Is the Supply Chain the Next Big Cyberattack Target?

THE RESILIENT ENTERPRISE | THE RISKMETHODS BLOG

Cyberattacks are consistently among the top risks that most concern global executives. Yet there are ways to defend your organization, and your supply chain, from cybercriminals.

Cyber incidents are among the top three concerns for businesses, according to the Allianz Risk Barometer 2022. And hackers exploit the interconnectedness of enterprises and their suppliers to gain access to IT-systems. How can you protect your operations and your supply chains from cyberattacks? Read on to find out. 

1. How cyberattacks affect cybersecurity

Cybersecurity serves to protect digital networks from attacks aimed at infiltrating IT-systems. Such cyber incidents, driven by advanced software and often powered by bots, are increasingly aggressive and complex. As hackers attack with ever-evolving forms of entry, cybersecurity must stay one step ahead of the growing cyber risk. Yet according to a recent report by online protection provider McAfee, only about half of organizations have plans for preventing or responding to cyber incidents. 

 

Threats to your enterprise, such as digital strikes and intrusion, are joined by user negligence or error. Phishing (pretending to be a legitimate source), baiting (using false promise of reward), pretexting (using lies to get sensitive information) are just three types of cyberattacks that fool recipients into opening links or providing personal data.  

2. Are hackers a threat to the global supply chain?

Hackers, also called threat actors, commonly seek access to enterprise systems through the weakest link in the supply chain. These tend to be businesses in the sub-tiers, who may not have the knowledge or resources for robust cybersecurity. Suppliers often have access to their customers’ networks, for example, via supplier portals. They then unknowingly provide the point of entry for cybercriminals. 

 

According to a 2021 report by the EU Agency for Cybersecurity, ENISA, some 62% of the attacks on customers took advantage of their trust in their supplier. If one of your business partners is targeted in a supply chain cyberattack, your enterprise could be the main target. Increasingly, ransomware attacks hit supply chains, to improve threat actors’ chances of getting into the infrastructures of large companies. Attackers steal confidential data or code, then demand large sums of money to keep it unpublished. 

3. What is cyber supply chain risk management?

In short, cyber supply chain risk management begins with identifying where risk exists among suppliers and in the supply chain. Robust cybersecurity of your own IT-system is no longer enough. For greater supply chain security, you also must determine whether your suppliers have sufficient  technology, processes, and programs in place.  

 

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  • Secure your own infrastructure through technology (such firewalls) and cybersecurity training (secure practices and passwords, for example) 
  • Assess cyber risk of partners during sourcing or evaluation. Conduct audits or verify cybersecurity systems and certificates. 
  • Continually monitor your supply base for cyber incidents. 
  • Understand vulnerabilities by gaining visibility across the sub-tiers. Assess the impact of cyber threats. 

Once you have established a process for identifying risk, you’ll need to prepare a set of actions to enable quick response to cyber incidents. Then if a key supplier has suffered a data breach, for example, and confidential information is stolen, you can react faster with appropriate actions. 

4. Cyber risk assessment in supply chains

Cyber risk assessment allows you to estimate the security of your business partners’ IT-systems and processes. It should be anchored in your supplier evaluations and third-party risk management. Cyber risk assessments should extend through your entire supplier base, including software vendors or IT-service providers. A quantitative approach can be divided into three parts: 

 

  1. Susceptibility: Where are vulnerabilities? What are attackers looking for (confidential data, or user information?) 
  2. Capability: How does the company defend itself (tools, techniques, or resources)? 
  3. Accessibility: What is the attack surface? In other words, where can threat actors gain access? 

 

Such assessments help you understand the cybersecurity performance of your suppliers in greater depth. Using a cybersecurity risk assessment checklist can help you evaluate potential vendors and suppliers. You can also employ a cybersecurity matrix. Grade the likelihood of attack against the impact to your organization. This helps you to set the right priorities.  

 

5. Cyber risk management in supply chains

Assessment of suppliers is one part of cyber risk management in the supply chain. It is critical to understand risk in your entire supply base because cyber incidents in your supply chain can have financial consequences for your enterprise. Under the General Data Protection Regulation (GDPR), when a supplier who holds sensitive data suffers a data breach, your company could also be subject to fines. 

 

To defend against threats, use proactive mitigation action with up-front measures. Require specific security measures or standards in supplier contracts, for example. And, to keep pace with threats, you need to follow cybersecurity assessments with continuous real-time monitoring 

6. How to protect your supply chain against cyberattacks with The riskmethods Solution

The riskmethods Solution™ helps you identify, assess, and mitigate cybersecurity risk in your supply chain. Our AI-driven riskmethods Risk IntelligenceTM monitors millions of datapoints daily, from sources including global news services, customers, suppliers, and transport routes. You receive instant risk evaluation of objects in your supply network, and early warnings of cyber risk events.  

Warnings are based on real-time media monitoring for the most recent cyberattacks. At the same time, you receive security ratings from leading risk data partners that translate complex cybersecurity issues into a business-relevant context. Working with partners such as BitSight, we provide you extended access to conduct non-intrusive monitoring for cyber incidents including botnet infections, malware servers, spam propagation, and more. 

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Managing cyber risk in your supply chain helps you avoid negative consequences of a data breach or cyberattack, and provides real benefits: 

  • Stay compliant and avoid fines: Cybersecurity ratings are integrated into risk scorecards, so you adhere to cybersecurity regulations. 
  • Ensure business continuity: The riskmethods Solution empowers you to identify cyber risk in real time and understand its impact on your business. 
  • Protect your reputation: With supplier cyber risk assessment and continuous monitoring as part of your holistic supply chain risk management, you earn the trust of investors, partners, and customers.

Want to learn more about managing cyber risk in your supply chain?

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