How to Reduce Third-Party Security Risks

As businesses become increasingly interconnected and partner to provide products and services for customers, attackers are actively searching for vulnerabilities to exploit within third-party ecosystems. Security leaders must be vigilant navigating third-party risk management (TPRM) to protect their environment and shield customer data from malicious actors.

Several key events like the recent Oracle breach highlight just how vulnerable organizations can be when relying on other providers. While not a breach, the 2024 CrowdStrike incident highlighted the dangers of relying heavily on a single vendor, showing that even a seemingly minor issue with a critical vendor can have significant and widespread consequences. These incidents emphasize the need for organizations to actively assess the security posture of their third-party vendors to ensure they have appropriate security controls in place.

Third-party risk is a top priority for CISOs, as organizations are increasingly vulnerable to supply chain attacks and cloud threats. Here, we examine key third-party risks and how security leaders can mitigate them.

What are Critical Third Party Cyber Risks?

As partner ecosystems continue to expand, so does the risk for organizations. Security leaders are challenged with growing, sophisticated, attack surface threats and environments as they become more dependent on cloud, SaaS, and edge computing. Top cyber risks currently facing security teams include:

Expansion of the attack surface: The dependencies among organizations and their vendors providing cloud infrastructure, software development, and IT services will continue to grow. These interdependencies will also enable the attack surface to grow as cybercriminals find and exploit the weak links along a supply chain. For instance, the Verizon Data Breach Investigations Report (DBIR) found that over 15% of breaches in 2024 involved third parties.

Sophisticated supply chain attacks: As the partner ecosystems grow more complex, so will targeted attacks. Some attacks will use multi-stage infiltration technologies in which attackers target third party software updates, cloud-based platforms, and hardware components. These types of threats are harder to detect as cybercriminals use advanced stealth tactics and weaponize AI.

Greater dependence on cloud and SaaS environments: More than 80% of data breaches involving data stored in the cloud according to IBM’s Cost of a Data Breach Report 2024. Whether it's data exposure through misconfigurations, unauthorized access, or cloud vendor breaches, organizations with high cloud adoption will have to enforce stringent security controls and perform due diligence on cloud partners.

Emergence of IoT, critical infrastructure, and edge computing vulnerabilities: Internet of Things (IoT), operational technology (OT), and other edge computing technologies will further challenge current cybersecurity policies and protections. Many IoT vendors don’t necessarily adhere to strict security standards so securing these environments will continue to challenge security teams.

Download:  Determine the Cost and Impact of a Security Breach

Third-Party Security Risk: Targets and Pain Points

As CISOs work to put policies in place and boost protections with technology, the following third-party risk areas should be tip of mind.

• Inadequate security measures: Providers and partners might not perform due diligence to the extent an organization does. Some may even lag in implementing comprehensive cybersecurity measures, making them prime targets for attackers. Without proper encryption, multi-factor authentication, and incident response protocols, these potential partners and vendors will multiply the threat landscape.
• Visibility gaps and information asymmetry: As supply chains grow more complex, it becomes more difficult to gain visibility into every component of the supply chain—and protect the data and other resources. This lack of transparency is expected to continue making it difficult for organizations to fully understand the security postures of all their partners and creating blind spots that could become entry points for attackers.
  
• Social engineering and insider threats: Social engineering attacks such as phishing account for 14% of breaches involving credentials, according to Verizon’s 2024 DBIR, with the average time for users to fall victim to a phishing email being less than one minute. Social engineering attacks will continue to grow with attackers looking to compromise third-party environments. By exploiting the human element, these attacks use insiders to penetrate environments,
  

• Cloud misconfigurations and human errors: Human error is also a factor in security protections. Any misconfiguration could easily become a vulnerability that attackers exploit. Ongoing security training and audits of cloud environments can help curb this problem, but errors in setting up cloud resources or granting excessive privileges remain significant concerns.
  

How to Mitigate Third-Party Risk in Your Supply Chain

In the face of an expanded attack surface, more sophisticated attacks, and growing threats across complex environments - security leaders can protect their environments from attackers and vulnerabilities in partner and provider ecosystems by following a few key steps.

• Focus on zero trust security: Zero trust’s “never trust, always verify” approach promotes implementing stronger access controls, continuous monitoring, and network segmentation to limit the data from third-party compromises.
• Comply with regulations and frameworks: Privacy laws and cybersecurity regulations will impose stricter guidelines around third-party risk management (TPRM) and resilience. These guidelines could require organizations to be held accountable for the actions of their third-party partners, which will drive demand for transparency and regular audits.
• Leverage AI in risk management: Artificial intelligence and machine learning will play a bigger role in identifying anomalous behavior in vendor activities, assessing compliance, and predicting breaches before they occur. It is important to also keep in mind that AI could introduce its own risks by becoming targets for attackers.
• Perform real-time risk assessment: Continuous monitoring of third-party environments will help organizations gain visibility and detect anomalies for proactive risk management.

Fortify your defenses by taking several of these steps, performing thorough vendor due diligence, and mandating specific cybersecurity standards in third-party contracts.  By investing in advanced threat intelligence to track emerging threats, monitor suspicious activities, and alert on vendor-related risks, organizations will be prepared to face the risks ahead. It’s critical to emphasize ongoing organizational training, awareness, and education around social engineering, incident reporting, and secure configuration practices to better equip employees and partners to avoid risk. 

Learn everything you need to know about the recent Oracle Cloud incident from IANS Faculty Jacob Williams.

Download IANS Executive Communications Incident Briefing: Hacker Claims Theft of 6M Records from Oracle Cloud: Incident Briefing: Hacker Claims Theft of 6M Records from Oracle Cloud

Get a complete breakdown of the critical steps you need to take and how to communicate the Oracle Cloud incident to your executive teams.

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