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The business ecosystems are a complex web of intricate digital interconnection.
This complexity holds excellent opportunities but also many risks. Vulnerabilities within one entity can cause a chain reaction and cascade implications for all.
Navigating this web of dependencies, organizations must recognize the heightened risk introduced by third-party affiliations. Beyond just understanding these risks, organizations need proactive measures to manage them. Delving deeper into some of the prominent cyber threats today, we can appreciate the significance of third-party cyber risk management in safeguarding an organization's digital assets.
Common cyber threats
1. Advanced Persistent Threats (APTs):
APTs are highly sophisticated and targeted cyber attacks typically associated with nation-states or organized cybercriminal groups. They involve a prolonged and stealthy approach, where attackers gain unauthorized access to a network and remain undetected for an extended period. APTs often focus on espionage, data theft, or sabotaging critical infrastructure.
2. Zero-Day Exploits:
Zero-day vulnerabilities are software vulnerabilities unknown to the vendor and, therefore, unpatched. Cyber attackers can exploit these vulnerabilities to gain unauthorized access or control over systems or applications before the vendor can release a fix.
3. Ransomware Attacks:
Ransomware attacks encrypt a victim's data, making it inaccessible until a ransom is paid to the attackers. Advanced ransomware strains, such as those seen in the past few years, use advanced encryption techniques, often demand large ransoms and may also involve data theft, increasing the pressure on victims to pay.
4. Nation-State Attacks:
State-sponsored cyber attacks involve governments using their cyber capabilities for espionage, sabotage, or influence campaigns. These attacks often involve advanced techniques and substantial resources.
5. AI and Machine Learning-Powered Attacks:
Cyber attackers are increasingly using AI and machine learning to enhance their attacks. AI can be used to automate tasks, create more convincing phishing emails, and even optimize attack strategies.
6. DDoS (Distributed Denial of Service) Attack:
DDoS attacks flood systems, servers, or networks with superfluous requests to overload systems and prevent legitimate requests from being fulfilled. Often executed using a botnet (a network of compromised computers), these attacks aim to disrupt services by overwhelming the target with a flood of internet traffic.
Risk Assessment and Reduction:
Let’s dive deeply into these threats and see how Third-Party Risk Management dramatically reduces them. As stated above, “The business ecosystems are a complex web of intricate digital interconnection that holds excellent opportunities but also many risks”.
Leading to the conclusion that cyber risks are not more than “just” the security measures we take on our own. It is also the security measures each of our business partners is taking on himself. Like the butterfly effect concept, a minor breach in the supplier’s security can cause a massive disruption for another organization.
Here’s how Third-Party Risk Management can help reduce these risks:
1. Advanced Persistent Threats (APTs):
Given that many organizations rely on a network of vendors, suppliers, and other third parties for their business operations, understanding and managing the risks associated with these entities is vital. Rigorous vetting of third parties can identify weak links that might be exploited as entry points for APTs. Consistent communication regarding threat intelligence can help with the following:
Understanding the Attack Surface - Knowing which third parties have access to your network or sensitive information allows you to gauge the size and complexity of your attack surface.
Access Control - Limit third-party access to a need-to-know basis. Implementing strict access controls, like the principle of least privilege, can prevent an APT from moving laterally through a network if they gain access via a third party.
Vendor Assessments - Conducting comprehensive security assessments can uncover vulnerabilities or weak security postures that APT actors might exploit.
Segmentation - Create Physical or virtual segmentation to ensure that third-party access does not extend beyond designated boundaries.
Unified Threat Intelligence - A shared threat intelligence can offer a broader view of the threat landscape. This collective knowledge can be invaluable in identifying and countering APTs.
2. Zero-Day Exploits:
Third-party risk management (TPRM) is instrumental in mitigating the risks associated with zero-day exploits, which are vulnerabilities unknown to the vendor and thus unpatched. By continuously assessing and monitoring the security postures of third-party vendors, organizations can identify potential weak links in their supply chain that might be susceptible to such exploits. Through rigorous vendor assessments, enforcing strict security requirements in contracts, ensuring timely patching and updates, and fostering a collaborative approach to share threat intelligence, TPRM can reduce the chance that a third party's compromised system due to a zero-day exploit becomes a gateway for attackers into the organization's network.
3. Ransomware Attacks:
Organizations can reduce the impact of a ransomware attack by ensuring third parties implement robust backup and recovery processes. Advanced Endpoint detection solutions as well as a tight perimeter. Collaborative incident response drills can also prepare both entities for timely action.
4. Nation-State Attacks:
A thorough geopolitical risk assessment can identify third parties that may be on the radar of nation-state actors. Recognizing that nation-state organizations often leverage private companies' services, solutions, and products amplifies the need for safeguarding interactions. Implementing Third-Party Risk Management, which emphasizes encrypted communications and stringent data handling procedures with these third parties, can significantly curtail the potential for nation-state attacks.
5. AI and Machine Learning-Powered Attacks:
Mandating third parties to employ advanced AI-powered cybersecurity solutions can act as a countermeasure in countering the threat posed by these advanced cyber-attack techniques:
Data Access Control - Limiting third-party access to only essential data can reduce the potential impact of an AI-driven breach.
Vendor Assessments - Ongoing evaluation of the vendor’s AI and ML capabilities to ensure their awareness of potential AI-powered threats and proper defense measures.
6. DDoS (Distributed Denial of Service) Attack:
By meticulously assessing the security postures of third-party vendors, organizations can ensure that their partners have robust DDoS protection mechanisms.
Why is this essential?
A successful DDoS attack on a vendor can indirectly disrupt or exploit the primary organization.
By incorporating rigorous vendor security assessments and continuous monitoring into their TPRM strategies, organizations can identify potential weak links and ensure that they and their partners are fortified against such attacks, thus reducing the cascading impact that can occur when one entity in the interconnected business ecosystem falls victim.
These examples do not mean that, as a CiSO, you must also take care of your vendor’s cybersecurity. We are sure you have enough on your shoulders. Having said that, you need to understand the destructive potential of these external risks on your organization, make sure your vendors are aware of these threats, and pay the same attention to them as you are. Vendors not complying with your security requirements should be re-evaluated, as they are the next threat to your organization.
Important Third-Party Risk Workflows
Implementing an effective third-party cyber risk management process requires streamlined workflows that ensure efficiency and thoroughness. Here are recommended workflow steps to manage third-party risks:
Initial Risk Assessment:
Identify and categorize third parties based on the data they access and the criticality of their services.
Document inherent risks associated with each third party.
Conduct an initial risk assessment using standardized questionnaires or tools.
Due Diligence & Selection:
Evaluate the security controls of potential third parties. Utilize the security control checklist mentioned previously.
Review third parties' past security performance, breach history, and reputation.
Make informed decisions by comparing potential third parties' security posture and risk profiles.
Contract & SLA Development:
Clearly define security expectations and obligations.
Include clauses for regular security audits, breach notification requirements, and data handling protocols.
Define penalties for non-compliance and establish a process for periodic contract review.
Continuous Monitoring & Reporting:
In real-time, use automated tools to monitor third-party networks and systems for vulnerabilities and threats.
Establish key performance indicators (KPIs) and regularly report on third-party security performance.
Use threat intelligence platforms to stay updated on emerging threats and vulnerabilities.
Periodic Security Audits:
Schedule and conduct regular security audits of third parties to ensure compliance with contractual obligations.
Utilize both automated scanning tools and manual testing, such as penetration testing.
Document findings and ensure remediation actions are taken on identified vulnerabilities.
Incident Management & Response Coordination:
Define and practice incident response workflows that involve third parties.
Ensure seamless communication channels for swift coordination during security incidents.
Review and improve the incident response process post-incident.
Review & Termination:
Periodically review the performance and security posture of third parties.
Decide on contract renewals based on these reviews.
In case of contract termination, ensure safe transition or deletion of data and access revocation.
Training & Awareness Building:
Organize joint security training sessions or webinars for third parties.
Share security best practices, updates, and threat intelligence to foster a collaborative security approach.
Feedback & Continuous Improvement:
Gather feedback from third parties on the risk management process.
Identify areas of improvement and refine workflows based on evolving threats and business needs.