Your tech stack is a house of cards built by strangers. That payment processor everyone swears by; the analytics thing your team can’t live without; that productivity suite supposedly making everyone way more efficient—each one is a door you’ve left open to third-party vendors while strangers walk through, and the strangers brought their friends, and their friends have questionable security habits.
The average company uses over a hundred third-party vendor tools. Probably way more, because nobody tracks the random stuff people sign up for. Each connection is basically a deal with some company you don’t know. They run stuff you can’t see on computers you don’t control. This whole setup falls apart regularly. Vendor breaches keep happening because of exactly this kind of setup.
Table of contents
When Third-Party Vendor Paradise Went Wrong
Remember when working with other companies was simple? You’d evaluate them, check their security paperwork (if you were feeling diligent), maybe run them through legal, and call it a day. Those were adorable times.
Today’s reality is running a nightclub where every guest brings whoever they want. That basic customer management system? It talks to tons of other services. Your marketing software connects to data sellers. Those connect to analytics tools. Those share with platforms you’ve never heard of. It’s connections all the way down, and basically every connection is another attack vector.
That big vendor breach everyone talks about should have been everyone’s wake-up call. One vendor gets compromised, tons of customers get hit. These vendor attacks don’t knock on your front door—they walk right through the company you trusted with your keys. But here’s what most security teams won’t say: we’re playing catch-up while attackers use vendor relationships. They exploit connections we haven’t mapped. They skip around our quarterly checks.
Traditional vendor checks are just like checking references—kind of useful at first, but pretty worthless for tracking ongoing issues. Those questionnaires you filled out months ago? Already outdated. New hires, new dependencies, new vulnerabilities appear constantly. Their annual security test results show what happened in one week. The other weeks remain untested.
Risk Scoring: Where Math Meets Reality
The industry keeps throwing risk scores at everything like they’re protection spells. Vendor scores in the eighties? Green light! Drops to the seventies? Red alert!
Scoring third-party risk is like grading a chemistry experiment while it’s still bubbling, the instructions are in another language, and someone keeps adding new chemicals when you’re not looking. Everything changes constantly, reactions happen that nobody predicted, and that weird smell is normal one day and a disaster the next—but the score shows the same number, and the vendor says everything’s fine.
Smart organizations figured out that fixed scores don’t work—risk changes faster than quarterly reviews happen, and by the time you update the spreadsheet, new problems have already popped up. Watching things constantly, tracking vendor behavior while dealing with false alarms, and understanding that risk shifts with every update, change, or new hire—that’s what works, if you have endless time and patience.
What works is watching everything all the time, kind of like credit monitoring but way more intense. You collect info from everywhere, track patterns, gather warnings, and watch for changes. That vendor who’s been fine for years shows weird network stuff. That’s concerning, though it’s often just their new setup, which you figure out after freaking out.
The marketplace situation is a mess. App marketplaces—the Salesforce store, Microsoft’s add-ons, Google’s marketplace—they’re basically free-for-alls where good vendors sit next to terrible ones. The platforms check if things work, but security? That’s mostly hoping for the best.
The Money Part Nobody Likes
Let’s talk money, because CFOs hate surprise security expenses. Third-party risk management used to be one line in the budget. Now it’s this whole thing with subscriptions, monitoring services, and enough tools to make your infrastructure team cry.
But here’s the math that actually matters: third-party breaches cost more than direct attacks now. Not because vendors are terrible at security, but when they fall, they take down multiple customers at once. It’s the difference between your house getting hit and your whole neighborhood getting robbed because someone compromised the security company.
Organizations that get this are building something like immune systems for all their vendors. They’re not just ticking boxes on a saas security checklist anymore—they’re creating frameworks that actually evolve as threats change. They watch how vendors behave over time. Good teams spot vendor problems early—the rest find out when their name shows up in breach notices.
The business case becomes obvious after competitors get hit through vendor problems, though somehow executives still need tons of presentations and a crisis before they’ll pay for proper monitoring. Vendor monitoring stops being paranoid and becomes basic risk management. You need it, and you’ll use it.
Building Something That Actually Works
Forget the third-party vendor pitches about amazing new risk tools—they’re selling you old controls with new screens while actual threats have already moved past what they can catch. Here’s what organizations doing this right actually care about:
Mixing all these warning signs together is where stuff happens, turning different red flags into something you can work with. You grab whatever info you can find—ratings, old incidents, weird mentions online, outdated paperwork, basically anything that looks useful. It’s detective work using fragments and rumors because that’s what’s available.
Tracking how vendors normally act becomes your whole thing, except “normal” keeps changing with updates, buyouts, or developers messing around on live systems. That vendor who patches fast one month takes forever the next. Problem. The data stuff that normally handles reasonable amounts one day floods you with requests the next. Yeah, someone should check that out. It’s basically spotting trends in business relationships.
The automation thing is complicated. You can’t manually check tons of vendors constantly without hiring loads of people, and even then, they’d spend time looking at meaningless stuff while missing what actually matters. Full automation blocks important vendors when ratings drop over forgotten paperwork. The vendor who just hired developers from restricted places? They keep running normally because that’s not tracked. There’s a balance somewhere between doing everything manually and letting computers handle it all, but finding it takes work, politics, and usually some kind of near-disaster to convince management.
How deep these connections go matters more than most people realize—reading public info isn’t a huge deal, but once you start talking about full data access, that’s when paranoia becomes justified. The connections with full access to your customer data? Those are what keep security teams awake at night, stress-eating and rebuilding everything to trust nothing while knowing full well the business won’t survive without these exact connections.
What’s Happening Now
Third-party vendor risk checks happen as routinely as credit checks now. Credit scores have decades of data and proven methods though. Vendor scoring is educated guessing with fancy screens. Every new connection comes with paperwork now, though calling them “warnings” assumes anyone reads them or that they’re more than legal coverage. Contracts have these kill switches now that cut off vendors when things get weird. Half the time they trigger for dumb reasons like expired certificates. Real problems slip through because lawyers wrote the rules, not security people. Insurance companies price based on how risky all your vendors look together, which sounds reasonable until you realize their models barely understand single companies, let alone all the connected stuff.
The organizations making it aren’t the ones with the fewest connections—that’s competing using stone tools. They’re the ones using third-party tools while maintaining visibility. You can’t avoid risk completely—you just work with what’s there and maintain response capabilities.
They blow up regularly. The last few years proved that supply chain attacks aren’t edge cases—they’re Tuesday. One of your third-party vendors has problems right now. The only question is whether you know about it yet.
