chain attacks a prevalent threat. These attacks not only target the third-party vendors directly but can also indirectly impact a vast number of organizations and individuals. With dynamic environments like cloud environments and IoT introducing multiple access points and shared resources, businesses need to be vigilant about potential vulnerabilities, especially with remote workers handling sensitive data.
Another critical issue in third-party risk management is the blind spot that organizations face due to the lack of visibility into third-party security practices. Many organizations struggle with limited resources dedicated to TPRM and overreliance on self-attestations from vendors. Additionally, the presence of shadow data, which accounts for 35% of breaches, poses a significant challenge as organizations lack visibility into this unmanaged data residing with third parties.
To address these challenges, organizations need to adopt a practical framework for effective TPRM. This framework includes identifying and classifying all third-party relationships based on risk level, conducting thorough due diligence, continuous monitoring of security posture, establishing clear contractual obligations, creating incident response plans, and fostering communication and collaboration with third parties. By following these key principles, organizations can better manage third-party risks and prevent data breaches.
In conclusion, with the increasing reliance on third-party vendors across organizations, CISOs must rethink their data lifecycle and adopt proactive measures to protect sensitive information. By working closely with third-party security teams and centralizing TPRM efforts, organizations can enhance visibility into shadow data, detect malicious activities sooner, and prevent data leakage effectively. With a strong focus on risk management coordination and adherence to best practices, organizations can navigate the complex landscape of third-party risk and safeguard their data assets.