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What Are Third-Party Security Risks?

4 min read
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Third-party vendors are essential for most organizations as they provide necessary resources and create time saving benefits in labor, which allows organizations to move forward with other projects. Simultaneously, these third parties are often used as the gateway for cybercriminals to reach a much wider number of targets and can become difficult to defend against.

In this blog, we’ll discuss some common behaviors that increase third-party risks, how to identify weaknesses in third-party cybersecurity plans and best practices for managing third-party risks.

4 Common Third-Party Risk Behaviors and Habits


Third-party security risks are potential threats presented to an organization from outside parties. To better respond to third-party security risks, it’s essential for your organization to recognize behaviors and factors that may amplify these threats.

Here are just a few of those risky behaviors:
  1. Increasing dependence on third parties: Organizations appear to be sending their work to third-party vendors at a rising rate. While outsourcing can prove beneficial as it can contribute to providing the best products/services to customers, in turn, more outsourcing to third parties means an increased exposure to third-party risks.
  2. Failing to complete vendor due diligence: Many organizations aren’t doing enough to ensure their vendors meet their needs and acceptable security practices. Inefficient due diligence may cause your organization to overlook standard vendor issues which could lead to data breaches and regulatory violations.
  3. Accepting careless software security practices: It’s not uncommon for organizations to recklessly run third-party software without performing due diligence on security controls. The software version is usually outdated and less secure, leaving their security control system vulnerable to attack.
  4. Granting excessive privileges: Third parties may be granted network access privileges beyond what is needed to perform their job. This exposes your organization’s confidential and sensitive data which may lead to a third-party data intrusion.

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Weaknesses in Third-Party Cybersecurity Plans


Part of an organization’s initial due diligence of a potential third-party vendor is reviewing their cybersecurity plan that sets the standards of behavior and activities. Identifying gaps or weaknesses in a third party’s cybersecurity plan will demonstrate the risk of that vendor to your organization.

Beware of the following third-party security risks that can leave your organization vulnerable to threats:
  • Lack of security testing:
    • Outdated or irregular penetration testing
    • No regular vulnerability assessments
    • No remediation process for findings from testing or assessments
    • No regular social engineering or phishing exercises
  • Lack of data security:
    • No board of directors or senior management approved security policy
    • Plan doesn’t include:
      • Data classification
      • Encryption of data in transit and at rest
      • Principle of least privilege implemented
      • Logical access controls and access review
      • Multi-factor authentication for remote access
      • Electronic media sanitization and physical and digital media destruction
  • Lack of contractor and third-party vendor management:
    • Incomplete background checks on contractors
    • Irregular or lack of security awareness training for contractors
    • No third-party vendor due diligence and ongoing monitoring in place
  • Lack of incident detection and response:
    • Ineffective incident management process
    • No downtime or breach notification
    • Absence of anti-malware or antivirus on the servers
    • Weak network segmentation
    • Poor security appliances (i.e., instruction detection and/or prevention systems)
    • No patch management
    • Inconsistent security event log management and review

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4 Cybersecurity Plan Components for Managing Third-Party Security Risks

To protect your organization from third-party security risks, it’s important to ensure that your vendor has a comprehensive cybersecurity plan that addresses the following components:
  • Prevention: Your vendor should be actively preventing cybersecurity incidents through regular vulnerability, penetration and social engineering testing. This will reveal how well their environment is secured and help identify any weaknesses so they can be promptly addressed.
  • Detection: Make sure you understand the details surrounding your vendor’s incident detection controls such as firewalls, anti-malware products, intrusion detection and prevention systems, security event log management and review and patch management practices.
  • Response: While prevention and detection are key in incident management, it’s also important to understand how your vendor will respond and recover. Ensure that the vendor specifies how to respond to different types of incidents and that timeliness of their notification process is acceptable to your standards.
  • Due diligence and ongoing monitoring: For any potential third-party vendor or contractor, a thorough vetting process must be in place to reduce risk to your organization. Vendors and contractors must be subject to ongoing monitoring which includes due diligence review and regular security awareness training.

Some of the costliest data breaches begin with third parties. Your organization can avoid such unfortunate outcomes by understanding third-party risk behaviors and taking the time to evaluate the risks that each potential third party poses to your organization. Only work with third parties that have responsible security protocols that will best protect your organization from reputational damage, regulatory action or financial loss.

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