The recent Latitude Financial cyber attack has shown that third-party vendors can become a significant risk factor in cyber threats.
Third-party vendors provide services and products to businesses, which can include software, hardware, and IT services. However, these vendors can also expose organisations to cyber issues, such as data breaches, cyber attacks, and other security incidents.
My Business General Manager of Products and Sales Phil Parisis said that one of the primary ways third-party vendors can cause cyber issues was through the use of vulnerable software or hardware.
If a vendor’s product or service contains a vulnerability, it can be exploited by cybercriminals to gain access to an organisation’s network.
Vendors often use third-party components in their products, which can introduce vulnerabilities they may not even be aware of. Attackers can exploit these vulnerabilities to gain access to a business’s sensitive information or systems.
Another way third-party vendors can cause cyber issues is through the sharing of sensitive data. Many vendors require access to an organisation’s systems and data to provide their services. However, if this data is not adequately protected, it can be exposed to cybercriminals.
Vendors may not have the same level of security as the organisation they are providing services to, which can lead to data breaches and other security incidents.
“Imagine smaller vendors that businesses work with every day, maybe a small logistics company uses a system that controls their trucks or information about their trucks and what’s inside of packages,” Mr Parisis said.
“That’s the sort of vendor that probably doesn’t have the same security stance and resources as larger companies, and they leave back holes in their systems.”
Third-party vendors can also pose a risk to an organisation’s network through their employees. Vendors may hire employees who do not follow best security practices or who may even be malicious. These employees can be used by cybercriminals to gain access to an organisation’s network or steal sensitive data.
Additionally, vendors may not adequately vet their employees, which can result in unqualified individuals having access to business systems.
One of the most significant risks posed by third-party vendors is the lack of visibility into their security practices. Organisations may not have the ability to audit a vendor’s security practices or even know what security measures they have in place.
Vendors may not share information about their security practices, or they may not have adequate security measures in place. This lack of visibility can make it difficult for organisations to assess the risk posed by a vendor and make informed decisions about whether or not to use their services.
To mitigate the risks posed by third-party vendors, organisations must take several steps, according to Mr Parisis.
“First, they must conduct thorough due diligence when selecting vendors. This due diligence should include an assessment of the vendor’s security practices, such as their security certifications and past security incidents,” he said.
“Additionally, organisations should have clear contractual agreements with vendors that outline their security obligations and expectations.
“Organisations should also monitor their vendors’ security practices and activities regularly. This monitoring can include regular security assessments and audits of vendors’ systems and data access.”
Finally, organisations should have a robust security program in place that includes strong access controls, data encryption, and employee training. These security measures can help mitigate the risks posed by third-party vendors and ensure that an organisation’s sensitive information and systems are adequately protected.
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