2024 CrowdStrike Incident: Do You Effectively Manage your Third-Party Vendors?

On July 19, 2024, American cybersecurity company CrowdStrike released a faulty update to its security software, which led to widespread issues for computers running Microsoft Windows. Approximately 8.5 million systems crashed as a result and were unable to properly restart. This incident has been described as the largest outage in the history of information technology and was unprecedented in scale. The outage had a major impact on daily life, businesses, and governments across the globe. Various industries, including airlines, airports, banks, hotels, hospitals, manufacturing, stock markets, broadcasting, gas stations, retail stores, and more, were affected. Additionally, governmental services such as emergency services and websites were disrupted. The estimated worldwide financial damage is at least US$10 billion. Any lesson well learned?

In today’s rapidly evolving digital landscape, the interconnections between businesses are vital for driving growth and resilience. Third-party relationships have become invaluable commodities, with organizations relying heavily on external vendors and partners to handle various aspects of their day-to-day operations. From cloud providers to software suppliers and customer experience services, these external collaborations fuel innovation and drive operational efficiency. However, this reliance introduces a new layer of complexity having to do with cyber security: Third-party risk. This risk is compounded by the fact that third parties themselves often work with their own external partners, multiplying the complexity and scale of cyber security challenges. It is imperative for organizations to address these concerns to safeguard their most valuable assets and ensure the operational efficiency of their critical business processes.

Key Risks of Third-Party Relationships

Third-party risk is the danger posed to an organization by external parties in its ecosystem or supply chain, including vendors, suppliers, partners, contractors, or service providers. These external parties have access to internal company or customer data, systems, processes, or other sensitive information. Even with strong cybersecurity measures and a solid remediation plan, third-party vendors may not adhere to the same standards, increasing vulnerabilities and providing easier access for potential threats to exploit security systems. According to Gartner,  in the last four years, legal and compliance leaders have classified 2,5X more third parties as high-risk.

The key risks of third-party relationships are as follows:

• Data Breaches: Third-party vendors often have access to sensitive data. If a vendor’s security is compromised, your data can be exposed.
• Compliance Issues: Different industries have varying regulatory requirements. Non-compliance by a vendor can result in hefty fines and legal actions.
• Operational Disruptions: Dependence on third parties for critical services can lead to operational disruptions if the vendor experiences issues.
• Reputational Damage: A vendor’s poor performance or security breach can harm your organization’s reputation.

Understanding Third Party Risk Management

Managing those risks associated with the Third-Party networks while not hindering business speed is a critical challenge for leaders. In the European market, the NIS 2 Directive and DORA have been established to ensure effective management of existing third-party risks by providing clear guidelines and focusing on Supply Chain Risk. These regulatory frameworks underline the fact that Third Party Risk Management (TPRM) is a key component of internal Risk Management. In essence, this means delving deeper into your supply chain, assessing the risks posed by your suppliers, and developing strategies to manage these risks as if they were your own.

More specifically, Third Party Risk Management involves identifying, assessing and controlling risks associated with outsourcing services to third-party vendors. As organizations expand their network of vendors, the need for robust TPRM becomes increasingly critical.

Neurosoft’s Third-Party Risk Management service: Centraleyes platform as a game-changer in TPRM automation

Centraleyes is an advanced cloud-based integrated risk management platform that reimages how businesses quantify and manage vendor risk. It automatically aggregates data from vendors, provides real time threat intelligence and performs active perimeter scanning. The results of these data and feeds are automatically integrated in each vendor’s profile to clearly generate actionable insights, helping identify threats, classify high risk vendors and provide remediation guidance.

NIS 2 and DORA underscore the critical importance of managing third-party risks within their regulatory frameworks. By adopting a strong Third-Party Risk Management strategy, organizations can not only meet these regulations, but also strengthen their cybersecurity defenses and ensure business continuity. Integrating this GRC platform into our Third-Party Risk Management Service creates a powerful and efficient risk management program. Centraleyes offers a wide range of tools and capabilities that simplify and automate risk assessment, guarantee regulatory compliance, promote collaboration, and provide real-time insight into third-party risks. These are all crucial elements of a TPRM program that every organization needs assistance with, in order to achieve compliance and peace of mind.

Neurosoft’s Third-Party Risk Management Service is carried out by its experienced Advisory team. These seasoned professionals leverage leading-edge technologies and the Centraleyes platform to effectively pinpoint blind spots and gaps within organizations, enabling them to concentrate on formulating and executing mitigation plans unimpeded. In addition to this service, Neurosoft, a leading Managed Services Provider (MSP), offers end-to-end integrated services in Cyber Security, Technology Solutions and Field Services, directly supporting the implementation of the appropriate Information security roadmap.

TPRM not only protects your organization from potential risks but also fosters trust with your customers and stakeholders. By leveraging Neurosoft’s Third-Party Risk Management Service, organizations can enhance their overall risk posture, protect sensitive data and ensure business continuity in an increasingly interconnected and complex business environment.

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