If you think a vendor is just a checkbox on a spreadsheet, think again. Last year, more than a third of reported breaches came through a supplier, partner, or outsourced service ,  and that number is rising. This blog walks through the problem, why the old checklists don’t cut it, and clear steps you can take today to stop a supplier from costing you millions.

The third-party threat landscape ,the new front door

About 35.5% of breaches in 2024 were tied to third parties ,  meaning attackers didn’t break your perimeter; they walked in through someone you trusted. That trend shows attackers are looking for the easiest path: a vendor with broad access, weak patching, or a shared app. 

Two big supply-chain hits make the point plain. Kaseya’s 2021 VSA attack spread from a single IT tool into roughly 1,500 businesses, shutting shops and creating sudden, wide damage. The MOVEit incidents exposed tens of millions of records across thousands of organizations ,  a reminder that a shared file tool can expose everyone who touches it. These are not distant headlines; they are case studies in how vendor access becomes your problem. 

Actionable insight: treat vendors with privileged access the same way you treat your own systems ,  continuous checks, fast patch rules, and clear stop-gap controls.

Regulatory pressure: DORA, GDPR, and the SEC won’t look away

If your business touches EU finance or holds EU customer data, the rules got tougher. The EU’s DORA came into force on January 17, 2025, and forces financial firms to show real oversight of ICT third parties ,  from testing to incident reporting. Expect closer audits and stronger evidence requirements. 

GDPR still allows fines up to €20 million or 4% of global turnover, whichever is higher, when personal data is mishandled ,  and a vendor breach can trigger that. So a single vendor misstep may land you in front of data regulators. 

Across the pond, securities regulators are watching cyber disclosure and control failures more closely. Fines and enforcement actions are no longer rare; they are business risk calculations you must include. 

Actionable insight: build vendor evidence packs that show testing, incident timelines, and remediation ,  regulators ask for paperwork, so give it to them fast.

Why traditional vendor audits fail (and how attackers exploit that)

Annual questionnaires and manual checks look tidy, but attackers move fast and exploit simple gaps: open APIs, stale credentials, slow patching, and subcontractors your contract never mentioned. Manual audits miss the day-to-day changes that create risk. 

Real problems we see: long patch windows, forgotten service accounts, and vendors who change infrastructure without telling you. When those gaps line up with a weaponized exploit, the damage multiplies ,  and so do the costs.

Actionable insight: replace yearly attestation with continuous visibility for any vendor that touches sensitive systems.

Map vendor access to attacker behavior with MITRE ATT&CK

MITRE ATT&CK gives simple labels to what attackers do (how they move, what they steal). If you map a vendor’s access to these labels, you can spot which vendors let attackers perform key steps. That makes your controls more practical: not just “do a checklist,” but “stop Technique X that lets attackers move from vendor to your crown jewels”

Actionable insight: build a short ATT&CK map for each critical vendor showing which techniques they could enable ,  then close the ones with the highest payoff for attackers.

AI-driven vendor risk: what it really helps you do

AI tools now watch many signals at once: external scans, CVE feeds, attestation docs, telemetry, and even geopolitical flags. The result is a live risk score that moves when real things happen ,  a vendor goes quiet, a new zero-day appears, or a change hits production. Platforms and services in this space are already helping teams spot vendor issues faster. 

But AI isn’t magic. It needs the right inputs and checks, and humans must review high-impact alerts. Think of AI as an early-warning system that points your team to the real problems, not a replacement for judgment.

Actionable insight: run a short pilot on your top 50 vendors to compare manual findings with AI scores, then tune thresholds so you get fewer false alarms and faster response.

Tactical controls you can apply now (clear, do-able steps)

1. Inventory and tag,  make one source of truth for every vendor, with access level, data types, and criticality.
   
   
2. Short-lived access requires temporary tokens, strict API scopes, and rotation as a condition of access.
   
   
3. SBOM and patch SLAs,  ask for software bills of materials and contractual patch windows for software vendors.
   
   
4. Contract hooks,  add audit rights, incident notice timelines, and visibility into subcontractors for anything critical.
   

These are practical fixes that reduce the chance that a vendor problem becomes your crisis.

Actionable insight: Start with a policy that any vendor with production access signs an agreement for 30-day patch windows and immediate incident notice.

People, reporting, and the new operating model

Vendor risk isn’t just tech,  it’s people and process. Create a small cross-team group (security, procurement, legal, privacy) that reviews critical vendors weekly and keeps a short board-level scorecard: percent of critical vendors monitored, time to detect vendor incidents, and percent meeting SLAs.

Run vendor breach drills that simulate a supplier compromise and practice the regulatory notice steps you’d have to take. This makes real incidents less chaotic and helps you move from panic to plan.

Actionable insight: Publish a one-page vendor scorecard for executives so the board sees progress and the gaps at a glance.

Short case example: a Fortune 500 avoided a DORA hit

A large firm facing EU rules used continuous vendor scoring, ATT&CK mapping, and tightened contracts for critical providers. When a supplier’s telemetry showed odd API use, their AI flagged it, and the team cut access in hours,  not days. The firm had the evidence regulators later asked for, and the issue never reached production. This is the kind of outcome a bit of upfront work buys.

Actionable insight: You don’t need to do everything at once. Pick the vendors with the widest reach and start there.

Money talk,  why prevention pays

Think of fines and breach costs as a business decision. A single regulatory fine or big remediation bill can be many times the price of continuous vendor monitoring and faster patching. The math usually favors a modest investment in tooling, contracts, and a small team over the business risk of a major breach or regulator action. 

Actionable insight: run a simple ROI model: worst-case regulatory + breach cost vs. one-time and yearly prevention spend. You may be surprised how fast prevention pays back.

The bottom line: act now, but sensibly

Vendors are not the weak link just because you say so ,  they’re a shared responsibility. Start by cleaning your inventory, ask for SBOMs and short patch windows, add AI scoring for live warning, and keep a human in the loop to triage the real risks. Regulators want proof you are watching; attackers want the quiet vendor that never looks. Make sure you are the watching party.

Turn vendor risk into a strategic win; iRM can help

Turn Vendor Risks into Strategic Wins,  iRM's Experts Build Unbreakable Supply-Chain Defenses. Schedule a Free AI-driven Vendor Risk Audit today.