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Third-party risk, commonly known as vendor risk, is about analyzing and controlling the fact that your data could be compromised by outside vendors and service providers. Companies increasingly use third parties to quickly scale and reduce costs. And, the use of technologies such as IoT, mobile and cloud by vendors add to the question ... where is my data and how can I protect it in someone else’s hands? Many companies contract with third parties without considering data, operational and financial risks. And exposure at the third-party level can exponentially increase when considering 4th, 5th, and 6th parties (or nth parties) with whom vendors (and their vendors) do business. The more that companies outsource aspects of their business to third parties, the more complex becomes the web of risk.
This web makes it increasingly difficult to monitor third-party connections at the operational level, and more importantly, create policies that effectively minimize the associated risks. These research findings show there is an assumption of data protection by third parties that may not be valid and there is little consideration given to the data security of nth parties.
Read our third-party risk white paper for more information and to understand the top challenges & potential areas of vulnerability with third-party vendors.