The European Union’s GDPR regulations go into effect in May of this year. In essence, GDPR is a strict data privacy code that holds companies responsible for securing the data they store and process. Although GDPR was approved in April 2016, companies affected by the regulations are still struggling to reach compliance by the May 2018 deadline. A lot of hype has been built up about this systemic unpreparedness, especially in the cybersecurity sector, where GDPR is seen as “the coming storm.” Despite this atmosphere, the main challenge facing GDPR-covered entities remains largely hidden: third-party vendors.
Information technology has changed the way people do business. For better, it has brought speed, scale, and functionality to all aspects of commerce and communication. For worse, it has brought the risks of data exposure, breach, and outage. The damage that can be done to a business through its technology is known as cyber risk, and with the increasing consequences of such incidents, managing cyber risk, especially among third parties, is fast becoming a critical aspect of any organization. The specialized nature of cyber risk requires the translation of technical details into business terms. Security ratings and cyber risk assessments serve this purpose, much like a credit score does for assessing the risk of a loan. But the methodologies employed by solutions in this space vary greatly, as do their results.
Introduction The Internet Footprint There is much more to a company’s internet presence than just a website. Even a single website has multiple facets that operate under the surface to provide the functionality users have become accustomed to. The internet footprint for every company comprises all of their websites, registered domains, servers, IP addresses, APIs, DNS records, certificates, vendors, and other third parties-- anything that is accessible from the internet. The larger the footprint, the more digital surfaces it contains, the more complex are its inner workings, and the more resources it requires to maintain. Because although having an internet presence is basically a given these days, the risk incurred by that presence is not always acknowledged.
The Problem of Digitization The digitization of business has increased the speed of commerce, the scope of customers, the understanding of consumer habits, and the efficiency of operations across the board. It has also increased the risk surface of business, creating new dangers and obstacles for the business itself, not just its technology. This risk is compounded by the interrelations of digital businesses as data handling and technological infrastructure is outsourced, as each third party becomes a vector for breach or exposure for the primary company. The technical nature of this risk makes it inaccessible to those without advanced skills and knowledge, leaving organizations without visibility into an extremely valuable and critical part of the business.
In June of 2017 the U.S. Chamber of Commerce posted the “Principles for Fair and Accurate Security Ratings,” a document supported by a number of organizations interested in the emerging market for measuring cyber risk. The principles provide a starting point for understanding the current state of security ratings and for establishing a shared baseline for assessing vendors in that market.