Could Your Vendors Be Your Biggest Cybersecurity Threat?

Businesses depend on vendors to keep operations running smoothly, but if those vendors aren’t following proper cybersecurity guidelines, your business could be exposed. Our cybersecurity partner, OrbitalFire, offers this look into why third-party vendors could be your biggest cyber threat.

Third-Party Risk: Why This Could Be Your Biggest Cybersecurity Threat

In today’s hyperconnected world, no smaller business operates alone. You rely on vendors for payroll, IT support, cloud services, payment processing, and maybe even that new AI-driven widget your team can’t live without. But here’s the catch: every third-party you invite into your ecosystem can also invite risk. This is what we call Third-Party Risk. And it’s one of the fastest-growing threats to smaller businesses today.

What Is Third-Party Risk?

Third-party risk refers to the possibility that your vendors, contractors, or partners may expose your data, networks, or operations to harm. Sometimes it’s accidental: an employee at your payroll company clicks on a phishing email. Sometimes it’s malicious: an IT vendor’s remote access is hijacked. Either way, it’s your business, your customers, and your reputation on the line.

As Reg Harnish, CEO of OrbitalFire, discusses in a recent presentation, “Good Fences Make Good Neighbors: Managing Third-Party Risk,” most smaller businesses don’t have sprawling global supply chains. But they do have a handful of vendors that touch critical systems, and that’s more than enough to create real exposure.

A Wake-Up Call: Target’s Breach

Think Third-Party Risk is only a “big company” problem? Think again. The 2014 Target breach, one of the most infamous cyber incidents in history, didn’t start with Target’s systems. It started with a small HVAC vendor whose network access was compromised. That single weak link gave attackers the keys to Target’s payment systems, affecting 40 million credit cards.

The lesson? You may not be Target, but you are somebody’s vendor. And if you can be used as a stepping stone to something bigger, or if you simply hold valuable data yourself, you’re fair game.

Why Smaller Businesses Struggle

Here’s the uncomfortable truth: most smaller businesses don’t know which third parties pose the greatest risk. In our poll, the majority of attendees admitted they couldn’t identify which vendors introduced the most risk to their organization. That lack of visibility is exactly what attackers count on.

The Third-Party Risk Management Process (Without the Jargon)

Managing Third-Party Risk isn’t about building a fortress around your business; it’s about building smarter fences. Here’s how to start:

1. Inventory Your Vendors
   Create a list of every third-party entity with access to your systems, networks, or data. This includes IT providers, cloud apps, contractors, and even the cleaning company if they have a keycard.
2. Classify the Risk
   Not all vendors are equal. A food delivery app isn’t as risky as your payroll processor. Rank vendors by how much access they have and what kind of damage they could cause if breached.
3. Set Expectations
   Bake security into your vendor contracts. Require basics like multi-factor authentication, incident reporting, and proof of compliance where relevant.
4. Monitor and Reassess
   Risks change over time. That shiny new cloud app you installed last year may not be so shiny after its third data breach. Review your vendor list at least annually.

Risk Treatment: What to Do When You Find a Problem

Here’s where smaller businesses often get stuck: what do you do once you’ve identified a risky vendor? At OrbitalFire, we teach four classic options:

• Avoid the risk – Don’t use the vendor.
• Transfer the risk – Insurance or contractual liability.
• Mitigate the risk – Add controls (like restricting access).
• Accept the risk – If it’s low-impact and unavoidable, you may decide it’s worth it.

The key is to make that decision consciously, not by accident.

The OrbitalFire Perspective

At OrbitalFire, we believe Third-Party Risk management doesn’t have to be overwhelming. We help smaller businesses cut through the complexity with straightforward processes: identifying your riskiest vendors, putting the right fences in place, and making sure those fences stay strong over time. Because in cybersecurity, as in life, good fences really do make good neighbors.

The Bottom Line

Third parties extend your capabilities, but they also extend your attack surface. Managing Third-Party Risk isn’t just an enterprise problem. It’s a smaller business survival skill. Inventory, classify, set expectations, monitor, and mitigate risks before they lead to a headline-making breach.

Because at the end of the day, your security is only as strong as the weakest vendor in your chain.

For more, watch our recent presentation: Good Fences Make Good Neighbors: Managing Third-Party Risk

Ready to protect your smaller business against Third-Party Risk?  We’re Here for You.

GTM’s Cybersecurity Practices

Security is integral to our operations. It’s at the core of what we do with multiple layers of protection embedded into our products, processes, and infrastructure.

Our state-of-the-art security measures are designed to safeguard your data from unauthorized access and cyber threats. We employ a robust combination of physical, administrative, and technical controls, including advanced encryption technologies, continuous network monitoring, and strict access controls, ensuring your data is protected around the clock.

GTM undergoes annual security assessments conducted by the New York State Department of Financial Services and adheres to the National Institute of Standards and Technology (NIST) cybersecurity standards. GTM also submits to several third-party audits, including SOC 1 audits, Nacha audits, and financial statement audits.

Cyber and Data Breach Liability Insurance

As an additional method of security, cyber and data breach liability insurance is available in case of a cyberattack or data breach. A cyber liability and data breach insurance policy can help if your business’s computers are infected with a virus that exposes private or sensitive information, your business is sued for losing customers’ sensitive data, or your business incurs public relations costs to protect its reputation after a data breach.

If you are interested in cyber and data breach insurance, the GTM Insurance Agency can discuss your options. Contact them for a free quote or more information.