17th September, 2023
By Modupe Yahaya
As of this current year, approximately 54% of all companies utilise third-party support teams to engage with their customers. The business world has become so interconnected that organisations frequently rely on third-party partnerships to manage various aspects of their operations efficiently. This reliance, however, comes with risks, as external parties can introduce potential vulnerabilities into an organisation’s cybersecurity.
A third party refers to any external entity that an organisation collaborates with, including suppliers, manufacturers, service providers, business partners, affiliates, distributors, resellers, and agents. These entities can be upstream or downstream and may even involve non-contractual arrangements.
This article delves deeper into the application of the CIA triad (Confidentiality, Integrity, and Availability) to third-party risks. By addressing third-party risk proactively, companies can strengthen their cybersecurity programs and protect themselves from potential threats.
UNDERSTANDING THIRD-PARTY RISK
Third-party risk refers to potential risks introduced to an organisation by external parties in its ecosystem or supply chain, such as vendors, suppliers, partners, contractors, or service providers (e.g. software providers). The risk arises because external entities often have access to internal company or customer data, systems, processes, or privileged information. Even if an organisation has robust cybersecurity measures, third-party relationships can still create vulnerabilities as these external parties might not uphold the same security standards.
Third-party vendors can gain access to various forms of sensitive information, such as intellectual property, sensitive data, personally identifiable information (PII), and protected health information (PHI). Safeguarding this data is of utmost importance for companies, as it not only protects the interests of their users but also shields them from potential regulatory penalties.
DANGERS THIRD-PARTY RISK POSES TO A COMPANY’S CYBERSECURITY
In 2020, TechBeacon conducted a survey that revealed 80% of surveyed organisations experienced a data breach originating from a third party. These statistics have only increased since then. These dangers have severe consequences and they’ve been highlighted below:
- Failure to manage these risks can leave organisations exposed to regulatory action, litigation, reputational damage and ultimately hinder their ability to attract new customers or retain existing ones.
- Threat actors can also exploit data obtained from third-party breaches for various malicious activities, such as identity theft, fraud, account abuse, and external account takeover attacks.
- Third parties may be targeted while hosting a company’s data, or attackers may compromise the third party to access the organisation’s IT systems.
- Third-party risk can result in significant financial costs. The global average cost of a data breach has reached a record high of $4.45 million in 2023, according to the Cost of a Data Breach Report by IBM and the Ponemon Institute. For instance, third-party vendors can expose organisations to compliance risk if they violate government laws, industry regulations, or internal processes, leading to hefty monetary penalties.
- Third parties are often targeted by cyber attackers, who silently infect their systems and devices to use them as platforms for launching attacks on higher-value targets.
Implementing a defence-in-depth approach to restrict third parties’ access to an organisation’s network is crucial to prevent adversaries from gaining privilege escalation.
As stated above, threat actors often use compromised credentials and data sourced from third-party breaches to access other victims’ environments. Therefore, due diligence and ongoing monitoring of vulnerabilities throughout the vendor lifecycle can help reduce the risk.
Companies must thoroughly vet all third-party vendors before granting them access to their systems to ensure proper security protocols are in place. Continuously assessing new and existing third parties in accordance with the company’s cyber risk is essential.
The danger of third-party risk extends beyond cybersecurity; it also encompasses operational risk, regulatory compliance risk, reputational risk, and financial risk. These risks can overlap, as a cybersecurity breach leading to compromised customer data would pose various other threats to the company.
The Application and Importance of Using the CIA Triad to Combat Third-Party Risk
The CIA triad is a fundamental cybersecurity model consisting of confidentiality, integrity, and availability, which plays a critical role in protecting data and combating third-party risks. By implementing the triad, organisations can ensure their data is secure against cyber threats. Its application to third-party risk involves the following:
- Confidentiality: this area is about restricting data access to authorised personnel only. For example, in a healthcare company, they should implement access controls and encryption protocols to maintain the confidentiality of patient information and protect against potential data breaches. Similarly, a law firm should protect client-attorney privilege and ensure that confidential legal documents and case details are only accessible to authorised lawyers and staff. The confidentiality clause demands that organisations assess third-party vendors’ ability to maintain data confidentiality and comply with strict access controls.
- Integrity: This model sets the standard for data integrity. It states that data must remain accurate, unaltered, and reliable. Third-party vendors must demonstrate their commitment to data integrity, especially when handling sensitive information. To meet the standard of data integrity, companies may Implement integrity checks and data validation measures such as secure systems and audit trails to ensure that data remains accurate and unaltered.
- Availability: The standard for this model is that an organisation guarantees that essential servers and systems remain accessible during disruptions. They have to ensure that they have a solid Business Continuity and Disaster Recovery (BCDR) plan to shield themselves from power outages or natural disasters which could compromise availability. For instance, A severe hurricane or flood can prevent employees from accessing workstations and official servers, disrupting business-critical services. Also, third-party vendors should have robust backup and recovery procedures to minimise disruptions.
The CIA Triad plays a critical role in assessing and enhancing an organisation’s security posture when engaging with third parties. It serves as a benchmark to measure the company’s cybersecurity standing and provides a foundation for security strategies and policies.
As organisations continue to collaborate with external parties to streamline their operations, the importance of Third-Party Risk Management cannot be overstated. The CIA Triad offers a powerful framework to address these risks effectively. By prioritising confidentiality, integrity, and availability in their interactions with third-party vendors, companies can bolster their cybersecurity defences and safeguard against potential threats. These measures will protect organisations from the dire consequences of data breaches and associated risks, ensuring business continuity and success.
In conclusion, the CIA triad’s importance lies in safeguarding data by preserving confidentiality, ensuring integrity, and maintaining availability. Implementing these principles helps organisations combat third-party risks and fortify their cybersecurity measures effectively. By adhering to the CIA triad, companies can protect themselves from cyber threats and build a robust security foundation for the future