Security teams often grapple with the uncertainty of data exposure in their SaaS supply chain, especially with third-party SaaS vendors. Threat actors can exploit these breaches to compromise multiple applications, all while remaining undetected. For this reason, risk management of third-party SaaS applications is fundamental.

Employees appreciate the ease with which they can seamlessly connect SaaS vendors to company data, granting them permissions and access. While the streamlined onboarding process is essential for efficiency and scalability, it introduces security issues. In this fast-paced work environment, some SaaS applications bypass security and IT approval processes, leading to “shadow IT” practices that can become out of control.

Understanding Third-Party Risk Management

Third-party risk management (TPRM) in the context of SaaS is evaluating and managing potential risks posed by third-party vendors and service providers within the SaaS supply chain. TPRM is essential in helping security and IT teams discover and mitigate the risks associated with third-party services. These risks span cybersecurity concerns, data privacy vulnerabilities, compliance gaps, operational challenges, financial considerations and reputational issues.

For example, team members can quickly and easily establish connections between SaaS vendors and company data, providing them with permissions and access. This convenience presents a range of security concerns because, unlike traditional vendors, many SaaS applications sidestep conventional security or IT approval processes.

While SaaS vendors bear some degree of responsibility for security, organizations must remain vigilant in overseeing third-party risks. This vigilance is essential for a secure and resilient business environment and is paramount to ensure compliance with industry standards and IT oversight.

Want to ensure SaaS security through TPRM? Start with these practices.

Discovery and Categorization of Third-Party Connections

Identify and categorize all third-party connections within an organization in order to understand  potential security and compliance threats. Without an analysis of access levels and vendor security, security and IT teams can be left in the dark, hindering their ability to assess and safely use specific third-party SaaS applications. Using SaaS security posture management (SSPM) technology enables organizations to discover their SaaS supply chain using App2App authentication and all their third-party SaaS applications. SSPM solutions offer contextual information on the level of access these applications have to organizational assets and provide details about the vendor’s security posture through continuous analysis.

Due Diligence and Assessment

Before onboarding third-party applications, conduct due diligence to ensure that risky applications are not introduced into an organization’s SaaS stack. This effort emphasizes the need to assess third-party security controls, policies, and procedures, ensuring they meet the IT organization’s required security and compliance standards before onboarding. Organizations can address this challenge by seeking solutions that provide essential security and compliance information about relevant SaaS vendors and applications. Details such as security and privacy compliances, vendor size, vendor locations and historical threat intelligence alerts regarding breaches or security incidents experienced by the vendor are crucial components of the due diligence process.

Continuous Monitoring for Security Threats

TPRM goes beyond prevention. It emphasizes the importance of regularly assessing third-party performance and security practices to ensure ongoing compliance and adherence to established standards. This approach helps organizations stay ahead of evolving risks that could influence the application’s compliance. An effective strategy involves adopting a security solution capable of continuous monitoring for updates in vendor information, including changes in security and privacy compliances, threat intelligence alerts, and overall risk posture.

Incident Response Plan of Action

For a security incident involving a third-party connection, organizations should have an effective incident response plan. This starts with having the ability to receive near real-time threat intelligence alerts when breaches or security incidents occur, enabling quick and effective responses.

Documentation for Compliance and Reporting

Maintaining detailed records of the TPRM process is essential for demonstrating compliance with security standards. The benefits of generating comprehensive reports include providing transparency and facilitating smooth audits of the organization’s risk management efforts. Organizations should use SSPM solutions that can effectively help manage the entire inventory of SaaS applications, enabling the IT team to view all relevant information supporting the TPRM process and export necessary reports for audit purposes.

Establishing an Effective TPRM Strategy to Mitigate Security Threats

Failing to develop and implement a robust TBRM practice can have serious security repercussions. Cybersecurity breaches stemming from vulnerabilities introduced by third-party vendors may compromise sensitive data, lead to financial losses and harm the organization’s reputation. Furthermore, failure to comply with data privacy regulations can lead to substantial fines and legal liabilities.

TPRM is an indispensable process critical to identifying and addressing potential vulnerabilities introduced by third-party vendors. Its significance lies in strengthening an organization’s security posture by establishing and following through on best security practices across the entire SaaS supply chain.

A proactive approach to TPRM can prove instrumental in safeguarding organizations against SaaS threats, beginning with a comprehensive evaluation of the cybersecurity practices of third-party vendors to pinpoint potential vulnerabilities and risks within the supply chain. These assessments empower informed decision-making, facilitate effective risk mitigation and ensure alignment with the organization’s stringent security standards, ultimately shining a light on shadow IT and bolstering overall security defenses.