The banking industry is increasingly reliant on third-party vendors for various services, from customer data management to software development. While these partnerships are critical for operational efficiency, they also introduce significant cybersecurity risk. To protect sensitive customer data and ensure regulatory compliance, banking security teams must adopt proactive measures to mitigate third-party risk.
Third-Party Risks in the News
Recent incidents have highlighted the dangers of relying on external vendors:
- Bank of America and Infosys McCamish Systems Breach (2024)
In early 2024, Bank of America suffered a data breach through its third-party provider, Infosys McCamish Systems. This breach exposed sensitive customer data, including Social Security numbers, affecting over 57,000 customers. This incident demonstrated how vulnerabilities in third-party providers can directly impact financial institutions and their customers.
- MOVEit Supply Chain Attack (2023)
The MOVEit attack in 2023 targeted vulnerabilities in file transfer systems widely used by third parties. Many financial institutions were compromised, and sensitive customer data was stolen. This attack emphasized the importance of vetting third-party integrations and ensuring any vulnerabilities are patched and continuously secured.
Best Practices to Mitigate Third-Party Risks
1. Conduct Comprehensive Vendor Assessments
Perform thorough due diligence on all third-party providers before onboarding. Assess their security policies, incident response protocols, and regulatory compliance to ensure alignment with your institution’s standards.
2. Implement Robust Contracts and SLAs
Clearly define security expectations in contracts. Include clauses for regular audits, breach notification timelines, and penalties for non-compliance with security standards.
3. Monitor Vendor Activity Proactively
Use a defense-in-depth strategy to implement layers of cybersecurity defense as a proactive protection against malware infiltrating a bank through a third-party vendor. Regularly review access logs and enforce the principle of least privilege for third-party accounts.
4. Require Regular Security Audits and Certifications
Mandate periodic security audits and insist on compliance certifications such as ISO 27001 or SOC 2 for critical vendors.
5. Enhance Incident Response Plans
Incorporate third-party breach scenarios into your incident response plans. Conduct tabletop exercises to ensure readiness for vendor-related incidents.
The CodeHunter Solution
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