In 2025, third-party vulnerabilities have become a critical concern for corporations, with a significant portion of data breaches traced back to external partners and vendors. This has placed an increased emphasis on third-party risk management programs at organizations to help minimize those risks.
One glaring example is the exploitation of the MOVEit file transfer software vulnerability (CVE-2023-34362) by the threat group C10p, which triggered large-scale data breaches across industries. This incident shed light on how a single flaw in a third-party system can compromise an organization’s security.
Recent research revealed that 97% of the top 100 U.S. banks experienced third-party breaches over the past year, emphasizing how interconnected supply chains expose financial institutions to severe risks.
Shouldn’t you protect your business when everything is so at risk?
This article breaks down the most common third-party vulnerabilities and offers practical ways businesses can protect themselves.
What is a Third-Party Vulnerability?
A third-party vulnerability refers to a weakness or flaw in an external vendor, supplier, or service provider’s system, process, or software that can be exploited to compromise the security of a connected organization. These vulnerabilities are especially dangerous because they lie outside an organization’s direct control, making it harder to detect, mitigate, and prevent them. Third parties themselves can be a vector just by having access – think about the Target compromise from their HVAC vendor back in 2007.
A third-party vulnerability can stem from a variety of sources, including:
- Software flaws in vendor tools, applications, or platforms.
- Inadequate security protocols by external partners.
- Lack of visibility into vendor security practices.
A third-party vulnerability can result in data breaches, operational disruptions, and significant financial losses.
To understand how companies can better manage these risks, read our guide on what is third-party risk management which also discusses the roles that third-party risk management companies can play in helping your organization better manage third-party risk?
Common Examples of Third-Party Vulnerabilities Corporations Face
Corporations face a wide range of third-party vulnerabilities that expose them to cyberattacks, operational disruptions, and data breaches. Here are four of the most significant vulnerabilities companies must address.
These examples of third-party vulnerabilities highlight the growing need for companies to enhance their vendor risk management strategies.
1. Data Breaches
Data breaches occur when vendors with weak security controls fail to protect sensitive information, allowing threat actors to access corporate data. For example, the MOVEit File Transfer vulnerability (CVE-2023-34362) exploited by the threat group Cl0p led to breaches affecting thousands of companies worldwide.
These breaches often result from inadequate encryption, unpatched software or hardware, poor access controls, or insecure storage by third-party vendors, leading to leaked financial records, customer information, and proprietary business data.
2. Software Supply Chain Attacks
Software supply chain attacks occur when hackers compromise a trusted software vendor to distribute malware or malicious code through software updates.
One of the most infamous cases was the SolarWinds attack, where attackers inserted malware into a routine software update, affecting thousands of organizations, including major corporations and government agencies.
This third-party vulnerability is particularly dangerous because they originate from trusted providers, making them harder to detect.
3. Vendor Misconfigurations
Misconfigured systems, such as exposed databases, mismanaged cloud storage (like open Amazon S3 buckets), or insecure file-sharing platforms, provide hackers with an easy entry point.
For instance, a single misconfiguration in a vendor’s cloud storage could leave sensitive corporate files exposed to the internet.
A notable example is the Accenture cloud misconfiguration incident, where unsecured cloud buckets exposed sensitive customer data, emphasizing the need for ongoing security audits of vendor systems.
4. Unauthorized Access
When third-party vendors are granted excessive or unchecked access to internal systems, it creates a backdoor for cybercriminals. Vendors with “always-on” access can be exploited if their credentials are stolen.
The Target data breach of 2013 is a classic case, where hackers gained entry through an HVAC vendor’s access credentials, eventually stealing the payment information of 40 million customers.
This example shows the importance of enforcing Zero Trust security models and implementing least-privilege access policies for third-party vendors.
How Do These Vulnerabilities Impact Businesses?
Addressing who owns third-party risks is essential, as these vulnerabilities can significantly affect finances, brand reputation, and regulatory compliance. Here’s how:
1. Financial Losses
Breaches from third-party vulnerabilities lead to substantial financial impacts, including response costs, legal fees, and regulatory fines. Compliance failures with laws like GDPR and DORA can result in severe penalties. The IBM Cost of a Data Breach Report found that the global average breach cost reached $4.88 million in 2024, with third-party vulnerabilities being a major contributor.
2. Reputational Damage
Data leaks from third-party partners can harm a company’s brand reputation, eroding customer trust and loyalty. A notable example is the Optus breach, where attackers exploited a vendor’s credentials, resulting in massive reputational damage. Customers often reconsider their relationship with brands after such incidents.
3. Regulatory Non-Compliance
Vulnerabilities in third-party systems can cause non-compliance with laws like GDPR, DORA, and the California Consumer Privacy Act (CCPA). Companies can face fines of up to 4% of global revenue under GDPR. Regulatory bodies now emphasize third-party risks, holding companies accountable for breaches caused by vendor vulnerabilities.
How to Mitigate Third-Party Vulnerabilities
Mitigating third-party vulnerabilities requires a proactive strategy to minimize risks and strengthen security. Implementing a third-party risk management framework ensures businesses can better protect against disruptions caused by vendor-related issues. Here are some key solutions to consider:
- Vendor Risk Assessments: Regularly evaluate vendor security, compliance, and access controls to detect potential threats early. Use automated tools like FortifyData to streamline assessments.
- Real-Time Monitoring: Continuously track vendor activity, access, and system changes to spot unusual behavior. Real-time oversight enables faster detection and response.
- Incident Response: Prepare a clear plan to handle vendor-related breaches, covering threat identification, containment, and notification to reduce potential damage.
- Contractual SLAs: Set clear SLAs with vendors, defining timelines for patching vulnerabilities and enforcing penalties for non-compliance to ensure timely risk mitigation.
Even with proactive measures, a third-party cyber incident can still negatively impact your business, leaving a mess to clean up. Your efforts in a third-party risk management program aim to minimize that impact.
But ask yourself — would you handle it differently next time? Should you segment vendor access differently?
Be more stringent with role-based access control (RBAC)? Or take a firmer stance on contractual obligations? Proactive reflection and tighter security controls can drastically reduce future risks.
Why You Should Consider FortifyData
FortifyData is a third-party risk management company, that offers a comprehensive approach to managing third-party vulnerabilities, empowering businesses to stay ahead of potential threats. Additionally, its customizable approach to access controls, data segmentation, and vendor obligations enables organizations to create a more secure and resilient third-party risk management strategy.
The Risk Corporations Face from third party vulnerabilities can be managed
The risk corporations face from third-party vulnerabilities is undeniable. However, it can be effectively managed with the right approach. Identifying, understanding, and mitigating these vulnerabilities is essential to protect financial stability, maintain brand reputation, and ensure regulatory compliance.
FortifyData simplifies third-party risk management by offering automated risk assessments, real-time monitoring, and incident response support. Ready to protect your business from third-party vulnerabilities? Reach out toFortifyData and secure your vendor ecosystem today.
