Data breaches are a growing problem; since 2005, over 10 billion consumer records have been compromised. For large enterprises, each data breach can result in lost revenue of £1.3m.
One of the main culprits of data breaches are third-parties that organizations engage to perform key functions within the business. It’s the weaknesses within their infrastructure, and the services they provide, that can often leave you vulnerable. SureCloud’s third-party risk management software is the secret.
During the last 12 years, we’ve helped over 400 customers, 10% of which are in the FTSE 100, with their third-party risk management programs. We’ve discovered that organizations that implement a comprehensive ‘Third-party Risk Management Program’, which follows the following 7 best-practice models, experience the most success and tame the monstrous problem of third-party risk:
✔ Maintain a comprehensive list of all third parties, large and small.
✔ Complete a risk register that is regularly updated.
✔ Always take a risk-based approach.
✔ Maintain disciplined governance.
✔ Select integration into inertial GRC.
✔ Be proactive with continual assessment and monitoring.
✔ Leverage the power of technology.
Once upon a time, hearing about a data breach would have been shocking, but unfortunately, in today’s world, they’re commonplace in our headlines. Privacy Rights Clearinghouse is a not-for-profit organization that reports on data breaches impacting consumers. Back in 2005, when it started maintaining its chronology of information, 136 breaches, affecting 55,101,241 records were recorded; last year, this exploded to 7,934 breaches that have been made public, affecting 10,082,217,317 records. Third-party risk management software is becoming increasingly more important.
Besides the negative press attention, data breaches can have a huge impact on your organization:
• 40% of organizations experiencing a breach lose customers.
• 29% lose revenue.
• 23% lose business opportunities.
According to PwC, more than a quarter of businesses (28%) don’t know how many breaches they’ve experienced, and a third have no idea how they happened. It’s worrying, yet understandable when you consider how heavily reliant we’re becoming on engaging third-parties to perform key functions within our businesses; research suggests that third-parties now represent 60% of revenue.
The problem lies in vulnerabilities within a third-party’s infrastructure and the services they provide. And the risks presented to both the organization and the end customer only mount with each additional party involved. The chains involved industries can stretch beyond the first, second, and third (customer, the organization, immediate suppliers) into fourth and fifth (suppliers of the suppliers of suppliers). It’s no wonder that this mind-bending complexity becomes so easy for risks to permeate. Furthermore, with consumers’ trust eroding more with every breach, it’s forcing governments to tighten their regulatory control in making organizations more accountable, so ensuring you have third-party risk management software in place is imperative.