Gremlins in Your Supply Chain: What You Need to Know About Third-Party Cyber Risk?

As we move further into an age largely dominated by the use of technology, the increased need of having a proper cyber risk protocol becomes even more important. But what do you do if your information is available to vendors or other external companies as part of your normal business operations? Can you rest soundly knowing that they take cyber risk as seriously as you do? Or do you have to wait until something happens and the ramifications cause major harm to your bottom line and reputation?

Here is what you need to know about third-party cyber risk and how to protect your business from this very real threat.

What is Third-Party Cyber Risk?

Before we can discuss how to protect your business against it, it is important to understand what third-party cyber risk actually is. In simple terms, third-party cyber risk is anytime someone outside your organization has access to your data or network. This can be through vendors, software companies, or virtually anyone else in your supply chain. Once they have access, if the information is released or otherwise compromised, this is considered a third-party cyber data or security breach.

For larger companies, who have access to sensitive files can be an incredibly difficult thing to track. Having multiple vendors, with access to your data who may not have cyber risk management protocols, information can easily get into the wrong hands or an event could happen that severely compromises your company’s IT systems. Think of situations where you utilise cloud-based services. What steps are they taking to ensure a breach doesn’t happen? How many people are really getting access to sensitive information? The answer is far too many.

What is the end result for most companies after a third-party data breach? Loss of income, loss of trust with consumers, significant costs of reporting the breach and damage to your reputation and brand. The most difficult part about managing third-party cyber risk is that you don’t know if your vendor is doing what they say they’ll do protect your data and you don’t know who has access to your vendor’s IT network (Fourth party risk).