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Three Things to Know About Third-Party Risk

In today’s digital growing world, it is not enough just to know that your organization’s systems and company web presence are secure. Your risk control program needs to look ahead the edge of your organization to perfectly vet the third-party vendors who will have access to your data without being subject to your internal risk management process. The use of third parties for data handling creates potential risks that can be increased by these third-party defects. How much do you trust your vendors? Still Not sure if they are 100% loyal to your organization? Companies are increasingly dependent upon third parties to support key factors of their operations – from accounting or HR functions to building maintenance and background. However, these relationships can also present companies to cyber security risks based on the cyber security posture of the third parties. Here are five key things to know about third-party risk:

1. Risk Starts Small:

If an intruder is going to target a large business, they will be in need of a small entry point so that it won’t raise mistrust. This means using a valid entry point that they can access while masked as a reliable user. The attacker finds a third party that is less secure– often a smaller vendor with less powerful security rules. They then leverage this path to break into a higher value organization.

2.Risk Increases beyond Primary Vendors:

The range of risk is higher than a single third-party association would advise, as an organization’s third parties can also have their own third-party vendors who are famously known as fourth-parties. Companies must understand how their first-tier vendors manage their own third parties. Third-party risks do not need to include hacks or attacks on a vendor. With the increasing use of cloud storage, unsecured cloud cases managed by third parties are a common cause of data leak.

3.Primary Organizations are held responsible:

For clients, the complexity of third-party relationships can make the full scope of cyber risk difficult to understand. Even if a security risk is due to service providers slack security, in the mind of the customer it will be the main organization that owns responsibility. The company will usually find it difficult to show that it took adequate steps to control its third-party risk through due attention, and will be considered to maintain responsibility even if a third party handled its data.

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