By Tom Egglestone, Global Head of Claims at Resilience.
In today’s highly digital and connected world, third-party breaches have become an increasingly common occurrence. These breaches occur when hackers access sensitive data through a vendor or supplier rather than directly targeting the primary organisation. As companies become more reliant on third-party vendors for key aspects of their operations, the risk of third-party breaches continues to increase.
Tight security measures have become paramount in preventing hackers and cyber-attacks targeting organisations. Advanced encryption algorithms are deployed to safeguard sensitive data and transactions, ensuring secure communication between platforms and their users. Multi-factor authentication protocols, such as biometric identification and token-based systems, add an additional layer of protection against unauthorized access. Continuous monitoring and anomaly detection systems are implemented to swiftly identify any suspicious activities, enabling prompt response and mitigation of potential threats.
Regular security audits and penetration testing are conducted to identify vulnerabilities and reinforce the resilience of trading technologies. Additionally, comprehensive employee training programs raise awareness about cybersecurity best practices, fostering a culture of vigilance and ensuring that individuals within the trading ecosystem remain proactive in safeguarding against cyber threats.
Implementing value-chain cyber hygiene practices
With organisations increasingly relying on technology, the use of third-party vendors has become very common, especially with the growing popularity of cloud computing and software-as-a-service (SaaS) solutions. These vendors provide a range of services, such as data storage, IT infrastructure, and application development. However, as more organisations outsource critical functions to third parties, the risk of data breaches occurring through one of these vendors increases tremendously.
To prevent third-party breaches, it is essential to establish value-chain cyber hygiene practices. This process involves identifying and assessing the risks associated with each third-party vendor the primary organisation uses and verifying that their security measures are adequate. Establishing vendor management protocols that include proper due diligence, ongoing monitoring, and incident response planning is vital.
Implementing value-chain cyber hygiene practices starts with identifying the risks and potential vulnerabilities associated with each third-party vendor. Organisations must take the time to evaluate the security protocols in place at each vendor they utilise and verify that these protocols meet their required standards. This process includes conducting a thorough review of the vendor’s security controls, policies, and procedures to ensure that they are aligned with the primary organisation’s security requirements.
Organisations should implement ongoing monitoring practices to ensure that vendors maintain their security posture continuously. The monitoring process includes assessments and audits to identify any potential security risks and vulnerabilities that may arise throughout the vendor engagement. Additionally, organisations should implement a tailored vendor risk management program that includes regular security training, policy updates, and incident response planning.
The ION cyber attack
The ION cyber attack serves as a significant example that emphasises the critical need for robust security measures in trading technologies. This cyber attack specifically targeted financial institutions and trading platforms, aiming to exploit vulnerabilities and gain unauthorised access to critical systems. As a result, trading technology providers have significantly strengthened their security frameworks to mitigate similar threats. Advanced intrusion detection systems and firewall technologies are now implemented to detect and block suspicious network activities, providing an additional layer of defence. Regular security updates and patches are diligently applied to address known vulnerabilities, while comprehensive threat intelligence and analysis are employed to identify emerging attack vectors and develop proactive defence strategies.
In response to the ever-increasing sophistication of cyber threats, trading technologies have evolved to prioritise robust security measures. Encryption algorithms, multi-factor authentication, and secure communication protocols are implemented to protect sensitive data and transactions, minimising the risk of unauthorised access. Continuous monitoring and anomaly detection systems are deployed to swiftly identify any suspicious activities, enabling prompt response and mitigation of potential threats. Regular security audits and penetration testing are conducted to identify vulnerabilities and reinforce the resilience of trading technologies.
Creating a cyber resilience strategy
In today’s digital world, cyber-attacks are becoming increasingly sophisticated, and the consequences of a breach can be devastating. Therefore, it’s crucial to have a cyber resilient strategy in place to protect your organisation from cyber threats.
A strong cyber resilience strategy drives continuous improvement and economic efficiency by integrating Risk Acceptance, Risk Mitigation, and Risk Transfer across Cybersecurity, Risk Management, and Finance in a way that an organisation can take a digital hit without impacting its material ability to deliver value.
A comprehensive solution is needed to offset cyber risk, yet most organisations have been slow to transition, leaving them vulnerable. Quantified action plans, which generate a personalised cyber mitigation plan, and top-down advocacy to ensure there is stakeholder buy-in at all levels, are both essential in any transition to true risk mitigation. Similarly, a patchwork approach of siloed cyber resilience will do little to stem the tide of potential attacks, which is why any solution must be holistic, with accurate risk assessments on an organisations data; optimally, by using AI models.
This level of protection is imperative in an era of rising ransomware attacks and can only be implemented by specialist teams of cyber veterans across security and risk, but also underwriting and claims, to both validate an organisation’s plans and provide support. For example, Resilience, the next-generation cyber risk company on a mission to make organisations cyber resilience, offers all the above, at a time where companies need to find a new way to structure and manage cyber risk.
Third-party breaches pose a significant risk to organisations across the private and public sectors. As third-party vendors’ use continues to grow, it is critical to ensure that these vendors are held to the same cybersecurity standards as the primary organisation. By implementing robust value-chain cyber hygiene practices as well as cyber resilience strategies, organisations can mitigate the risks associated with third-party breaches and protect sensitive data from falling into the wrong hands. In today’s ever-changing threat landscape and in the face of cyber warfare, it is essential to be proactive and take the necessary steps to secure the entire value chain.
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