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Third-Party Cyber Risk
What is a third party?
A third party is any person or business that provides goods and services to another entity. Third parties include law firms, accounting firms, marketing companies, consultants, software development teams, maintenance services, IT vendors, cleaning services, and thousands of other business relationships that help modern enterprises operate efficiently.
What is third-party cyber risk?
Third-party risk is the risk posed by vendors within an organization’s supply chain. While third-party risk may take a variety of forms, cyber threats are thought to be the most significant third-party risk for organizations that provide vendors with access to their data or IT environment.
Third-party cyber risk is the level of potential cybersecurity threats an organization faces from the vendors and partners within its supply chain. While there is risk associated with every vendor relationship, cyber risk is generally higher because organizations must trust each vendor’s own cybersecurity measures. Third-party cyber risk includes the potential for data breaches and attacks to an organization’s network due to vulnerabilities within a vendor’s IT environment. For many organizations, these attacks can cause financial losses, damaged reputation, and significant legal or regulatory consequences.
Because vendors, partners, and suppliers often have access to an organization’s IT environment, it’s essential to manage third-party risk to ensure that an organization’s cyber security defenses cannot breached by a threat piggybacking on legitimate communication with vendors.
What's the best way to reduce third-party cyber risk?
Three out of five data breaches originate with a vendor. As companies increasingly rely on outsourcing and cloud-based technology, third-party cyber risk is a growing concern for risk managers today. As supply chains grow and become more interconnected, that number is expected to rise.
In the past, organizations have used yearly, manual self-assessments completed by vendors to understand and mitigate third-party cyber risk. However, this approach is no longer flexible or scalable enough to manage rapidly growing vendor networks. And these periodic assessments can’t provide data that risk managers need most – real-time insight into cyber liability and risk.
As the volume and severity of threats continues to escalate, many organizations are adopting continuous monitoring technologies that deliver daily visibility into the security performance of each third-party vendor. Continuous monitoring solutions allow security teams to act swiftly to mitigate risk when a vendor’s security posture changes.
Bitsight for Third-Party Risk Management gives security teams what they need most to mitigate third-party cyber risk, including automated tools and continuous monitoring capabilities.
How continuous monitoring helps reduce risk
Internal continuous monitoring has been an invaluable tool for security operations centers as they combat attacks and manage vulnerabilities. By helping to quickly identify threats, continuous monitoring tools enable security teams to take swift action within their organization.
However, adoption of continuous monitoring for third-party risk management has been slower. In part, this is because organizations have lacked the visibility into vendors’ security measures and controls. To manage third-party risk and supply chain security, risk managers have had to rely on security assessments performed by vendors themselves, often conducted only once each year.
While self-assessments provide some help, they are conducted so infrequently that they can’t provide continuous or real-time insight into a vendor’s security posture or adherence to cyber risk best practices. Additionally, self-assessments are inevitably subjective and must be verified with objective context – a costly and time-consuming prospect.
A program for continuous monitoring can deliver clear insight into third-party risk and cyber security issues. To implement continuous monitoring, risk managers need daily updates that deliver objective, verifiable information about a vendor’s security posture. That’s where Bitsight Security Ratings can help.
Managing every type of third-party risk
While data breaches originating in the supply chain are the most visible form of vendor-related threats,
third-party risk is actually a much broader concern. Your TPRM program must address risk in six
essential areas.
- Regulatory and compliance. A vendor’s failure to comply with regulations concerning cybersecurity, financial data, labor relations, or environmental law may cause your company to become noncompliant as well.
- Finances. The action of a third-party vendor can have a financial domino effect, particularly when a vendor’s failure leads to your inability to deliver results, sell products, or meet contractual obligations.
- Reputation. When a vendor’s business reputation takes a hit, your own company may experience blowback. A vendor’s labor unrest, legal violations, dissatisfied customers, or security incidents can all have a negative impact on your own reputation.
- Operations. When vendors are vital to maintaining smooth operations, any hiccup or breakdown in vendor performance can throw a wrench in your own business operations.
- Strategic concerns. When a supplier makes risky decisions that aren’t aligned with your own business strategy, there’s a risk that their actions may hinder your ability to achieve strategic objectives.
- Cybersecurity. While your own security program may be highly effective, it’s often hard to know how well your suppliers are maintaining a strong security posture. Attackers frequently penetrate well-protected organizations by targeting weak links in the supply chain.
The right third-party risk management and exposure management solution must help you identify,
monitor, and mitigate risk in each of these areas. At Bitsight, this is our wheelhouse.
How Bitsight revolutionizes third-party cyber risk
Continuous monitoring of third-party cyber risk delivers invaluable data insights into your vendors’ activity and security posture. With Bitsight for Third-Party Risk Management, risk managers can lower the time and cost of risk management activities while scaling easily to manage assessments for a growing pool of vendors.
Bitsight empowers security and risk teams to take decisive action to manage cyber risk. We enable you to:
- Be proactive about risk. Rather than waiting to gauge risk until it’s time for a scheduled assessment, risk managers can continuously monitor the actions of vendors and trigger an assessment immediately when there are changes to security posture or Bitsight security ratings.
- Tailor assessments for each vendor. Because each vendor represents a different level of third-party cyber risk, using identical assessments for all vendors can increase costs and place more strain on risk management teams, especially when working with hundreds or thousands of vendors. With Bitsight, risk managers can tailor assessments to each vendor and address specific areas of concern based on changes in security ratings or risk vectors.
- Create tiers of vendor assessment. Risk managers can establish tiers of vendors, assessing critical vendors more often than non-critical companies. Continuous monitoring with Bitsight helps set reassessment policies and identify the tier to which each vendor belongs.
- Gain greater context for self-assessments. Vendor self-assessments are an important part of third-party cyber risk management, but they don’t show the full picture. With Bitsight, risk managers can continuously monitor security posture of vendors to validate their assessments with objective information and flag areas for follow-up.
Bitsight for Third-Party Risk Management offers real-time insight into the riskiest issues impacting your vendor network. By allowing risk managers to continuously monitor and measure the security performance of vendors, Bitsight simplifies cyber risk assessment and dramatically reduces third-party cyber risk.
Bitsight Security Ratings are the key to operational risk management with the Bitsight platform. Bitsight’s daily ratings are based on objective and externally verifiable data that illuminates the security posture of an organization and its third-party vendors. Evaluating risk vectors like the number of botnet infections, publicly disclosed breaches, file sharing behavior, out-of-date devices, and TLS/SSL certificates, Bitsight develops a Security Rating for each vendor that gauges their security posture and alerts risk managers when there are changes in behavior or status that may increase risk.
With continuous monitoring through Bitsight for Third-Party Risk Management, organizations can more easily manage third-party cyber risk in a growing vendor network, making confident, data-driven decisions to prioritize resources while driving risk reduction across the vendor portfolio.
Why trust Bitsight?
An industry-leading solution
Bitsight is the world’s leading provider of cyber risk intelligence, transforming how security leaders manage and mitigate risk. Leveraging the most comprehensive external data and analytics, Bitsight empowers organizations to make confident, data-backed decisions and equips security and compliance teams from over 3,300 organizations across 70+ countries with the tools to proactively detect exposures and take immediate action to protect their enterprises and supply chains. Bitsight customers include 38% of Fortune 500 companies, 4 of the top 5 investment banks, and 180+ government agencies and quasi-governmental authorities, including U.S. and global financial regulators.
Extensive visibility
Bitsight operates one of the largest risk datasets in the world. Leveraging over 10 years of experience collecting, attributing, and assessing risk across millions of entities, we combine the power of AI with the curation of technical researchers to unlock an unparalleled view of your organization. Bitsight offers more complete visibility into important risk areas such as botnets, mobile apps, IoT systems, and more. Our cyber data collection and scanning capabilities include:
- 40 million+ monitored entities
- 540 billion+ cyber events in our data lake
- 4 billion+ routable IP addresses
- 500 million+ domains monitored
- 400 billion+ events ingested daily
- 12+ months of historical data
Superior analytics
Bitsight offers a full analytics suite that addresses the challenges of peer comparison, digital risk exposure, and future performance.
Ratings validation
Bitsight is the only rating solution with third-party validation of correlation to breach from AIR Worldwide and IHS Markit.
Quantifiable outcomes
Bitsight drives proven ROI with significant operational efficiency and risk reduction outcomes.
Prioritization of risk vectors
Bitsight incorporates the criticality of risk vectors in to calculation of Security Ratings, highlighting risk in a more diversified way to ensure the most critical assets and vulnerabilities are ranked higher.
