Businesses don’t stand and operate alone. Organizations partner with an average of 10 third-party vendors to manage their operations.
Especially when talking about large corporations—they collaborate with various other organizations or firms helping them manage and advance their operations.
These firms include suppliers, manufacturers, service providers, software vendors, distributors, resellers, and agents.
Because of this large and diverse network of companies working together to keep a business’ operations afloat, they all have to rely on each other. While the setup is empowering, there are also risks involved when it comes to cyber security.
An attack against one of these parties can affect all its business partners, creating a domino effect that affects each one’s operations and business resiliency.
Because working with a third party entails giving them physical or digital access to your data and sensitive information, there’s a high chance that your data can get entangled if they become victims of a cyber attack.
The Types of Third-Party Risks
Working with third parties exposes a business to six categories of risks:
- Cyber security - Attackers target sensitive information of an organization by infiltrating its supply chain.
- Compliance - Legal penalties that an organization faces when its business partners fail to comply with laws and regulations.
- Financial - Financial implications of vulnerabilities affect how an organization delivers its services. This can come in the form of a loss of revenue or severe financial expense.
- Operational - Affects a business's operations, such as causing downtime.
- Reputation - Data breaches can tarnish the reputation of all business partners, undermining brand trust and loyalty.
- Unaligned strategies - Causing failed ventures, security risks, and loss of business growth.
How to Manage Third-Party Risks
Many organizations make the mistake of thinking that they can manage third-party risks by simply implementing technical guardrails like email security, firewalls, etc. But these are often not enough to completely protect them and their data.
The ultimate solution to third-party risk management is implementing security awareness training, which targets the element of human error responsible for 80% of cyber attacks.
"To ensure the information that organizations share remains safe and confidential, all business partners need to have the same level of security awareness," says Pamela Velentzas, vice president of marketing at Fortra's Terranova Security to Technical Record.
Organizations should implement organization-wide security awareness training, helping the firm and its staff maintain compliance, remain operational, reduce risks, and maintain credibility.
This security awareness training should be consistent for all direct and permanent employees working in the organization and those working for third-party vendors, including freelancers, consultants, interim workers, temporary staff, and special service providers, whether on or off-site.
As such, you can ensure that everyone involved in your business operations knows the standards and protocols to follow when handling sensitive information.
This clarity also helps with regulatory compliance, guaranteeing that your employees are aware of rules concerning GDPR, CPRA, and other compliance laws and regulations concerning cyber security.
Implementing a Successful Security Awareness Training
Security awareness training is key to third-party risk management. But for it to be truly effective, it needs to be invested in and implemented properly. Here are some tips for implementing robust cyber security training:
- Make it relevant to the people taking the training
- Make it specific to their function and role in the business
- Make it interactive and fun
- Deliver the training in segments that aren't too long
- Tailor the training to the individual's learning capacity and motivation level
While these are general tips to improve your security awareness training, there is no one-size-fits-all formula. Every organization is different, and so will their security awareness needs.
To curate the best training strategy for you, you should evaluate the risks posed by your third-party vendors and monitor potential security threats. This will help you create a plan that targets the risks you are exposed to and ensures the best results.
Learn more about third-party risk management from Terranova Security's VP of Marketing, Pamela Velentzas
Read her feature article in Technology Record.
