Third Party & Supplier Risk Management Statistics 2024 – Everything You Need to Know

• A full 87 percent of survey respondents admitted they had faced a disruptive incident with third parties in the last two to three years, with 28 percent reporting they had suffered a major disruption and 11 percent experiencing a complete third party failure.”. ^[3]
• By end of 2020, a failure to figure out how to support remote work without exposing sensitive information led tonearly 25% of organizations paying unexpected coststo address cybersecurity breaches and malware infections. ^[1]
• The cost of failure is high 70% believe the cost of failure is $13 million. ^[1]

Third Party & Supplier Risk Management Latest Statistics

• [sharablequote tweet=” 54% of respondents said their organizations have been conducting third party risk assessments for less than 5 years.”. ^[3]
• Only 10% of respondents are extremely confident in their third party risk management programs.”. ^[3]
• Only 39% are assessing more than threefourths of those top tier vendors despite 66% saying they should be.”. ^[3]
• According to a recent survey conducted jointly by CW and Aravo, 18 percent of respondents indicated their companies work with more than 1,000 third parties, and another 16 percent said they work with more than 10,000 third parties. ^[3]
• Compliance Week [sharable quote tweet=”74 percent of companies do not know all the third parties that handle their data and personally identifiable information .”. ^[3]
• ”] Deloitte [sharablequote tweet=”In a 2019 survey of the top threats companies are worried about, third party misuses or shares our confidential data came in first with 64% of respondents worried about it.”. ^[3]
• tweet=”70% of organizations believe they are underinvested in third. ^[3]
• Internal controls testing drives the approach to such assurance in the vast majority of cases 80.5%.”. ^[3]
• tweet=”63% of all cyber attacks could be traced either directly or indirectly to third parties.”. ^[3]
• Assuming a capacity of 40 hours per week, we estimated 512 hours per month or 6,163 hours per year dedicated to third. ^[3]
• According to a recent Gartner report, the median organization contracts with 5,000 third parties. ^[4]
• In addition, 72% of compliance leaders expect that number to increase by 2024. ^[4]
• According to Zscaler , in March alone, there was a 30,000% increase in COVID 19 related attacks and malware. ^[4]
• The report found that in 2019, 44% of companies experienced a significant data breach through a third. ^[4]
• Deloitte reported that 83% of organizations experienced a third party incident in the past three years, with 11% causing a severe impact on customer service, financial position, reputation or regulatory compliance. ^[4]
• However, according to Carbon Black , 33% of surveyed financial institutions said they’ve encountered island hopping, an attack where supply chains and partners are commandeered to target the primary financial institution. ^[4]
• According to Help Net Security , 340 GDPR fines have been issued totaling over £150 million since May 2018 and that’s just one regulation. ^[4]
• The same survey found that 58% of organizations believe they have incurred a vendor. ^[1]
• A 2018 Ponemon Institute study found that 57% of respondents did not know their organizations’ vendor safeguards were sufficient to prevent a data breach. ^[1]
• And just 34% of respondents even had a comprehensive inventory of all their third parties touching their data. ^[1]
• Hyperproof surveyed in December 2020,86% of respondents from the U.S.are preparing for the potential passage of a federal data privacy and security law in the U.S. in the next few years and have factored this into their 2021 IT compliance budget. ^[1]
• 92% of tech companies surveyed by Hyperproof in December 2020 reported using a risk management standard framework, such as ones developed by NIST and ISO. ^[1]
• 78% of tech companies surveyed by Hyperproof in December 2020 said their organizations have identified clear roles, responsibilities, and owners for various risks. ^[1]
• 71% of tech companies surveyed by Hyperproof in December 2020 said their organization conducts risk assessments on a regular cadence. ^[1]
• 35% of tech companies surveyed by Hyperproof in December 2020—the biggest group—said that their organization manages IT risk in an ad hoc fashion, only when a negative event happens. ^[1]
• Another 28% reported that IT risks are managed in siloed departments, processes. ^[1]
• 44% of respondents admit they need improvement in identifying existing controls built to address certain risks. ^[1]
• Visibility into the true risk profile of third parties is still low 55% of respondents felt challenged in getting complete accurate risk information about their vendors. ^[1]
• 51% of respondents stated that collecting risk information on third parties is manual and time consuming. ^[1]
• 41% of respondents struggle to monitor their third parties on an ongoing basis because they don’t have sufficient data to monitor effectively 23% of respondents. ^[1]
• 22% of respondents have gaps in knowing what sensitive information resides within third party systems their employees are using. ^[1]
• Organizations spent 15,000+ hours on completing assessments each year Enterprises aren’t getting insights 54% say data is only somewhat valuable; less than 8% of assessments result in action. ^[1]
• Yet, 64% say the processes used are somewhat or not effective. ^[1]
• 40% of organizations use manual procedures like spreadsheets and 51% deploy risk scanning tools to vet their third parties; however 34% said these tools are only somewhat valuable while 20% said the results don’t provide any insights. ^[1]
• Only 24% of respondents say their organizations collaborate with third parties to improve their security measures. ^[1]
• Virtually all respondents (93%). ^[1]
• A full half of all respondents spend 50% or more of their total time at work on low. ^[1]
• We asked respondents to tell us what tasks they find especially tedious The three tasks selected most often as tedious are 1) Locating documents and other information needed for the audit (52% selected). ^[1]
• 2) Communicating with the auditor (52% selected this), and 3) Finding information needed to meet compliance requirements (51% selected this). ^[1]
• Joint research from Coalfire and Omdia Research in 2020 found that growing compliance obligations threaten to become unsustainable cost burdens—51% of those surveyed are spending 40% or more of their IT security budgets on compliance. ^[1]
• In fact, 83% of executives tell us that third party risks were identified after initial onboarding and due diligence. ^[5]
• 71% of organizations report that their third party network contains more vendors than it did three years ago. ^[5]
• Coordinate Third Party Risk Monitoring and Reporting with Aligned Assurance More than 80% of legal and compliance leaders tell us that third party risks were identified after initial onboarding and due diligence. ^[5]
• Watch Virtual Briefing Learn the Benefits of Third Party Partnerships 60% of organizations work with over 1,000 third parties, and these numbers will only continue to increase as business ecosystems expand and become more complex. ^[5]
• Information governance has never been more critical to business success, yet only 37% of organizations have a framework that can adapt to changing regulations. ^[5]
• 86% of companies surveyed agreed that innovative digital technologies have helped identify financial crime. ^[2]
• The leading risk among organizations for 2021 was business interruption (41%). ^[2]
• This was followed closely by cyber incidents such as cybercrime, data breaches, and fines and penalties at 40%. ^[2]
• 70% of risk and compliance experts said the pandemic has increased their reliance on technology to improve decision making, performance monitoring, and risk management. ^[2]
• Firms have identified the top five risk and compliance functions that can benefit from technology as the following Vendor oversight (54%) Marketing reviews (41%) Compliance policy/activity tracking (41%) Trade surveillance (32%). ^[2]
• Cybersecurity practices among vendors are becoming an expectation, as 44% of firms say they are being asked for proof of cybersecurity as part of a request for proposal. ^[2]
• Navex Global found that the number of “mature and advanced” risk and compliance programs grew by 29%, while the number of “reactive and basic” ones declined by 35%. ^[2]
• 34% of organizations outsource some or all of their compliance functionality. ^[2]
• When security professionals are asked how to improve their company’s security posture, the top answer is upgrading tools (67%). ^[2]
• 80% of respondents say they had a business continuity plan in place and that it helped them navigate the pandemic’s impact. ^[2]
• There has been a 45% increase in the cost of non. ^[2]
• 50% of organizations said they spend 6 10% of their revenue on compliance costs. ^[2]
• 31% of respondents predict their compliance teams will grow in the next 12 months, down from 43% in 2018. ^[2]
• Regulators fined banks $10 billion in a 15 month period through 2019, with most of those fines caused by cyber attacks (60%). ^[2]
• Under the GDPR, EU authorities can fine organizations up to €20 million, or 4% of worldwide turnover for the preceding financial year. ^[2]
• 44% of organizations say their top compliance management challenges are handling compliance assessments, undergoing control testing, and implementing policy and process updates. ^[2]
• 76% of compliance managers say they manually scan regulatory websites to track changes and assess the impact on their organization. ^[2]
• Stagnant budgets and a shifting workforce have left many compliance teams feeling stretched, with 87% of organizations reporting they have no additional capacity due to being understaffed or only adequately staffed. ^[2]
• 55% of organizations say their compliance culture is based around a “Can we?” rather than “Should we?” attitude, indicating a focus on building a more proactive and positive compliance culture. ^[2]
• 43% of those under extreme pressure to increase revenue due to the pandemic said they would like to deploy and ML to combat financial crime in the future. ^[2]
• 68% of companies prioritize threats according to the potential cost to the business. ^[2]
• In the wake of the pandemic, compliance training has shifted to elearning, with 62% of organizations reporting using that method rather than blended learning (30%). ^[2]
• 44% of organizations have experienced a breach within the last 12 months, with 74% saying it was the result of giving too much privileged access to third parties. ^[2]
• 47% of firms predict they will spend more on third party risk management resources in 2021. ^[2]
• 58% of organizations say that the top challenge they face when it comes to third party risk management is vendor responsiveness in the due diligence phase. ^[2]
• 48% of organizations find it challenging to track third. ^[2]
• 63% of organizations say that reliance on a vendor’s reputation is the most common reason they are not thoroughly evaluating their privacy and security practices. ^[2]
• 61% of respondents say their third party management program does not define or rank risk levels. ^[2]
• 73% of organizations find managing third party permissions and remote access to be a drain on internal resources and an overwhelming undertaking for their team. ^[2]
• Only 49% say their organizations are doing this due diligence with all third parties before allowing them access to sensitive and confidential information. ^[2]
• 65% of organizations say they predict spending more on cybersecurity and privacy resources in 2021. ^[2]
• Almost 90% of web application breaches were caused by credential abuse, and phishing was present in more than a third of all breaches. ^[2]
• 78% of companies worldwide say zero trust has increased in priority, and nearly 90% are currently working on a zero trust initiative. ^[2]
• More than 60% of all data breaches involve stolen or weak credentials. ^[2]
• From February to April 2020, attacks targeting the financial sector grew by 238%. ^[2]
• Customer personal data is included in 44% of data breaches. ^[2]
• yearto date is up 27% compared to the fiscal year 2020, with phishing and ransomware seen as the top attack methods. ^[2]
• 67% of organizations with 5,001–10,000 employees plan to invest in employee security awareness, which is twice the number reported in 2019 (33%). ^[2]
• About 60% of companies have over 500 accounts with non expiring passwords, highlighting just one of the inadequate security practices that leave companies open for data breaches. ^[2]
• By 2024, Gartner predicts that 65% of the world’s population will have its personal data covered under modern privacy regulations. ^[2]
• The top five highest risk areas as defined by chief audit executives are Cybersecurity (65%) IT (51%); third party relationships (41%) Compliance/regulatory (41%). ^[2]
• 66% of audit departments communicate with other risk and control groups within their organizations on how they can better share resources, particularly risk assessment and data analytics. ^[2]
• Pre pandemic, internal audit budgets grew 5% per year between 2017 and 2019. ^[2]
• However, in 2020, that figure saw a 1.5% decrease. ^[2]
• The Institute of Internal Auditors suggests that over 75% of audit teams lack a modern audit technology solution. ^[2]
• 62% of survey respondents said that moving from traditional, manual processes to a data driven audit is a top challenge. ^[2]
• Only 29.8% of respondents say that they regularly use data analytics in their audits. ^[2]
• 37% of companies perform one or more internal audits annually. ^[2]
• 62% of companies expect more compliance involvement in cyber resilience in the coming years. ^[2]
• Half of survey respondents expect the personal liability of compliance professionals to increase in the next 12 months, and 10% expect it to increase significantly. ^[2]
• 34% of organizations say that regtech solutions are affecting the management of compliance. ^[2]
• The total projected cost of financial crime compliance in the U.S. and Canada for 2021 is $49.9 billion, which is an increase of 19% from 2020. ^[2]
• A January 2020 Ponemon Institute report revealed that “In the past two years, 53% of organizations have experienced at least one data breach caused by a third party. ^[6]
• As per reports from the , data breaches in 2021 have increased by 17% from 2020. ^[7]
• According to , 60% of security incidents will result directly from issues with third parties. ^[7]
• According to a , 60% of organizations work with over 1,000 third parties and this number is growing as business systems become more complex. ^[7]
• found that almost half 48% of organizations find it a huge challenge to track and manage third. ^[7]
• At best, only 40% say they thoroughly understand their third party cyber and privacy risks. ^[0]
• But those that had the best cybersecurity outcomes over the past two years are 11x more likely to say they do. ^[0]
• Only 40% of survey respondents say they thoroughly understand the risk of data breaches through third parties, using formal enterprise. ^[0]
• Fifty seven percent expect a jump in attacks on cloud services, but only 37% profess an understanding of cloud risks based on formal assessments. ^[0]
• They are 11x more likely to report a high understanding of their third. ^[0]
• 69% of the “most improved,” 31% for the rest. ^[0]
• Fewer than half of all respondents — 30% to 46% — say they’ve responded to the escalating threats that complex business ecosystems pose. ^[0]
• Publicly listed organisations (47%). ^[0]
• They’ve not refined their third party criteria (58%), not rewritten contracts (60%), not increased the rigor of their due diligence (62%). ^[0]
• The European Union Agency for Cybersecurity predicted in a July 21, 2021 report that supply chain attacks would quadruple in 2021 over the number of 2020 attacks. ^[0]
• Those who’ve had the best cybersecurity outcomes over the past two years, however, were 34x more likely to have achieved their public private collaboration goals “very effectively.”. ^[0]
• Organisations increasing their cyber budgets in 2024 were significantly likely to say they have achieved these goals “very effectively”. ^[0]
• Share knowledge about new threats, approaches, and solutions in my peer set (38%). ^[0]
• Demonstrate avoidance of tangible financial losses (36%) Activate public private sector relationships for more effective responses to a cyber attack on our organisation (33%) Promote broader awareness and upskilling of workforce (32%). ^[0]
• The 2018 Ponemon statistics show that at least 56% percent of organizations have experienced a data breach due to a vendor’s security shortcomings. ^[8]
• 65 % of respondents say that it’s hard to manage cybersecurity risks associated with third. ^[8]
• The survey adds that 71% of respondents are expecting their companies to become more reliant on third parties in the next two years. ^[8]
• The number of data breaches related to third party vendors has increased by 22% since 2015 . ^[8]
• 74% believe that third party vendor selection overlooks potential key risks, with 64% saying that their organization focuses more on cost than security when outsourcing. ^[8]
• A total cost of about $1.38 billion, according to the settlement documents. ^[8]
• Resulting in an estimated 110 million affected parties. ^[8]
• An estimated 109 million consumers were affected. ^[8]
• Under Armour`s data breach was one of the biggest of 2018, leading to a 4% drop in the company’s shares. ^[8]
• Ltd. vendor was responsible for exposing the personal data of 80,000 blood donors, according to Info Security Magazine. ^[8]

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Reference

1. pwc – https://www.pwc.com/us/en/services/consulting/cybersecurity-risk-regulatory/library/global-digital-trust-insights/risks-posed-third-parties-and-supply-chain.html.
2. securityboulevard – https://securityboulevard.com/2021/02/it-risk-management-third-party-risk-management-and-compliance-statistics-for-2021/.
3. secureframe – https://secureframe.com/blog/compliance-statistics.
4. frsecure – https://frsecure.com/blog/15-eye-opening-vendor-risk-statistics/.
5. panorays – https://panorays.com/blog/third-party-cyber-risk-6-facts-every-ciso-should-know/.
6. gartner – https://www.gartner.com/en/legal-compliance/insights/third-party-risk-management.
7. forbes – https://www.forbes.com/sites/forbestechcouncil/2020/07/14/the-rise-of-third-party-digital-risk/.
8. metricstream – https://www.metricstream.com/blog/2024-trends-whats-next-third-party-risk-management.html.
9. securitystudio – https://securitystudio.com/top-7-vendor-related-breaches-of-all-time/.

How Useful is Third Party Supplier Risk Management

To begin, third-party suppliers play an integral role in the success and efficiency of many organizations. From providing essential goods and services to enabling partnerships and collaborations, third-party suppliers are often indispensable to a company’s operations. However, relying on external suppliers also introduces a level of risk that must be carefully managed.

One of the primary reasons why third-party supplier risk management is crucial is because it helps protect a company’s reputation and brand. Any misstep or failure on the part of a supplier can have a direct impact on the perception of a company in the eyes of its customers and stakeholders. By implementing sound risk management practices, businesses can minimize the likelihood of negative outcomes that could tarnish their reputation.

Additionally, third-party supplier risk management helps companies ensure compliance with various regulations and standards. Suppliers may operate in different jurisdictions or be subject to specific industry requirements, making it essential for businesses to ensure that their suppliers adhere to these standards. Failing to do so can result in penalties, legal consequences, and reputational damage.

Furthermore, effective third-party supplier risk management enables business continuity and resilience. By identifying potential risks and developing strategies to mitigate them, organizations can better prepare for unforeseen events or disruptions. This proactive approach can help businesses maintain their operations and service delivery in the face of challenges, such as supply chain disruptions, natural disasters, or economic instability.

Another important aspect of third-party supplier risk management is the impact it can have on financial performance. Suppliers are an integral part of the cost structure of many businesses, and any disruptions or inefficiencies in the supply chain can lead to financial losses. By assessing and managing risks associated with third-party suppliers, companies can reduce costs, improve efficiency, and protect their bottom line.

In conclusion, third-party supplier risk management is a valuable practice for any business that relies on external suppliers for goods and services. By implementing robust risk management processes, companies can safeguard their reputation, ensure compliance, maintain business continuity, and protect their financial performance. While the effort and resources required to manage third-party supplier risks may be substantial, the benefits far outweigh the costs. In today’s dynamic and interconnected business environment, a proactive and strategic approach to managing supplier risks is essential for long-term success and sustainability.

In Conclusion

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