These days, businesses are reliant on third-party vendors who give them end-to-end support in every aspect. These third parties can easily access all the sensitive and confidential information of the client. In some cases, most of these third parties further use other vendors to cater services. This extended chain leaves the client with little control over who is accessing their data.
Bad outsourcing decisions are the prime reasons behind data breaches. As per a recent Ponemon study, 56% participants agreed that they had suffered a third-party data breach during last year which was an unfortunate increase of 7% from the previous year.
Top reasons why third-party risks are a rising threat
1. Poor visibility of the entire supply chain: Most organizations do not have an end to end visibility of their supply chain. In such cases, organizations are not sure about how much their vendors are protected against cyber threats or if they have stringent policies and procedures to handle a data breach.
2. Outdated systems at vendors end: Companies often have no control over their suppliers/vendors’ IT systems. Any outdated system or unpatched machine at the vendor’s end is a potential target for a cyber-attack which could lead to loss of company’s data from an indirect source.
3. File/data sharing is on the rise: Many companies rely on sharing huge volumes of data with vendors and suppliers using FTP’s and torrents. This is especially true for the healthcare industry. The higher the interaction with systems outside your direct control, the higher is the associated risk.
4. Stringent regulations for supplier risk: Regulatory authorities are becoming more and more stringent about managing the risks associated with suppliers. This adds on to the pressure of organizations who are in a constant economic, legal and regulatory fix about maintaining margins and at the same time averting supplier disruption.
Read More: Healthcare: Cybersecurity risks with vendors
Thus, it is vital for a company’s cybersecurity setup to ensure third-party risks are minimized. Here are some tips to mitigate the risks while working closely with the third-party vendors.
1. Take a close look at your vendor: Since third party suppliers access a lot of organizational data, it is important that the company has an adequate knowledge of who is accessing their data and what type of data is being accessed by them. The first step is to completely understand the nature of your vendors, their business areas and relevance and the type of access they have been granted.
2. Limit your data access: The access to company data and systems should be regularly reviewed and granted only on a need-to-know basis. If required, secure your organization’s sensitive and imperative data separately on the cloud.
3. Practice endpoint security: Every system is an endpoint, and each terminal is responsible for its own security. Commercial cloud systems have enhanced the endpoint risk, and thus, every system needs to be placed in such a way that it can combat the threat. Having a robust endpoint security solution like Seqrite EPS can ensure that all endpoints are always secured.
4. Make a vendor management plan: A well-designed contract between an organization and its vendors will not only help maintain a wholesome relationship but it will also minimize the third-party risks. Certain crucial elements like the ones mentioned below must be a part of the contract.
- The vendor should give warranties regarding its cybersecurity practices and must give the company an authority to conduct audits regarding its ability to meet and sustain your security expectations.
- The vendor should notify you if they have faced any security issue.
- Control and limit downstream transfers of your organization’s data.
- The vendor should destroy all your data once you terminate the contract.
- The vendor should maintain cybersecurity-related insurance coverage. You and your vendor should mutually agree regarding what percentages of damage you both will cover in case of any data breach.
In their constant endeavour towards better margins, companies have an increased dependency on vendors and suppliers. With this the third-party risks are also on the rise. Managing these risks is crucial for companies. However, the same should not be treated as a one-time activity as the intent towards third party risk management should be preventive and not reactive. Improved governance coupled with superior security solutions like those offered by Seqrite can help mitigate the associated risks.