9 Ways to Mitigate the Risk of Third-Party Data Breaches

9 Ways to Mitigate the Risk of Third-Party Data Breaches 
7 minute read

A third-party attack occurs when data stored on your systems are compromised or breached through the access a threat actor acquires from your third-party business contacts. These data breaches are concerning to businesses of all sizes because it can be difficult to vet potential vendors' or third-party organizations' security before giving these business contacts access to your systems in order to streamline your company's services. 

A 2019 survey conducted by eSentire found that 44% of all firms that participated said they had experienced a significant data breach caused by a third-party vendor. 

Given this alarming reality, organizations must understand the methods third-party data breaches take, and how to mitigate the risk.

How Do Data Breaches Happen?

A data breach occurs when someone who has not been given consent from an organization gains access to confidential records or system data. The intent may be to use this information in a malicious way or to control some part of the organization's systems. 

How does a data breach occur?

  • An Accidental Insider

An employee of an organization may breach the company's security by unintentionally accessing information they should not have access to.

  • A Malicious Insider

An organization's security can be breached by an employee who intentionally seeks out and uses information from a company's database maliciously.

  • Lost or Stolen Devices

A breach can occur if a device that could be accessed containing private information is lost or stolen.

  • Malicious Outside Criminals

When a malicious outside criminal intentionally uses their resources to create a breach in an organization's security, a serious type of breach has occurred.

Malicious Methods Used to Breach Data

Identifying a cyberattack, no matter its source, requires understanding the popular methods hackers or other threat actors use. Three of the most common are:

  • Phishing

Phishing is the term used for an attempt to gain digital access or information from a person or organization by means of deception. A criminal may pretend to be someone associated with the company and attempt to gain access to sensitive data or may demand the employee of the company with access to the data to misuse it. 

  • Brute Force Attacks 

Brute force attacks are aggressive programs that directly attack the company's security systems. They are engineered to try every password possibility and can take over computers or other employee devices.

  • Malware 

Malware can infiltrate an organization's data and steal, copy, and relay private or sensitive information to the threat actor. 

Important Steps to Mitigate the Risk of Third-Party Data Breaches

The following steps provide direction for how you work with your third-party vendors and how breach response services will work with you to protect your data.

1. Evaluate Your Potential Vendors Prior to Bringing Them on Board

Competitive vendors know that their security measures can make or break their opportunity to work with organizations that take security seriously. Using a preestablished breach intelligence service can help you quickly identify the risk level you are accepting when onboarding new third-party associates.

ZeroFox's third-party risk intelligence can identify the risks that your vendor network presents to your organization's data, and you can choose to share your security concerns with the potential vendor. This can allow for a collaborative effort to increase digital security.

Once you feel satisfied with the precautions a third-party vendor will take to protect your information from being breached, you can move forward.

2. Integrate risk mitigation strategies into your contractual agreements

Including responsibility for breach intelligence in your contracts with your vendors offers a reasonable assurance that your breach protection measures will be respected.

Your vendors will have increased legal pressure to prioritize protecting access to your data through their systems. Consider including a requirement for your third-party vendors to evaluate and communicate their breach risk factors regularly.

If a vendor chooses to slack off in their cybersecurity measures, use your contract as leverage to end your business relationship with them or encourage them to improve their security.

3. Maintain a list of vendors currently being utilized by your organization

Keep an organized inventory of all of your third-party vendors that not only lists their names but also the level of access they have to your sensitive information and their security rating.

ZeroFox can help protect both your and your third-party vendor's brands by monitoring breaches so you can quickly respond.

Particularly if you work with a large organization, creating a master list of all third-party associates can assist in finding the source of a breach if one does occur. If you can quickly track down the source of a breach, you can minimize damage and take corrective measures.

4. Regularly check vendors for potential security vulnerabilities

As cyber-attacks become more prevalent and complex, regularly check in with your third-party associates to see what advances they are making to their security to keep up with the evolving threat.

Use assessment standards that take into account the vendor's access to your data and previous breach protocols. Communicate your expectations to your vendors, so they can add security measures in response to your concerns.

As new threats become apparent, stay aware of how your vendors are prepared to handle different types of breach attacks. ZeroFox can help you understand what steps are prudent and provide the resources needed to assess your third-party associate's vulnerabilities.

5. Work together with your vendors

Thinking of your third-party vendors as part of your breach mitigation team, and not as just a threat to your organization's security, can help you work collaboratively to find solutions that work.

Using a platform that is professional and organized to request remediation or conduct risk assessment surveys can help navigate the important conversations you need to have in a way that feels respectful of both your and your vendor's organizations.

Data breaches that affect your organization can also affect your third-party vendors, so keep the lines of communication open.

6. Discuss risks posed by third-party entities

Communicating respectfully and often with third-party entities about the security threats your company has identified allows for an engaged response.

When security is part of an organizational leader's narrative, and not just regulated to one person or team, it allows for a more comprehensive understanding of what breaches could occur, and how every person who has contact with sensitive data can help mitigate the risk or effect of a breach.

If a vendor can sense from your company leaders how important security measures are to your organization, they may be inclined to work harder to protect your data from a breach.

7. Terminate relationships with unreliable vendors.

If a vendor refuses to meet your standards, or simply does not have the infrastructure to accommodate your reasonable risk mitigation initiatives, you may need to cut ties and find a new vendor.

It will require additional planning to be prepared to terminate business relationships with unreliable vendors, but taking these breach protection measures seriously creates a more secure and reliable environment for your business to grow.

Off-boarding vendors is easier when you have access to other potential vendors with better security, so leverage third-party risk through ZeroFox's intelligence systems. 

8. Evaluate potential risks associated with subcontractors or other downstream entities.

Just as your third-party associates introduce a level of risk, the subcontractors that work with your vendors present further potential risks.

If your data is going to be shared with these fourth-party entities, require that your vendors inform you who has access to your data and complete risk assessment surveys on these companies as well.

When deciding to work with a vendor, choose a vendor that works with fourth-party entities that use security systems you trust.

9. Adhere to the concept of providing minimal access privileges to system users.

If a third-party company does not need access to your sensitive information, completely avoid the risk of data breaches through their systems by not allowing them access.

 Even if a third party does need some higher security access, evaluate exactly how much information they need, and protect your data by means of constant monitoring.

ZeroFox can help by providing you with expert analyst services and educating your organization on breach response.

Damage a Data Breach Can Cause

Data breaches can cause irreparable damage to a business's reputation, and if important data is stolen or misused, companies can lose significant resources. 

Even if the breach only results in a temporarily non-functional website, an organization will lose out on customers because they may choose to go with a different brand simply for convenience. If a data breach interferes with a company's social media, or presents untrue information, a website may lose credibility with potential customers, resulting in a loss of revenue.

Private information breached through an organization's servers can leave a company open to lawsuits and further loss of credibility.

ZeroFox Helps Reduce the Risk of Data Breaches Caused by Third-Party Entities

ZeroFox provides data breach risk mitigation solutions, such as using our AI-powered platform to identify and take action against malicious threats. Because our system offers complete monitoring of millions of sources across the web, data breach risks can be cut off before they reach your important data.

After all measures to mitigate your cybersecurity risks have been met, if a breach does occur ZeroFox can contain and take down active threats while keeping your business functioning.

Obtain an initial assessment of your risk of experiencing a data breach and Request a Demo to learn how ZeroFox’s suite of tools can help you expose, disrupt, and respond to all threats outside your perimeter.

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