How cyberattacks on suppliers could impact your business

Data security risks are among the most prominent risks any modern business faces. While security remains a top concern for many companies, they often consider only how a direct attack may impair operations and how to address disaster recovery. But the reality is that cyberattacks can impact your business in many ways. The Global Risks Report 2020 published by the World Economic Forum illustrates this in their report by pointing out that “more and more firms operate in global and digital service ecosystems that not only expose them to their own cyber and technological weaknesses, but also to those of other participants – including customers, suppliers, and managed system providers.”

With many people now paying attention to supply chain issues, it’s crucial to understand how a cyberattack on your suppliers may impact your business. Many cyberattacks can originate within the supply chain since cybercriminals can exploit known and trusted relationships. Unfortunately, due to the interconnectedness of digital relationships, supply chain vulnerabilities and attacks can have severe consequences that require disaster recovery. Risks in the supply chain can include:

Third-Party Suppliers: Suppliers have access to secure information and systems, which means your security is only as good as theirs. If a supplier is vulnerable, you could suffer the same ramifications as a direct attack. These attacks on suppliers can result in intellectual property breaches and sensitive customer data leaks. You have the same negative outcomes as a direct attack in either instance.
Compromised Software or Hardware: Suppliers may fall victim to counterfeit software or hardware embedded with viruses or malware. When outsourcing any supply chain operation, you must acknowledge the risk that compromised software or hardware may present.
Supplier Employees: Almost 90% of all cyberattacks are caused by human error or behavior. And in most instances, it is attributed to employees who either deliberately sabotage the company or inadvertently allow cybercriminals to exploit a security vulnerability. Regarding employees, you are once again at the mercy of your suppliers. No matter how you may train your employees to be vigilant, supplier employees can still present a security risk.

These examples demonstrate how a cyberattack on a supplier could serve as an entry point for a direct attack on your company. But even in the best of circumstances, when you avoid a direct attack or loss of data, an attack on a supplier can still hurt your business. Their attack could limit the ability of the supplier to continue providing the goods or services you require, which may, in turn, limit your ability to serve customers. For these reasons, thorough security measures consider all points in the supply chain.

Best practices to enhance the security across your business’s supply chain may include:

Ensuring everyone is on the same page with anticipated goods and services is vital since a solid process will raise red flags when something unanticipated arrives. Communicate directly with vendors frequently. You may also log and track shipments with automated notifications for the sender and receiver.
Physically seal the shipments using locks and tamper-proof seals to avoid compromised products, especially when shipping hardware.
Use accredited or certified suppliers. They understand the importance of prioritizing security, and those with proper security measures will not worry about sharing this information with trusted partners. It is also not uncommon to regularly audit the security practices of your suppliers.
Depending on the industry, you may require background checks on employees. At the very least, you should understand what background checks the supplier uses before hiring.
Perform security strategy assessments that incorporate local laws.
Stress test the systems you use to share data with suppliers. This process can identify security vulnerabilities that need to be addressed.
Authenticate all data transmissions and identify requestors, which is a best practice that should extend beyond your supply chain to keep your company and its data secure.
Train internal employees to identify changes or inconsistencies from the vendor that may indicate a problem.
Audit any open source or vendor source code and restrict third-part access and permissions.
Implement technologies, such as network-level scanning, behavioral analysis, and intrusion detection to identify potential breaches.
Develop a disaster recovery plan for security breaches to mitigate their impact.

Supply chain security must be a high priority for all orgganizations, now more than ever before. Breaches that originate within the supply chain can still damage your company’s reputation and disrupt operations. Managed IT security solutions can be a strong ally when identifying risks within your supply chain or disaster recovery services. To learn more about these services, contact Sagacent Technologies today.

Sagacent Technologies offers technology management and support, including proactive/preventative maintenance, onsite and offsite data back-ups, network and security audits, mobility solutions, disaster planning, and emergency business resumption services. The company serves clients of 10 to 150 employees within the Silicon Valley region.