Third-party breaches create network weak spots

A new report from Black Kite shows how third-party data breaches create critical weak spots in extended networks, potentially leaving businesses open to cyber attacks, which can have a negative ripple effect across the organization and its stakeholders.

The report is based on analysis of 81 vendor breaches impacting 251 companies in 2023. Unauthorized network access was the leading cause of breaches, accounting for over half (53 percent) of third-party breach incidents. This represents a 26 percent increase from 2022, with ransomware being the most common method of compromise.

The second most common cause of breaches is ransomware attacks, with 28.5 percent. Additionally, breach disclosure time significantly decreased last year, with companies reporting incidents within 76 days on average in 2023, compared to 108 days in 2022.

"Last year demonstrated a complex tapestry of third-party data breaches. The report underscores the importance of strong software security and real-time third-party risk management to spot and respond to vulnerabilities and threats early," says Ferhat Dikbiyik, head of research at Black Kite. "For businesses, the lessons are clear: enhance vigilance, foster transparency and continuously improve cybersecurity practices will ensure their data, and their stakeholders', are safeguarded and digital business integrity is protected."

According to the report, 40 percent of companies that suffered from a data breach caused by a vendor were indirectly affected by ransomware group CL0P's mass exploitation of vulnerabilities in MOVEit and GoAnywhere, highlighting the need for continuous monitoring of third-party vendors since point-in-time assessments aren’t able to keep up with rapidly evolving cyber threats.

The report also shows that large companies, with revenues more than $10 billion, are the hardest hit by ransomware attacks on their vendors suggesting that simply monitoring the most critical vendors isn't enough.

Vendors in technical services remain the primary source of third-party breaches for the fourth consecutive year, making up over a third (35 percent) of incidents. Healthcare is the number one industry affected by third-party breach incidents (33 percent).

The full report is available from the Black Kite site.

Image credit: fotogestoeber/Shutterstock