Why Vendor Cybersecurity Should Be a Priority for Businesses

Most businesses today understand the need for cybersecurity in their own operations. However, internal vulnerabilities aren’t the only cyber-risks they may face. Vendor cybersecurity is also crucial, especially as more companies connect through digital technologies.

Vendor cybersecurity involves recognizing and reducing risks from third-party vendors. That could be a software provider, an original equipment manufacturer (OEM), a freelancer or any other outside party with access to internal systems or data. If companies want to stay safe, they must address security shortcomings in these other organizations. Here’s why.

Third-Party Risks Are Common

One reason vendor cybersecurity is so important is that breaches from third-party vulnerabilities are common. More than half of all organizations have experienced a data breach caused by a third party. It’s easy to see why, too. If one vendor has access to several companies’ data, an attacker can steal from multiple targets by targeting just one system.

Part of why these attacks are so common is that these vulnerabilities are easy to overlook. Businesses know to review their own networks and processes, but third parties’ security doesn’t come to mind as naturally. That’s especially true if the party in question doesn’t play a significant role in regular workflows or is a supplier of a supplier.

Businesses today share data with multiple other parties. Considering how many organizations fall short on cybersecurity best practices, that opens the door to significant vulnerabilities.

Third-Party Breaches Are Damaging

Another reason why businesses should take vendor cybersecurity seriously is that these attacks can cause massive damage. Third-party breaches often have far-reaching consequences, affecting thousands of entities in some cases. One breach could impact not just the company itself but their clients and their clients’ customers.

This ripple effect raises the chances of lost business and legal damages on top of the normal cyberattack costs. Some vendors may also have access to highly sensitive information, such as financial data and customer names and addresses.

The involvement of a third party raises data breach costs by $370,000 on average. Cyberattacks are already expensive without that bump, so companies should do all they can to avoid these situations.

Tips for Better Vendor Cybersecurity

Thankfully, businesses can take steps to reduce these vulnerabilities. Here are some important tips for improving vendor cybersecurity.

Hold Vendors to a Higher Standard

Vendor cybersecurity starts with researching third parties before trusting them. Companies should look at vendors’ history, data policies and any cybersecurity certifications before going into business with them. Only working with trusted, transparent partners will help minimize risks.

These higher standards should carry over into ongoing relationships. Businesses should regularly review vendors’ security practices and require things like frequent penetration tests. These steps will help ensure all parties take an active role in addressing emerging threats.

Minimize Access Privileges

Next, businesses should minimize what even trusted third parties can access. It’s best to follow the principle of least privilege: if a vendor doesn’t absolutely need access to a system or dataset, they shouldn’t have it. This will reduce the damage if a breach does occur.

Making sure they can verify who’s trying to access different systems is important, too. Businesses can use identity and access management tools to ensure everyone is who they say they are.

Create a Contingency Plan

It’s also important to realize that no method is 100% effective. Third-party breaches jumped 17% between 2020 and 2021, with 53% of IT leaders saying they’ve experienced a ransomware attack, the most common third-party breach attack vector. These situations are too likely to assume you’ll always be safe.

In light of these risks, businesses should create an emergency response plan. That includes creating encrypted backups of all critical data, having a clear, effective communication system and pre-defined steps to contain a breach. Making and rehearsing such a plan will help everyone act accordingly faster in an emergency, minimizing the damage.

Vendor Cybersecurity Is Essential for Businesses Today

Vendor cybersecurity is a crucial part of overall security today. As businesses share more with other parties, they must ensure these outside organizations meet higher security standards. If they don’t, it could cause significant damage.

Cybersecurity can be complicated, but effective action begins with understanding the risks. When companies know what could harm them, they can take appropriate steps to protect themselves and their customers.