When it comes to managing third party risk, it's important to identify and understand the different types of threats that businesses face. To this end, there are four core types of risk that every business should be aware of, which can increase your company's cyber attack surface. In this article, we will be discussing these four types of risk, utilizing the key phrase 'cyber attack surface definition', and provide strategies on how to mitigate them.

Introduction

In the era of globalization and digital connectivity, businesses often rely on third parties to optimize operations, spur innovation and maintain competitiveness. However, the increased interconnectivity also expands the cyber attack surface your organization. The 'cyber attack surface definition' is the total number of points where an unauthorized user can try to enter data to, or extract data from, your digital environment.

Main Body

Type 1: Strategic Risk

The first risk type is Strategic Risk. This type of risk refers to the potential threats that strategic, decision-making processes can face when a third-party vendor is involved. Strategic decisions that involve outsourcing operations, for instance, can affect core business functions and have far-reaching implications.

Mitigation against strategic risk involves comprehensive due diligence before entering into any partnership. Careful analysis of the vendor’s strategic goals, track record, and reputation can help assess alignment with your business objectives and identify any potential areas of concern.

Type 2: Compliance Risk

The second risk type is Compliance Risk. As businesses are subject to various regulatory frameworks, third-party vendors must also be in compliance to prevent legal and financial penalties. The risk of non-compliance not only threatens your reputation but can also increase your cyber attack surface.

To mitigate compliance risk, you should demand transparency from the vendors regarding their compliance programs. Require them to demonstrate they are in line with all relevant regulations and standards such as the GDPR, HIPAA, etc. It's also advisable to conduct periodic audits and assessments to verify ongoing compliance.

Type 3: Operational Risk

The third risk type is Operational Risk. Operational risks refer to potential losses resulting from inadequate or failed procedures, systems, or policies. This type of risk is especially heightened when third-parties have access to sensitive or confidential information, thereby increasing your organization's cyber attack surface.

Efficient mitigation strategies include setting clearly defined roles and responsibilities for both parties, conducting regular performance assessments, and having robust contingency plans in place to deal with any operational failures.

Type 4: Cybersecurity Risk

The fourth risk type is Cybersecurity Risk. This refers to the potential threats posed by cybercriminals who are looking to exploit vulnerabilities in your systems or that of your vendors. With the increased interconnectivity and reliance on third parties, the cyber attack surface definition of your company inevitably expands.

Mitigating this risk requires robust cybersecurity measures both in-house and at third-party level. Establish strong security protocols, perform regular cybersecurity risk assessments, employ threat intelligence systems and insist on regular security checks from your third-party vendors. Always ensure that vendors understand and comply with your company’s cyber security policies as part of the contract.

Conclusion

In conclusion, third party risk management is a critical facet of contemporary business operations. Engaging with third party vendors is often inescapable, but it does mean the expansion of your cyber attack surface definition; hence, the importance of being aware and proactive in managing potential risks. By understanding these four core risk types - strategic, compliance, operational, and cybersecurity - businesses can create effective plans and strategies to protect themselves and mitigate these threats. Comprehensive vendor management, due diligence, robust security protocols, and an ongoing commitment to risk assessment and mitigation can substantially reduce the impact of these risks on a company.