[Blog](/blog) Show links Resources [Blog](/blog) [Breaches](/breaches) [eBooks, reports, & more](/resources) [Events](/events) [News](/news) [Third-Party Risk Management](/category/third-party-risk-management) Show links Categories [Attack Surface Management](/category/attack-surface-management) [Company News](/category/company-news) [Compliance and Regulations](/category/compliance-and-regulations) [Cybersecurity](/category/cybersecurity) [Data Breaches](/category/data-breaches) [DevOps](/category/devops) [Human Cyber Risk](/category/human-cyber-risk) [Risks and Vulnerabilities](/category/risks-and-vulnerabilities) [Third-Party Risk Management](/category/third-party-risk-management) [Vendor Risk Management](/category/vendor-risk-management) [What is Vendor Risk? The Big Impact of Third-Party Breaches](/blog/vendor-risk-impact-of-data-leaks-by-your-third-party-vendors) Publish date October 13, 2026 {x} minute read # What is Vendor Risk? The Big Impact of Third-Party Breaches [Get a demo](/contact-sales) [Free trial](/demo) [Download the PDF guide](/resources/artificial-intelligence-and-the-future-of-tprm) [Free trial](/demo) Written by [Kaushik Sen](/team/kaushik-sen) Chief Marketing Officer Kaushik has a background in software engineering, enterprise solution architecture, and data analytics. He brings a unique, data-driven perspective to cybersecurity education. Reviewed by [Abi Tyas Tunggal](/team/abi-tyas-tunggal) Writer and Senior Product Manager at UpGuard. Abi's work has influenced leaders across cybersecurity, technology, and financial services. Table of contents eBook Artificial Intelligence and the Future of TPRM Free resource ### Artificial Intelligence and the Future of TPRM [Download now](/resources/artificial-intelligence-and-the-future-of-tprm) UpGuard’s researchers regularly uncover and report on corporate [data breaches](/blog/data-breach). We often find that the breach is not directly caused by the company, but by one of their [third-party vendors](/blog/third-party-vendor). This series of posts is about a less-understood aspect of vendor risk, [**data breaches by third-party vendors.**](https://www.upguard.com/blog/data-protection-for-third-parties) We will run you through many types of data breaches, how they relate to your third-party vendors, and ultimately what you can do to prevent them from hurting your business. Third-party vendors are common targets of [industrial espionage](/blog/corporate-espionage). So, maybe you work for a large multinational that outsources entire business functions? Or a small-medium business that runs its operations using SaaS (software-as-a-service) applications, paid for with a credit card? Using third-party vendors is now the rule, rather than the exception.\ \ To provide value to your business, your vendors typically need access to at least some of your important data. From trade secrets through to API keys, you’re trusting your third-party vendors with [sensitive data](/blog/sensitive-data). **By trusting your vendors with sensitive data, you’re then also taking on the associated vendor risk of a data breach.**\ \ There are many different kinds of sensitive data that can be exposed, each with their own particular exploits and consequences.  ## System Credentials Let’s start with “system credentials,” the data that grants access to other resources or capabilities. The impact of a credential breach is typically high and so is the associated risk level, as they are an enabler for attackers to compromise other, even more sensitive information.\ \ By better understanding what types of system credentials exist, why they matter, and what the potential consequences of their exposure are, you can more effectively take action to control this information and prevent future data breaches.\ \ Exposed credentials are a well-known form of data breach, but there are many different kinds of credentials, some more obvious than others, and the consequences of a breach will differ accordingly.\ \ And finally, the data exposures we reference in these articles are found on the open internet, not the [dark web](/blog/dark-web). Our research [corroborates that of other security experts](https://www.troyhunt.com/making-light-of-the-dark-web-and-debunking-the-fud/), that the dark web is overestimated as a source of data breach information— by the time such data reaches the dark web, it has already been exploited.\ \ **Why does this matter?** Because catching data exposures on the open internet is a proactive strategy to secure data **before** it gets in the hands of those who would try to profit from it on the dark web. ## What Steps Can I Take To Reduce Vendor Risks? You now know that your vendors could be [exposing your business to risk](https://www.upguard.com/blog/what-is-third-party-risk) in a number of ways: * By leaking data from **your systems** * By leaking data from **their systems** * By **their** **vendors** leaking data. These are your [fourth-parties.](/blog/what-is-fourth-party-risk) This is a pretty broad spectrum of risk. We highly recommend that you consider the potential for [data leaks](/blog/data-leak) as critical component of your vendor [risk management strategy](/blog/information-risk-management). A **best practice approach** (we're biased, it involves us) could look like this: * Start proactively monitoring your own company's technology and cyber [security posture](/blog/security-posture). Use [UpGuard Breach Risk](https://www.upguard.com/product/breach-risk) to monitor your external exposures. * Use a formal process to onboard your third-party vendors. UpGuard's [Vendor Risk Management software](https://www.upguard.com/product/vendor-risk) helps you continuously monitor their risk levels to your business. This is achieved through a combination of automated [security ratings](https://www.upguard.com/blog/what-are-security-ratings) and [vendor security questionnaires](#). You can learn more about this topic in our [brief history of vendor scoring](https://www.upguard.com/blog/a-brief-history-of-vendor-risk-scoring). * Finally, probe even deeper to understand your fourth-party vendors, their associated risks and your exposure to them. [UpGuard Vendor Risk](/product/vendorrisk) takes care of this too. **This is just one approach. **You should do what is right for your business. But whatever you do, please don’t ignore the issue! In today's world, you are just one SaaS signup form away from a data breach. In 2018, a proactive [vendor risk management](/blog/vendor-risk-management) strategy has become a critical requirement to stay in business, not just an optional capability proposed by [Information Security](/blog/information-security) managers. eBook Artificial Intelligence and the Future of TPRM Free resource ### Artificial Intelligence and the Future of TPRM [Download now](/resources/artificial-intelligence-and-the-future-of-tprm) ## Related posts Learn more about the latest issues in cybersecurity. Third-Party Risk Management #### [The Evidence Is In: UpGuard Named a Leader in the IDC MarketScape for Worldwide Third-Party Risk Management](/blog/upguard-named-leader-in-idc-marketscape) UpGuard has been named a Leader in the IDC MarketScape: Worldwide Third-Party Risk Management Services 2026 Vendor Assessment. Find out why. [](/team/cassy-van-eeden) [Cassy van Eeden](#) October 18, 2026 Third-Party Risk Management #### [We Researched Four AI Evidence Analysis Tools for TPRM. Here’s What We Found.](/blog/ai-evidence-analysis-tools-for-tprm) We researched four AI evidence-parsing tools against four criteria that security teams often overlook. None nailed all four. [](/team/cassy-van-eeden) [Cassy van Eeden](#) September 29, 2026 Third-Party Risk Management #### [The Vendor Assurance Confidence Gap: Why It’s Widest With Your Most Critical Vendors](/blog/vendor-assurance-confidence-gap) Vendor assurance efforts are rising while confidence in them is falling. This gap is widest with the vendors that matter most. Here’s why. [](/team/cassy-van-eeden) [Cassy van Eeden](#) August 25, 2026 Third-Party Risk Management #### [Higher Education TPRM in 2026: New Research Maps the Vendor Visibility Gap](/blog/higher-education-tprm-2026) Explore UpGuard’s latest research into higher education third-party risk, including supplier concentration and systemic vendor exposure. [](/team/cassy-van-eeden) [Cassy van Eeden](#) August 10, 2026 Third-Party Risk Management #### [Ongoing TPRM Success: Continuous Security Monitoring with AI](/blog/continuous-security-monitoring-with-ai) Is manual work weighing down your security team and limiting your ability to scale? Learn how UpGuard and its AI features can help. [](/team/nicholas-sollitto) [Nicholas Sollitto](#) September 29, 2026 Third-Party Risk Management #### [Report Writing Solved: Generating Actionable Assessment Reports](/blog/report-writing-solved) Is manual report writing slowing down your security team? Learn how UpGuard’s AI can help. [](/team/nicholas-sollitto) [Nicholas Sollitto](#) April 2, 2025 [All posts](/blog) Experience superior visibility and a simpler approach to cyber risk management [Get a demo](/contact-sales) [Free trial](/demo)