In today's hyper-connected business environment, responding to cybersecurity incidents is more challenging than ever, especially when the breach originates from third-party vendors or suppliers. As businesses increasingly rely on external partners, third-party incidents are on the rise, leading to more severe financial and operational consequences. The FCC recently fined AT&T $13 million following an investigation into a data breach at a cloud vendor in January 2023, which affected 8.9 million AT&T wireless customers.
According to IBM’s research, the average data breach cost has surged 15% over the past three years. This makes it crucial for organizations to develop a robust third-party incident response plan. By proactively preparing to handle vendor-related breaches, companies can minimize damage, streamline their forensic investigations, and ensure timely, effective remediation.
Third-party incident response is the process of identifying, investigating, and reacting to data breaches, natural disasters, or other external adverse events that affect an organization via its vendors or other business partners. The goal is to maintain operations—or at least quickly recover—when business disruptions occur in a vendor ecosystem or supply chain. A well-prepared third-party incident response plan ensures operational resilience.
If a cybersecurity incident occurred in your vendor ecosystem, would your organization be able to assess the impact and activate its response plan quickly? Time is critical in incident response. A defined plan can shorten the time to identify and address potential vendor issues. An effective third-party incident response plan should include:
9 Steps to a Third-Party Incident Response Plan
When one of your critical vendors is breached, being ready with a prescriptive incident response plan is essential to preventing your company from becoming the next victim.
The rise in third-party cyberattacks significantly increases the chances of a breach at partner organizations. Risk managers must assess how well they can protect their organization in such cases. Consider the following:
A solid response plan is essential to protect your organization when a critical vendor is breached. Follow these nine steps to build an effective third-party incident response plan:
Identify and assign responsibilities to key internal and external stakeholders across IT, security, privacy, risk, legal, and communications. Use tabletop exercises to simulate incidents, test the efficacy of your response plan, and ensure your team is ready with the necessary capabilities and resources.
Managing vendors with spreadsheets is error-prone and does not scale. Manage third parties with a centralized platform for consistent surveys, responses, analysis, and reporting.
Provide vendors with a simple way to update you on breaches or security incidents. Include communication protocols, such as information gathering steps and escalation paths, and enforce contract measures, such as incident response service level agreements (SLAs).
Leverage solutions that facilitate proactive incident response. Consider developing and sharing a playbook for pre- and post-breach procedures to provide better visibility to all parties.
Each third party represents distinct levels of risk to an organization. Conducting profiling and tiering on third parties helps you to understand the potential impact of a vendor breach based on factors such as their industry, location, or criticality of their solution or service to your business.
Many third-party risk surveys focus primarily on a vendor's defenses, but in today’s environment, teams must assume incidents are inevitable. Organizations should also evaluate a vendor’s ability to respond to incidents, including their policies for handling, investigating, and recovering from breaches.
This assessment should include escalation and communication procedures, notification requirements, logging policies, forensic data collection, analysis capabilities (internal or external), and regular testing to ensure effectiveness.
Relying on a spreadsheet-driven approach to identify gaps in incident response capabilities and/or incident alerts is inefficient and leaves organizations with poor protection. Automate the collection and analysis of third-party event information to ensure continuous, up-to-date risk visibility.
A risk for one vendor may not be a risk for another. Scale or weight risks based on the vendor’s role and data interaction to keep your team focused on the most critical threats.
Provide your third parties with clear guidance on how to improve their incident response plans and then track, score, and manage residual risk. This helps partners become more proactive and accelerates risk identification and mitigation controls.
Don’t rely solely on vendors to report incidents. Continuously monitor for new and emerging cyber threats across your vendor ecosystem. Instead of trying to stay on top of security news and community postings manually, look for threat intelligence providers that can automate and scale the monitoring process for you.
Review Basic Security Controls
Assess vendors' access to your infrastructure and data. Implement tools like behavioral analysis, micro-segmentation, and privileged user management.
Conduct Post-Incident Follow-Up
Analyze incidents to identify lessons learned and prevent future mistakes. Implement corrective actions and develop practice cases for future exercises.
Benchmark Your Incident Response Plan with Industry Standards
Several industry standards and cybersecurity frameworks provide additional guidance on third-party incident response. Including:
For a detailed look at the NIST guidelines, download our NIST Third-Party Incident Response Checklist.
Incorporating incident response requirements into a programmatic third-party risk management plan helps organizations maintain visibility into all risks and react more quickly when incidents occur. The benefits of this approach include:
By preparing in advance, establishing communication channels, and having a comprehensive incident response plan, your organization will be better equipped to handle third-party data breaches. Proactive risk management protects your company, partners, and customers from the broad impact of cybersecurity threats.
Many organizations struggle with delays in receiving breach information from their vendors. Manual notification processes slow down risk assessment and remediation. To speed up incident response, use automated TPRM platforms and managed services.
The Prevalent Third-Party Incident Response Service helps organizations manage vendors centrally, assess them using a contextual questionnaire, score risks flexibly, and offer prescriptive remediation guidance. Available as a managed service or self-service platform, Prevalent automates key tasks, helping you quickly identify and mitigate vendor vulnerabilities.
The Prevalent™ Third-Party Incident Response Service enables organizations to:
Learn how you can streamline and enhance your incident response strategy. Request a demo and strategy call today.
Third-Party Risk Management (TPRM) has advanced from being an annual checklist exercise to a critical daily...
10/07/2024
Learn how to leverage vendor risk assessment questionnaires for stronger third-party risk management, including a customizable...
09/18/2024
Third-party risk assessments not only enable your organization to proactively detect and reduce risks, but also...
09/16/2024