Third Party Risk: Managing External Vulnerabilities

As a business owner, you know how crucial it is to keep your infrastructure safe and reliable. But what if the third-party vendors you count on become a security risk? The recent data breach at American Express shows that even top companies can fall victim to their partners’ weaknesses.

Vulnerabilities can hide in places you least expect, like third-party tech or big networks. Attackers use these weaknesses to break in, steal data, and harm your business¹. Whether it’s a new vulnerability or a known bug, the damage can be huge. This includes financial losses, harm to your reputation, and legal trouble.

But there’s hope. Good third-party risk management can shield your business from these threats. By actively checking and watching your vendors, you can beat the changing cyber threats. This way, you keep your business safe from third-party risks.

Key Takeaways

• Third-party vendors can introduce vulnerabilities that leave your organization exposed to security threats.
• Effective third-party risk management is crucial to protect your business from the consequences of a third-party breach.
• Assessing and monitoring your vendor ecosystem can help you stay ahead of evolving cybersecurity challenges.
• Dedicated IT and risk teams, as well as back-office teams, are often responsible for third-party cyber risk management¹.
• Emerging AI-powered third-party risk platforms can streamline vulnerability assessments and identify risks more efficiently¹.

Understanding Third Party Risk

In today’s digital world, many companies work with third-party vendors and partners. These partnerships can be very helpful but also bring third-party risk. This risk means security problems can come from these outside groups².

These issues happen when these groups have access to our sensitive data or systems, leading to data breaches or system weaknesses.

What is Third Party Risk?

Third-party risk in cybersecurity talks about the dangers when working with outside suppliers or partners. These groups might see our private info or systems, causing data theft or malware². It’s key for companies to manage this risk well to keep their systems, data, and good name safe.

Common Sources of Third Party Risk

The main sources of third-party risk are vendors, suppliers, business partners, contractors, and². These outsiders might get into our systems and info, and their own security can make our systems weak.

Knowing where third-party risks come from helps companies make good risk management plans and keep their stuff safe³.

“Effective third-party risk management (TPRM) aims to prevent data breaches, operational issues, and ensure vendor compliance with regulations.”³

Types of Risks from Third Party Engagements

Working with third-party companies can lead to big problems and losses. These risks include⁴ data breaches, where a third-party’s security gets hacked. This can let bad guys get to sensitive stuff like customer info or secrets⁴.

Also, mixing third-party systems with yours can create weak spots that hackers can use to get in and cause trouble⁴. If third-parties don’t follow the rules, it can lead to⁴ legal and compliance issues for you, like fines and legal trouble.

Data Breaches

One big risk with third-party work is data breaches. If a third-party gets hacked, it can spill out things like customer info or secrets⁴. This can cause big financial losses, make customers lose trust, and hurt your reputation⁴. It’s important to check how secure and ready your third-party partners are to handle these risks.

System Vulnerabilities

Adding third-party systems to yours can bring new weak spots that attackers can use⁴. These can cause big problems like data loss or even ransomware attacks, making it hard for you to work⁴. Your security team needs to carefully check and manage these third-party systems to find and fix any weak spots.

To stay safe, it’s key to spot and deal with these risks early. Good third-party risk management helps protect your work, data, and reputation from harm. This is very important.

Common Third Party Vulnerabilities

Third-party software and services often have vulnerabilities that can put organizations at risk⁵. These include misconfigurations, outdated patches, and unknown vulnerabilities⁵. Misconfigurations can lead to unauthorized access if not set up right⁵.

Not applying patches can leave systems open to attacks⁵. Unknown vulnerabilities, or zero-days, are especially risky since they’re not yet known to developers⁵.

Before adding third-party services, it’s key to check their cybersecurity risks⁵. Using the Principle of Least Privilege (PoLP) limits what third-party vendors can do, reducing risks⁵. Cyber Threat Intelligence (CTI) gives insights into threats and vulnerabilities affecting your organization and its partners⁵.

Intel 471 helps organizations spot and fix third-party risks with timely threat intelligence⁵. They track vulnerabilities and alert on changes to help defend against threats⁵. Their Attack Surface Protection scans for all assets to find vulnerabilities⁵. By using Human Intelligence (HUMINT), infected machines, and other sources, Intel 471 gives accurate threat information⁵.

Conducting a Vulnerability Assessment

Doing a vulnerability assessment is key to handling third-party cyber risks. It means looking closely at an organization’s network, systems, apps, software, and policies for weaknesses. This way, companies can spot threats early and take steps to fix them. This makes their security stronger⁷.

The process has four main steps: planning, finding threats, analyzing, and fixing. First, planning sets the goals and how to achieve them. Then, finding threats uses tools like network watching and spotting odd patterns to find weak spots⁸.

Analysis is where we look at the weaknesses we found. We check how serious they are, how likely they’ll be exploited, and what damage they could cause. This helps decide which ones to fix first⁹.

Fixing the problems is the last step. This might mean updating software, changing system settings, or adding more security. Keeping an eye on things and reassessing often is key to staying safe from new threats⁸.

By doing a thorough vulnerability assessment, companies can find and fix weak spots in their partnerships. This lowers the chance of data theft, system hacks, and other cyber threats⁷. It’s a key part of keeping partners and vendors safe and secure.

“Prioritizing vulnerabilities based on potential damage and data sensitivity is key to effective vulnerability management.” – Cybersecurity Expert

Third Party Risk

Working with third parties can lead to big problems like data breaches and legal issues¹⁰. It’s key for companies to know the risks and have good plans to keep their business safe¹⁰. Not handling these risks well can cause big financial losses and harm to a company’s reputation¹⁰.

About a third of third-party vendors could be a big risk if they were to cause a breach¹⁰. In 2020, 80% of data breaches came from third parties¹⁰. Cyber attacks and data breaches are big risks from working with third parties¹⁰. Banks often have backup plans for these risks, and dealing with sensitive data brings extra legal and compliance risks¹⁰.

Not managing these risks can lead to legal trouble, financial losses, and damage to a company’s reputation¹⁰. Cybersecurity risks are just one part of the problem, and different risks can mix together, like during a data breach¹⁰. Companies need to check how well they handle third-party risks to find what’s missing¹⁰.

Over the last five years, using third-party vendors has grown a lot¹¹. In 2016, 87% of companies had an issue with a third party that affected their work, and 11% lost a vendor relationship completely¹¹. Companies can lower their third-party risk by making managing these risks a part of their culture¹¹.

Keeping an updated list of vendors is key for managing third-party risks¹⁰. It’s important to track when vendors join or leave and to look at their vendors too¹⁰. Checking vendors before they join helps make sure they meet the rules and lower risks¹⁰.

Having a Third-Party Risk Management (TPRM) program means sorting vendors by risk level¹⁰. This helps focus on the high-risk ones and keeps an eye on their security¹⁰.

Many companies put vendors into three groups based on risk¹². This helps in figuring out the risk by looking at things like sharing sensitive info or data across borders¹². Using automation in TPRM can make things more efficient, like onboarding vendors or checking their risks¹².

There are many risks to think about in a TPRM program, not just cybersecurity¹². The process includes steps like finding vendors, checking them, assessing risks, and making sure they meet the rules¹².

Managing third-party risks takes a lot of time and effort, so some companies hire experts to help¹⁰.

Risk-Based Vulnerability Management

Today, with threats growing fast and more digital devices, risk-based vulnerability management is key. It helps see the whole attack surface and uses resources wisely. It focuses on vulnerabilities that could cause the most harm¹³.

Advantages of Risk-Based Vulnerability Management

This method has big benefits. It uses threat intelligence and automation for better security decisions. This means fixing important vulnerabilities quickly¹³. It also keeps an eye on all devices, like phones and cloud apps, to protect against new threats¹³.

It makes things more efficient too. Automation helps manage vulnerabilities better, freeing up resources for other important tasks¹³. It follows industry standards, like the CVSS and NVD, to score and fix vulnerabilities by their severity and risk¹³.

Companies like CrowdStrike are leading in this area. Their Falcon Exposure Management solution brings together different security tools. This helps protect against attacks and cuts the risk of breaches by focusing on the most critical vulnerabilities¹³.

Trend Micro also uses a risk-based approach. They use global data to watch and prioritize vulnerabilities. Their machine learning helps spot new threats better¹⁴. Their tools, like Global Exploit Activity Playbooks, help find and fix the most serious vulnerabilities¹⁴.

Using risk-based vulnerability management, companies can improve their security, lower cyber risks, and use resources better in a complex threat world¹⁴.

“Risk-based vulnerability management is a game-changer in the modern cybersecurity landscape, empowering organizations to proactively address threats and optimize their resources for maximum impact.”

By using a risk-based approach, companies can boost their security, reduce cyber risks, and stay ahead in a complex digital world¹³¹⁴.

Mitigating Third Party Risk

Managing third-party risk is key for companies that work with outside vendors. This includes steps like risk identification, due diligence, risk assessment, and mitigation¹⁵.

Risk Identification and Due Diligence

First, security teams list and sort risks by how big of an impact they could have and how likely they are to happen. It’s important to check the security and trustworthiness of third-party providers¹⁵. This helps spot and fix weaknesses before they’re used against us.

Risk Assessment and Mitigation Strategies

Looking at the impact and chance of each risk helps organizations focus their efforts. They can make plans, use technical controls, and set security rules in contracts with third parties¹⁵. Keeping an eye on how third parties are doing and updating risk profiles is also key for a strong risk management plan.

With a strong third-party risk management program, companies can handle the risks from their partners well. This protects their data, reputation, and business strength¹⁵¹⁶.

Data Security with Metomic

In today’s world, keeping sensitive data safe is a top priority for all kinds of organizations. The healthcare industry has special challenges in keeping data secure and following rules. For example¹⁷, 35% of healthcare data breaches come from third-party vendors. Also, the average cost of a healthcare data breach is a huge $10.93 million¹⁷.

Metomic’s data security platform is a strong answer to these issues. It uses the latest tech to help organizations protect their data from threats outside their control¹⁸. Sadly, 55% of healthcare groups faced a data breach from a third party last year. This shows how important it is to have good risk management¹⁷.

Metomic’s solutions include finding and protecting data from third parties, stopping data loss, and controlling who can access it. These tools help keep data safe and follow rules like HIPAA and GDPR¹⁸. The platform also sends alerts in real-time and teaches users about security. This helps lower the chance of mistakes that lead to data breaches, which are often human errors¹⁸.

Working with Metomic helps organizations keep their important data safe and manage risks from third parties¹⁸. In healthcare¹⁷, 65% of groups say they don’t focus enough on the security of third-party access. Metomic’s platform is a key solution to this big problem.

“Metomic’s data security solutions have been a game-changer for our organization. We now have the confidence and tools to manage third-party risks effectively, ensuring the protection of our patients’ sensitive information.”

– Chief Information Security Officer, Leading Healthcare Provider

With Metomic, healthcare groups can be proactive about data security. They use the latest tech and best practices to keep their operations safe and follow industry rules. By working with Metomic, businesses can focus on giving great patient care without worrying about data breaches or not following the rules¹⁷¹⁸.

Continuous Vulnerability Management

Managing risks from third parties needs a proactive and ongoing approach. This means automating processes like regular network scans to find devices and users¹⁹. It also means logging firewall activities¹⁹ and testing to simulate cyber attacks to find weak spots¹⁹.

It’s important to analyze these scans and tests. Also, fix vulnerabilities based on how big the risk is and what data they could leak¹⁹. Keeping up with this process is key to stop bad actors from using these weaknesses¹⁹.

Tools for scanning vulnerabilities should follow SCAP standards for scanning and fixing¹⁹. After setting up a scanning process, keep fixing issues with a strategy based on risk¹⁹. Review this strategy every month or more often¹⁹.

For companies that can’t fix issues fast, tools like Netwrix Change Tracker can help. It checks system files, watches for changes, and gives reports that follow many standards¹⁹.

Keeping an eye on things is key in managing risks from third parties. It helps with staying in line with laws, keeping up cybersecurity, and managing risks from outside vendors and services²⁰. Risk checks are done at certain points in time. But, keeping an eye on things all the time helps find and fix risks as they happen²⁰.

Keeping an eye on vendors means checking their work, how well they do, and if they follow the rules. This helps catch and stop risks as they happen²⁰. How often you check depends on how important the vendor is, what laws apply, and how much risk you can handle²⁰.

To start watching third-party vendors, first list the important ones. Then set up what you’ll be watching for, check the risks, use tools to monitor, train people, and make reporting easy²⁰.

Good practices include using automation, updating risk checks often, keeping up with laws, working together inside the company, building good relationships with vendors, and writing down all your steps²⁰.

Big data breaches, like the Marriott one in 2018 and 2020, and the Magecart attacks on big stores²¹, show why keeping an eye on vulnerabilities and third-party risks is so important. Companies need to stay alert and fix issues fast to keep their data and work safe from threats²¹.

Conclusion

Managing third-party risk is key in today’s digital world. Knowing the common risks with third parties²² and doing regular checks²² helps your company. Using tools like Metomic’s data security platform makes it easier to keep data safe and work with third parties securely.

Keeping an eye on things, fixing problems, and building a strong security culture are important. This helps protect your company from third-party risks²². With new rules coming up, like the UK’s plans for Critical Third Parties²³, staying updated is vital.

Putting third-party risk first lets you enjoy the perks of working with others safely. With a solid plan, you can handle the digital world’s challenges. This keeps your customers, stakeholders, and regulators trusting you²²²³.