Third-party risk in the cloud

The term third-party risk applies to all risks introduced by external parties into an ecosystem, supply chain or infrastructure. Common third parties include vendors, partners, vendors, service providers, or contractors with access to internal data, such as intellectual property, systems, processes, internal communications, and customer information .

Relationships with third parties can significantly increase the vulnerabilities an organization is exposed to. The organization may have strong security and remediation measures in place. However, if the third party does not adhere to similar standards, it may still put the organization at risk.

Hyperconnectivity through third parties can help organizations grow, but it also increases risk exposure and the likelihood of significant losses. Failure to manage third-party risks can lead to regulatory penalties, financial loss, reputational damage and litigation. The first step in mitigating this risk is to gain visibility into all entities with access to the organization’s data.

Third-party security risks in the cloud

Digital transformation is a major trend today, with many organizations expanding their cloud presence and relying more on cloud services. Whereas cloud computing enables extensive optimization and cost savings of IT environments, it also introduces complexity, which makes cloud security more difficult. For example, a technology vendor may have third-party downstream vendors, each offering different functions to support the technology.

The security paradigm is changing as the modern computing environment moves away from the isolated corporate network. When an organization moves to the cloud and relies more and more on third parties, it introduces the security risks associated with these newly added third parties. A vendor with security issues could allow attackers to break into the corporate network.

Here are some security challenges associated with third-party cloud service providers.

Larger attack surface

Every time organizations share data with third parties, their attack surface expands, putting their customers and their data at risk. A larger attack surface is more difficult to manage and increases the likelihood of missing a critical security vulnerability. Many organizations ignore third parties to avoid the time-consuming and laborious process of third-party risk assessment.

Limited visibility

Many organizations lack sufficient visibility into third-party environments, making it more difficult to mitigate security risks. It is not always obvious that a supplier or partner has a serious vulnerability. Organizations can improve visibility into third-party security risks by using scalable solutions and standardized risk assessments spanning the entire vendor ecosystem.

With deep visibility and robust data and analytics, organizations can see what security controls each third party uses to prevent breaches. Third-party risk monitoring also allows customers to notify the vendor when they identify a security breach, helping the vendor improve its defenses.

Software dependencies

A software dependency is a component that provides the functionality necessary for the main component to work. The more dependencies in an application, the more third-party tools or applications it needs to function, which increases the risk of disruption and expands the attack surface.

Package managers (i.e. Maven, npm), Git repositories (i.e. GitHub), and container image registries (i.e. Docker Hub) can introduce code dependencies. Identifying all dependencies is essential to enable a smooth migration to the cloud. For example, critical dependencies in the local data center can affect the security and performance of a cloud-hosted application.

Third-party risk management in the cloud

Third party risk assessment

Before starting a relationship with a third party, it is essential to prepare a complete risk profile. Organizations use these profiles to understand the strategic risks associated with the third party and know what data or business processes might be at risk.

Third-party risk assessment often involves the use of vendor risk questionnaires to learn about the vendor’s security practices, policies, and past failures. A risk assessment should consider the data the organization plans to entrust to the provider and any relevant data security and privacy obligations. It is also important to know whether the supplier subcontracts the work to subcontractors, introducing risks through its own third parties.

Application dependency mapping

Mapping application dependencies helps organizations accurately define a modernization effort and effectively manage a cloud migration project. It gives organizations continuous visibility into how components connect and the impact of those connections before executing cloud migration plans.

Understanding code dependencies allows organizations to work with more confidence, knowing that all changes are correct and safe. Once organizations have fully migrated to the cloud, application dependency insights allow them to continuously monitor application structure and troubleshoot changes.

Plan third-party incident response

Ideally, organizations should have an incident response process that can help them respond to third-party incidents. This requires analyzing the scope of cybersecurity threats to choose the most relevant risks to the organization and creating formalized procedures to mitigate them.

Organizations can ensure rapid detection of cybersecurity incidents by using a dedicated solution to set up alerts and notifications for suspicious actions and events related to third parties. Organizations should designate responsible personnel to be notified when third-party security incidents occur, including their names and contact details in the organization’s cybersecurity policy.

Continuous monitoring of user activity

Many IT regulations, standards, and laws require organizations to continuously monitor user activity. Monitoring third party activity within the network allows organizations to see what they are doing with critical assets and when the activity is occurring.

Monitoring solutions can help monitor and record user sessions in a format suitable for further auditing of these activities. Organizations can use reports based on the results of monitoring processes to pass external audits, assess overall security during internal audits, and investigate cybersecurity incidents.


In this article, I explained the basics of third-party security and showed how organizations operating in the cloud can plan to reduce their third-party risk:

Third party risk assessment—Performing a comprehensive risk assessment of all third-party workloads and cloud infrastructure.
Application dependency mapping— Automatically identify dependencies running in cloud resources and their security issues.
Continuous monitoring of user activity—Monitor third-party user activity, detect and respond to anomalous activity.
Plan third-party incident response— The organization must have a formal plan in place that can provide a quick and effective response to third-party security incidents.

Hope this helps you as you improve the third-party security posture of your cloud environments.

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