Recent technological innovations and advancements directly lead to digital tools for businesses. The continuous reliance on these advanced tools allows cybercriminals to execute cyber threats and malicious activities. Also, businesses' complete dependence on third-party vendors and partners directly supports various functions, ranging from IT services to effective supply chain management.
Nurturing these partnerships and third-party relationships improves operational efficiency and innovation, but it also leads to third party cyber risk and cybersecurity vulnerabilities. However, managing third party cyber risk has continuously become the latest trend and critical aspect of an organization's overall cyber security strategy.
For this reason, businesses must practice evaluating third party cyber risk management to identify, analyze, and organize various cyber threats and risks caused by third party vendors. To reduce the impact of the cyber risks, businesses are using the cyber security services to protect sensitive business information from cyber attacks. This blog discusses the critical strategies to reduce third party cyber risks and ensure your business remains secure.
Third-party cyber risk refers to all the potential threats and vulnerabilities that arise from an organization's continuous reliance on external institutions. These third parties include vendors, contractors, service providers, and suppliers. The primary objective of third party risk management is to protect the organization's reputation, sensitive information, and data security after understanding and controlling the risks introduced by partnerships with external institutions.
Partnering with external entities often gives them access to organizations' business data or critical systems, which can potentially cause cyber attacks, third party data breaches, and other cybersecurity vulnerabilities that compromise the organization's data security.
Third party cyber risks can arise from various sources, such as:
Given the complexities of modern supply chains and current business ecosystems, resolving third-party cyber risks requires a comprehensive and proactive approach.
It becomes essential to perform detailed and thorough due diligence before partnering with or engaging with third-party entities or partners. This process involves evaluating their cybersecurity policies, practices, and overall risk assessment position. Multiple steps to conduct due diligence include:
Background Checks: Conduct or execute background checks or verifications on the primary employees working in external institutions and ensure they have a trustworthy history.
Security Assessments: Conduct a third-party risk assessment to evaluate the vendor's security protocols, incident response capabilities, and compliance with relevant industry regulations.
Risk Assessments: Identify the risks associated with the vendor's services and products, and determine their impact on your organization. In this manner, cybersecurity service providers can help organizations plan third party risk assessment strategies to identify the risks and cyber threats introduced by the external vendors.
Organizations can ensure that establishing clear and enforceable contractual controls is crucial to managing third-party cyber risks. With the help of cyber security service providers, contracts should include multiple and specific cybersecurity requirements and expectations such as:
Incident Response: Businesses should outline incident response and reporting procedures that ensure timely communication and collaboration during cyber incidents.
Security Standards: It is essential to properly define the security standards that external vendors or service providers should follow, including encryption protocols and robust data protection measures.
Audit Rights: For businesses, it becomes crucial to include the right to audit the vendor's security practices regularly and periodically to ensure ongoing compliance with external vendors and service providers' needs and requirements.
External vendors and institutions often need access to your systems and data to perform their services. Managing and monitoring this access is crucial to reducing potential third-party cyber risks.
User Activity Monitoring: For businesses, it becomes crucial to monitor user activities and behavior for suspicious or unauthorized actions. This function helps mitigate potential cyber risks caused by external vendors and service providers.
Access Controls: Practically implement strict and robust access controls by granting the minimum necessary permissions to third parties or institutions. It provides the required security controls by using IT security services for businesses toa avoid third party cyber risks.
Regular Reviews: Review third-party vendors and service providers to ensure access remains appropriate and necessary.
For any business, it is essential to establish a robust cyber security posture, which directly means communicating with third parties regarding compliance and cyber security needs which they should follow, such as implementing strong access controls, data encryption levels, employee awareness and training, incident response training, and the ability to follow strict rules and regulations such as HIPAA, general data protection regulations, GDPR and data requirements.
Execute regular third party cyber risk assessments and audits to evaluate these needs and ensure external service providers should meet these requirements.
Encouraging a culture of cyber awareness within your organization and amongst third-party vendors is critical to reducing third party cybersecurity risks. It provides the importance of cybersecurity services with various advantages and disadvantages. It involves,
Communication Channels: Establishing communication channels with external vendors and service providers to report suspicious activities or potential threats is better.
Training Programs: Businesses must provide regular cybersecurity training to employees and third-party team members, highlighting the importance of cybersecurity, vigilance, and best practices.
Collaboration Activities: To spread awareness about cybersecurity and mitigating cyber risks, encourage collaboration between your cybersecurity team and third party partners to share knowledge and improve security posture.
Utilizing advanced technology solutions can improve your ability to mitigate and manage third party cyber risk effectively. Primary technologies include:
Vendor Risk Management (VRM): Various VRM platforms help assess, monitor, and manage third-party risks, providing a centralized view of vendor security.
Security Information And Event Management (SIEM): SIEM solutions provide real-time information, monitoring, and analysis of security events, helping to detect and respond to potential threats.
Endpoint Protection: Implement robust security solutions to secure devices and endpoints that third parties or service providers access.
Despite best efforts, various cyber incidents can still occur. Therefore, a robust incident response plan is essential for minimizing the impact of such events.
Incident Response Team: It is essential to combine a dedicated incident response team with clearly defined roles and responsibilities. This team monitors and reduces incidents from third-party vendors or service providers.
Communication Plan: Establish a strong communication plan to ensure timely and effective communication regarding an incident with project managers, stakeholders, and third-party service providers.
Response Procedures: Businesses must design, develop, and document detailed incident response procedures, including steps for containment, elimination, and recovery.
Cyber threats evolve constantly, making it necessary to review and update your security policies and practices. Cyber security services can easily be customized to meet businesses' needs.
Vendor Reviews: Conduct a third-party risk assessment with periodic or regular reviews of the third-party vendor's security performance and practices. It is a crucial step in protecting the organization's sensitive data from unauthorized access by external institutions.
Continuous Improvements: Encourage a culture of constant improvement with feedback and suggestions for improving your cybersecurity posture. This process helps businesses use dedicated IT security services to protect data from third-party data breaches and unauthorized access.
Policy Updates: Ensure your security policies reflect the latest threat intelligence and best practices.
Data encryption is a basic component of a robust cybersecurity strategy, especially when dealing with third-party vendors. It lets you easily protect sensitive data from unauthorized access when a third party's system is compromised.
At-Rest Encryption: Practically implement encryption for the data stored on third-party systems to protect it from unauthorized access.
In-Transit Encryption: Businesses must ensure that the data transmitted between their organization and third parties is highly encrypted using secure protocols.
Third-party cyber risk management is not a one-time task but an ongoing process. Regularly assessing and reevaluating risks associated with third-party vendors is crucial to maintaining a solid security posture.
Regular Audits: Businesses must conduct regular security audits of third-party vendors to ensure compliance with your security standards.
Risk Reevaluation: Periodically reevaluating the risk levels associated with third parties, considering the changes in their operations, security practices, or threat environments.
Adjust Strategies: Businesses can remain prepared to adjust their third party cyber risk management strategies based on the findings of their assessments and audits.
Managing third-party cyber risks is essential to a comprehensive cybersecurity strategy. Organizations can effectively reduce these risks by conducting thorough due diligence, implementing strong contractual controls, monitoring third-party access, encouraging a culture of cyber awareness, utilizing technology solutions, establishing a robust incident response plan, and regularly reviewing security policies.
Engaging with a reputable IT consulting firm that understands and prioritizes cybersecurity can further enhance your security posture. As cyber threats evolve, staying proactive and vigilant in managing third party cyber risk is critical for protecting your organization's sensitive data and maintaining operational integrity.