Whether your organization is prepared or not, the risks associated with third-party partnerships will continue to increase. In 2022, approximately 1,802 data breaches exposed the information of more than 422 million individuals in the United States alone. While those numbers are enough to frighten any organization, many reports expect them to continue to rise throughout 2024.

As supply chains expand and the number of vulnerabilities increases, one thing remains the same: your organization needs to be aggressive and diligent regarding third-party risk management (TPRM).

The best TPRM programs are strong enough to prevent crippling data breaches and flexible enough to protect an organization against emerging threats.

Keep reading to discover what TPRM trends your organization should be on the lookout for in 2023, and learn how to adjust your TPRM program appropriately.

1. Attack Surfaces Will Expand

As the use of Internet of Things (IoT) technology grows, it’s no surprise that an organization’s attack surface will expand. This expansion increases tenfold when the organization manages an extensive supply chain of third-party vendors since each vendor’s attack surface is also growing.

One 2019 study predicts that more than 124 billion IoT devices will be in use by 2030. This monumental expansion could have devastating consequences as cybercriminals look to exploit new endpoints with weak data security infrastructures. In 2017, hackers stole 10 gigabytes of data from a Casino by hacking a Wi-Fi-enabled fish tank.

As bizarre as it may seem, events similar to the fish tank incident could become more commonplace as attack surfaces expand. The best way for your organization to protect itself against this emerging threat is to eliminate blind spots and gain visibility across its entire supply chain.

UpGuard’s Vendor Risk allows organizations to seamlessly monitor threats across its vendor ecosystem in one centralized dashboard. Subsequently, UpGuard Vendor Risk grants organizations access to customizable security questionnaires and robust remediation workflows to conduct vendor due diligence and prevent cyber attacks before they occur.

2. Vendor Risks and Vulnerabilities Will Increase

The impact of vendor breaches will arrive at a startling crossroads by the end of 2023: organizations will continue to outsource to more third-party service providers for critical business functions, and supply chain attacks will reach new levels of sophistication. Even 2020’s SolarWinds attack is now estimated to have been a sophisticated endeavor involving over 1,000 hackers.

Moving forward, it will become more and more common for cybercriminals to target supply chains rather than individual companies directly. The only way for your organization to protect against such attacks is to follow Vendor Risk Management best practices and install new protections as needed.

UpGuard can help organizations fortify their TPRM plan by:

  • Keeping an accurate vendor inventory,
  • Automating the vendor risk assessment process,
  • Implementing continuous monitoring,
  • Assessing vendors against 50+ attack vectors,
  • Monitoring fourth-party risks, and
  • Facilitating communication between your VRM committee, your organization’s senior board, and vendors within your organization’s supply chain

Learn about the top Third-Party Risk Management solutions on the market >

3. Vendor Risk and Internal Risk will Converge

While the convergence of vendor and internal risks may seem obvious, this wasn’t always the case. Even five years ago, organizations approached their internal and external ecosystems with different philosophies and cybersecurity strategies. Some organizations may still have designated teams that focus solely on TPRM or the organization’s internal security posture.

However, as supply chains expand and organizations rely on more third-party vendors, the marginal lines between vendor risk and internal risk will continue to blur. And as these lines blur, organizations will realize there is no practical distinction between the risks associated with their internal systems or the vendors within their supply chain.

Moving forward, your organization should take a holistic approach to cybersecurity; vendor risk management should be included within your internal risk program. After all, the continued focus on regulatory compliance (more on this below) will require organizations to perform vendor due diligence with a new level of scrutiny, as many privacy laws are committed to holding organizations accountable for the negligence of their vendors. 

The first step your organization can take to strengthen its TPRM process and integrate it into its overall security framework is to consolidate all risk data (internal or external) into one secure location.

UpGuard BreachSight and UpGuard Vendor Risk empower organizations to efficiently consolidate, monitor, and reduce risks across their internal and external attack surfaces. Together, these two products form a complete toolkit your organization can utilize to elevate its cybersecurity program.

4. ESG Focus Will Escalate

Environmental, social, and governance (ESG) frameworks will continue to receive more TPRM focus as consumer commitment to sustainability, human rights, and ethical business practices grows.

Throughout 2023 and the future, companies will look to exclusively form third-party relationships with vendors that align with their internal values. Currently, no universally accepted framework has emerged as the standard for ESG evaluation. 

However, this could change quickly as any one of the following ESG frameworks emerges as commonplace within a specific industry:

  • Global Reporting Initiative (GRI)
  • Sustainability Accounting Standards Board (SASB)
  • United Nations Global Compact (UNGC)
  • Task Force on Climate-related Financial Disclosures (TCFD)

Organizations looking to get in front of the impending ESG push can use UpGuard Vendor Risk to evaluate vendors against internal values and custom compliance metrics.

5. Automation Will Rise to New Heights

While some organizations may still utilize manual strategies for vendor risk management, the cybersecurity industry no longer accepts spreadsheets or manual reporting as a best practice.

Automation will continue to dominate conversations for years, as every stage of TPRM has become too complex to track manually. The continued rise of automation techniques such as machine learning and artificial intelligence also reflects the industry’s commitment to outpacing the proficiency of cybercriminals.

Organizations that have yet to implement automation into their TPRM program may be blind to hidden data risks, given the inefficiency and ineffectiveness of their risk prevention strategies.

Implementing automation into your TPRM program will allow your organization to:

  • Shorten its vendor risk assessment process,
  • Improve business continuity and decision-making,
  • Increase its risk identification efficiencies,
  • Achieve 24/7 vendor monitoring,
  • Quickly mitigate and remediate security risks,
  • Improve vendor relationships, and
  • Efficiently scale its VRM plan

Learn how UpGuard uses automation to help organizations streamline their TPRM programs>

6. Zero-Day Vulnerabilities Will Continue to Cause Trouble

Zero-day attacks (attacks that occur before developers are aware of a vulnerability) have occurred alarmingly over the past two years. Mandiant reported 81 zero-day attacks in 2021 and 55 over the last year.

Several of these 136-odd attacks were highly effective and resulted in devastating disruptions. Zero-day attacks will continue to have severe consequences throughout 2023 as hackers continue to search for new vulnerabilities and evolve their tactics.

The MOVEit Zero-day attack, which occurred in July of 2023, reportedly affected 122 organizations and exposed the data of roughly 15 million people.

To combat this trend and defend against attacks similar to the MOVEit exploit, organizations should remodel their TPRM programs using zero-trust architecture (ZTA)

A zero-trust approach to data protection and information security allows organizations to increase their third-party risk resilience without sacrificing the operational advantages of vendor relationships. 

Some organizations, such as those regulated by President Biden’s Cybersecurity Executive Order, are required to adopt ZTA into their cybersecurity programs. 

Implementing zero-trust strategies into your TPRM program will involve two main steps:

  • Installing controls for vendor privileged access management (VPAM), and
  • Conducting comprehensive vendor risk assessments throughout the vendor lifecycle

Organizations consistently occupied with new developments should also consider the cybersecurity risks of a project before beginning to develop new technology.

Learn how UpGuard helps organizations identify vulnerabilities and mitigate security incidents>

7. Data Privacy Laws Will Dictate the Conversation

When the European Union’s General Data Protection Regulation (GDPR) became effective in 2018, the data privacy floodgates metaphorically opened. The United Nations now estimates that 71% of countries worldwide have already enacted some form of data privacy sanctions.

While the United States federal government has yet to develop a comprehensive data privacy policy of its own, many U.S. states have passed comprehensive privacy legislation to protect the personal information of state residents.

Data legislation tends to move at a sluggish pace. However, 2023 may be when this changes as laws regulating modern technology become more prevalent.

Every organization should prepare to withstand an onslaught of risk and compliance regulations over the next few years. Organizations should also begin to prepare for new supply chain risks as their vendors navigate the same changing conditions.

Organizations should implement stringent onboarding and vendor assessment protocols into their TPRM programs to protect themselves during this trend.

Learn how UpGuard Vendor Risk uses custom questionnaires to help organizations assess third-party vendor compliance>

How Can UpGuard Help With TPRM?

UpGuard Vendor Risk streamlines third-party risk management programs and helps organizations stay ahead of emerging TPRM trends.

By utilizing UpGuard Vendor Risk, your organization can gain access to the following:

These easy-to-use features and UpGuard’s intuitive design will allow your business to:

  • Manage risks across its entire vendor ecosystem,
  • Manage and monitor all its vendors in one central location,
  • Quickly implement vendor risk management solutions into their existing cybersecurity program,
  • Conduct vendor assessments using customizable security questionnaires,
  • Gather evidence, assess risks, and request remediation in a single automated workflow, and
  • Assess vendors against built-in compliance checklists

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