The number of cyber breaches targeting organizations’ supply chains continues to rise, with an average 4.16 breaches reported to be negatively impacting operations this year — a 26% increase from the mean number of 3.29 breaches in 2022, according to BlueVoyant.
“Attacks targeting external vendors and partners are a constant threat,” said Joel Molinoff, BlueVoyant’s global head of Supply Chain Defense. “Our data suggests that the scope of the problem is increasing, with more enterprise vendors and suppliers falling prey to cyber attacks. Enterprises recognize the issue but the standard approach to third-party risk management is proving inadequate. Companies now need to focus energies on methods that proactively illuminate and reduce supply chain risk.”
AI’s impact on cyber defense strategies
Every industry sector, except financial services, showed an increase in the number of breaches in their supply chains that negatively impacted their organization. The increasing breaches come despite survey respondents demonstrating that supply chain cyber risk management is a strategic priority.
47% of respondents monitored their supply chain for cyber risk monthly or more in 2023, compared to 41% in 2022.
Discussions of artificial intelligence have dominated the technology market, including its use for cyber defense and on the flip side, its use by cybercriminals to attack organizations. Respondents say they are likely to be using AI to monitor their digital supply chain, but prefer to rely on a combination of AI and human analysts. 55% said they use automation only to manage certain aspects of their third-party cyber risk.
85% of respondents stated that their budget for third-party cyber risk has increased over the last twelve months, with 51% indicating they’ll allocate additional internal resources and 46% likely to add external resources. 44% of respondents reported briefing senior management teams monthly or more in 2023, compared to 38% in 2022.
Challenges in supply chain risk management
Despite the increased oversight and more regular monitoring, a real challenge has emerged — getting supply chain vendors to consistently address risk in a timely manner after being made aware of a vulnerability or security issue.
Only 19% of respondents are actively working with their supplier to make sure issues are remediated. The rest are mainly relying on the supplier to fix the issue, which can leave them vulnerable.
“With a never-ending flow of headlines and regulatory requirements demanding attention to supply chain cyber risk, it is hard to ignore the importance of getting the proper defenses in place,” said Brendan Conlon, chief operating officer for BlueVoyant’s Supply Chain Defense. “Enterprises should examine their current approaches and identify areas for greater efficiency and continuous coverage — not only in detecting emerging vulnerabilities and risk, but also in quickly remediating threats hand-in-hand with impacted third parties.”