Comprehensive Vendor Due Diligence: "How to Identify if Your Third-Parties are Vulnerable to a Ransomware Attack"
From the Maze ransomware attack to the Colonial Pipeline incident and Microsoft Exchange Server vulnerability to ISS World, ransomware attacks are rising and targeting all industries. In most cases, the attackers exploit flaws and loopholes in the cyber defenses of third-party vendors to execute their malicious designs.
It is shocking to see that during the second quarter of 2021, the number of victims put up on data leak websites increased by 47 percent compared to the first quarter of the year. Another investigation by CheckPoint found a 102 percent rise in ransomware attacks in 2021, with 29 attacks happening every week.
The bad news is that malware can stay in your systems for up to a year without being noticed. And since the attackers know they’re into a lucrative business, they keep increasing the scope and intensity of the attacks to boost their profits. Meanwhile, victims have paid a ransom of $170,404 on average so far in 2021 to ransomware attackers.
Ransomware attacks cause chaos by holding your data or systems hostage and stopping or slowing down your business continuity. The worst part is that you never know when a ransomware attack will hit your business.
As mentioned above, malicious actors are always on the lookout for vulnerabilities to enter your organizational networks and systems to steal your data. And in most cases, they use the weaknesses found in your third-party vendors’ cyber defenses to target your organization.
But what if you get an advance alert about a looming ransomware attack beforehand? What if you could get a 360-degree view of the threat landscape and get control over the risks?
The good news is that with comprehensive vendor due diligence, you can rest assured that your business is protected against the ransomware risks emanating from your third parties or supply chain ecosystem.
How Comprehensive Vendor Due Diligence Can Protect Your Business
Counting on your third-party vendors to provide your business with critical products and services is the new norm in today’s digital world. Your suppliers help your business grow and stay competitive. But at the same time, they could expose your organization to cyberattacks.
Third-party breaches, including ransomware attacks, are at their peak in 2021. When cybercriminals manage to compromise one of your vendors, they could target your organization with ransomware and hijack your crucial data. This could be catastrophic for your business and supply chain ecosystem. It could also lead to legal and regulatory challenges for your business.
Fortunately, comprehensive vendor due diligence could help shield your business from these risks. It allows you to conduct a thorough screening of your potential vendors before entering into a business relationship. By assessing your prospective partners, you will understand their security position and identify any possible risks they could pose to your organization.
Best Practices for Vendor Relationship and Risk Management
A robust vendor risk management and due diligence program can protect your entire supply chain from ransomware attacks. Here’re the steps you can take to boost your vendor security:
1. Conduct Vendor Risk Assessment
Vendor risk assessment is a crucial part of the vendor selection and onboarding process. It helps you identify and analyze the cybersecurity risks that your business can be exposed to when entering into a partnership with vendors. It can also help you determine the budget and resources required to mitigate risks that may emanate from your third parties.
But vendor risk assessment is not a one-off process. A robust risk assessment is, in fact, a continuous activity. Using a risk assessment framework and tools, you can continuously assess your vendors for new and evolving dangers throughout the business relationship.
Here’re the benefits of vendor risk assessment:
- Identify, weigh, and mitigate the risks posed by your third-party vendors.
- Select your new vendors with due diligence.
- Meet regulatory requirements and improve your third-party contracts.
- Use the findings to develop risk profiles and action plans for risk mitigation.
- Protect your supply chain ecosystem.
- Develop collectively beneficial, strategic business associations.
2. Develop a Vendor Risk Management Framework
The best way to establish a robust third-party vendor security program starts with a solid risk management framework. The framework will help you identify the risks you’re taking and reduce your liabilities. It is a good idea to use the standard frameworks like the ISO and NIST as benchmarks.
Here’re some tips for choosing a solid VRM framework:
- Review your regulatory requirements - Consider the data protection laws, GDPR, and more.
- Understand the requirements of different risk management frameworks:
Do they require taking inventory of your third parties? Third-party risk categorization rules? Requirements for critical activities? Diligence testing and decision-making rules? Audit requirements?
- Determine which framework is best for your business. Not all frameworks may apply to your business or industry. Be sure to choose the relevant and most suitable one.
- Get ready to use more than one framework, depending on your organizational needs.
- Be prepared to use extended enterprise risk management to improve VRM effectiveness.
3. Continuously Identify, Monitor, and Manage Vendor Risk
VRM does not stop with vendor selection and onboarding. Rather, it is an ongoing process. You must monitor and assess your vendors for new risks because technologies are evolving, and so is the threat landscape.
Constant due diligence is imperative to identifying and mitigating new and more sophisticated risks. It also gives you peace of mind because you’re constantly getting updates about the cybersecurity health of your third parties.
But legacy VRM systems and processes are not designed for continuous VRM. The traditional approaches mainly rely on outdated systems like MS Excel and manual work, which is weak, slow, and cumbersome. Fortunately, modern VRM platforms like Vendor360 have your back here.
Modernize Your VRM Process With Vendor360
CENTRL’s Vendor360 is a vendor risk management software designed for speed and effectiveness. Using this platform, you can automate many repetitive tasks in the VRM process. Besides choosing your new vendors with due diligence, Vendor360 allows you to continuously monitor and assess your entire supply chain ecosystem for evolving threats.
Automated risk identification, monitoring, and assessment allow you to make timely decisions and take quick actions. This not only reduces the turnaround time but also boosts productivity and simplifies your entire VRM process.