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As the number of cyberattacks perpetrated against supply chains continues and the disturbing stories that ebb and flow via social media telling us about attacks against global businesses, food networks, water supplies, fuel distribution networks, hospitals, and city governments, it’s clear that third-party breaches are a significant concern. In light of this, it’s evident that security should remain top of mind for business, risk, and security leaders.
There has been a gradual shift in awareness around security concerns, meaning cybersecurity is no longer just seen as a technical problem – it’s now acknowledged as a critical business risk. According to the esteemed research firm Gartner, an astounding 88% of boards now recognize this fact. Business leaders are starting to appreciate the implications for their organizations if they fall victim to a data breach.
Remember, it isn’t just about losing data via a breach – it’s about losing the trust of your valued customers and your reputation. The report also states that 68% of consumers say they would refuse to purchase from a brand that has experienced a data breach. By 2025, 60% of organizations will even consider cyber security risk as a determining factor in conducting third-party business transactions.
Think about this startling statistic: It’s estimated that, by 2031, a ransomware attack will occur every 2 seconds.
However, to combat ransomware and many other cyber risks, organizations are beginning to take a proactive stance to defend their networks, systems, intellectual property (IP), and associated risks when integrating third-party vendors into their supply chains. Companies are actively seeking ways to incorporate practical insights into ongoing vendor assessments and strengthen their security defenses.
How Organizations Are Strengthening Their Defenses
By harnessing the power of artificial intelligence (AI), machine learning (ML), and advanced analytics, businesses are embracing predictive risk profiling to fortify their defenses. This cutting-edge approach allows organizations comprehensive insight into the potential risks their vendor partnerships pose.
Risk management and supply chain service teams responsible for assessing vendors can evaluate suppliers based on specific risk factors and address any security gaps early during onboarding. Most service assessments or compliance reviews are usually a once-a-year task. Conversely, predictive risk profiling is an ongoing, live reflection of a third-party supplier’s strengths and weaknesses.
Predictive risk profiling and strategies such as a layered defense and zero trust should form part of your defense-in-depth approach.
The Power of Predictive Risk Profiling
Predictive risk profiling provides invaluable insights into the level of risk associated with each vendor, enabling an organization to address potential security gaps, safeguard their operations, and protect their valuable assets by only doing business with vendors they know inside and out by their known risk factors.
As business leaders will know, the significance of prioritizing third-party risk cannot be overstated. External suppliers are vital to running a business, whether a small, medium, or large enterprise. Third-party vendors are a critical cog, forming part of your business-as-usual (BAU) operations to help you supply goods and services to your customers.
However, all it takes is for one of your suppliers to have a chink in their organizational armor and bang! It could result in catastrophic consequences.
In a survey conducted by the Ponemon Institute, 64% of individuals emphasized the dire need for tech providers to embrace transparency regarding vulnerabilities, updates, and security patching.
Shockingly, almost half of the respondents expressed dissatisfaction with the feeble security information provided by vendors. It’s a harsh reality that we must face – we cannot rely on vendors to safeguard our digital integrity. Just take a moment to recall the notorious names that have plagued the headlines: Target, SolarWinds, Kaseya VSA, and Accellion.
They all fell prey to cyberattacks through their third-party relationships.
Harnessing the Power of AI, ML, and Advanced Analytics
Acting as your risk compass, powered by AI, ML, and advanced data analytics, predictive risk profiling delves into vast seas of data to produce a comprehensive risk assessment. The data is held within a Data Exchange and is part of a third-party cyber risk management (TPCRM) platform. Powered by a robust dataset, offering comprehensive analytics and valuable insights to quickly identify, evaluate, and effectively manage risks throughout an organization. It also enables you to mend any potentially risky vendor relationships, ensuring compliance with the strictest governance requirements.
Predictive risk profiling can help you conquer the challenges of SOC2, HIPPA, GDPR, ISO, PCI-DSS, and the CCPA while safeguarding your organization’s confidentiality, integrity, and availability (CIA).
Peering into the Cyber Security Crystal Ball
Imagine accurately predicting how different companies in your ecosystem will react to a comprehensive security assessment. The ability to predict has become a reality, with some of the security platforms able to predict with an astounding accuracy rate of nearly 85%.
A TPCRM system considers various factors like vulnerability assessments, real-time threat intelligence, and critical attributes such as industry, location, past behavior, controls, and technologies employed by vendors.
By embracing the power of predictive risk profiling, you can liberate yourself from the burden of manual risk scoring and invest valuable time crafting effective remediation strategies.
Factors to Consider
- Relying on Old Methods
Supply chain risk assessment is essential in evaluating potential threats and vulnerabilities from partnering with a specific supplier. It involves considering factors such as the supplier’s access to sensitive data, security practices, and track record in maintaining confidentiality.
Yes, businesses can make informed decisions and mitigate potential risks by conducting an assessment like this using traditional methods. However, using a manual process to assess a supplier takes time and resources.
- Security Requirements
When entering into agreements with third-party suppliers, it’s essential to establish precise security requirements. These requirements should outline the expectations and obligations regarding protecting sensitive information. Specify the necessary security protocols, such as encryption measures, access controls, and incident response procedures.
By setting these expectations upfront, businesses can ensure that suppliers understand the importance of security and are committed to maintaining the highest standards.
Remember that security is not a one-time consideration; it requires ongoing monitoring and assessment that involves conducting audits requesting compliance and penetration test reports to identify potential vulnerabilities.
Foster a Culture of Security
Developing a culture of security is crucial for effective security management. It goes beyond just implementing technical measures – it involves instilling a security mindset within the organization and among third-party suppliers. This can be achieved by educating employees and suppliers about the significance of security and offering training on best practices.
Encouraging open communication and promoting the reporting of any potential security incidents is also essential. By fostering a security-conscious culture and purpose, businesses can enhance their overall security posture and minimize the risk of breaches.
The Bottom Line
In today’s world, where data theft and hacking incidents have become commonplace, organizations of all sizes must prioritize evaluating and managing their supply chains. Businesses can effectively minimize potential risks and protect their sensitive information by conducting comprehensive risk assessments, setting specific security requirements, regularly monitoring supplier security, and fostering a culture of security awareness.
Understanding that your suppliers’ security practices directly impact your organization’s overall security is essential, making this aspect of your business operations critical.
By actively monitoring supplier security using predictive risk profiling, businesses can address any third-party weaknesses promptly and ensure that their supply chain security remains strong.
