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Is Your Supply Chain Your Biggest Cybersecurity Risk? Here’s What Every SMB Needs to Know

Cybersecurity is one of the top priorities for business owners. Regardless of size and niche, if a data breach hits a business, the situation can quickly get dire. However, the small guys (small and medium-sized businesses or SMBs) have the most to lose.

In addition to losing customers, SMBs face steep fines (which most can’t afford) and a loss of reputation, which will impact the business moving forward. But what happens when the leak is not due to a lack of cybersecurity measures within your company?

Even when you have all your ducks in a row from a cybersecurity standpoint, your suppliers and business partners may not be as thorough. This is why the supply chain is quite delicate, making it a very inviting target for many ill-intended actors.

According to recent data, 98% of companies have been negatively impacted by a breach in their network. This is why it’s crucial to vet all the links that are part of your supply chain, from direct suppliers to developers of the software tools you’re using.

Third-party Cybersecurity Vulnerabilities in Your Supply Chain

The most obvious third-party vulnerability comes from business partners, suppliers, and service providers. To do business, you have to share sensitive information with other companies, and if their defences are breached, your data is also in danger.

There are countless examples of companies losing customers’ data because a third party’s cybersecurity wasn’t strong enough. Here are a few note-worthy mentions:

The Good Guys Attack

The reputation of the Australian retailer The Good Guys was impacted when one of their business collaborators (My Rewards) was hacked, and their database was breached.

Due to the nature of tier collaboration, My Rewards had a wide range of The Good Guys customers’ information, such as addresses, names, email addresses, phone numbers, and more. These data and data of other companies were all leaked, so even if only one link in the chain was breached, many other businesses were impacted.

The SolarWinds Hack

This operation involved a sophisticated supply chain attack where hackers compromised the Orion software used by thousands of organisations.

The attackers inserted malicious code, enabling them to spy on and steal data from high-profile targets, including U.S. government agencies and major corporations. This breach highlighted vulnerabilities in software supply chains and emphasised the need for robust cybersecurity measures.

Insula Group Ransomware Attack

One of the most recent supply chain attacks happened in July of this year and targeted the IT services supplier Insula. They were hit with a ransomware attack, and since they refused to pay, the incident ended with a leak of around 400 gigabytes of data.

While there are no details (yet) on who was impacted, if we take into account the fact that the Insula Group’s offer includes software products and IT services, it’s easy to imagine the potential for damage.

So, what’s the deal behind supply chain attacks? Why are so many companies, through no fault of their own, pulled into the whirlwind of another business’s data breach?

Supply chains are vulnerable because they involve various external parties, from vendors and partners to the software solutions a business uses.

Let’s take the supply chain of a coffee shop.

First, you have the suppliers (coffee beans, dairy and milk alternatives, bakery items, ingredients, non-food items, and so on). These, in turn, rely on other suppliers.

Then, you have the logistics like transportation and storage – the delivery companies and warehouses will store some of the company data.

Additionally, the coffee shop will most likely use an online inventory management solution, will offer online payment options, and will use a variety of hardware and software components to keep the business running smoothly.

All these are part of the supply chain and are potential threats to the coffee shop’s cybersecurity.

Keep Your Supply Chain Strong

The best way to make sure your supply chain is strong is to vet all your suppliers and service providers and only work with the ones that value their data security and that of their business partners.

To do this, check each possible supplier and provider’s level of security certification (if they have any). For instance, larger organisations usually have ISO 27001 or similar, which is quite straightforward.

However, things get a bit trickier when working with SMBs since many will say they follow the Essential Eight but have no certification to prove it. To be safe, it’s best to prioritise working with SMBs with SMB1001 Gold certification. This level of certification is not too difficult to achieve and takes care of some of the basic security issues smaller businesses tend to have.

Also, keep in mind that this is a two-way street: if your business is breached, you can endanger the reputation and good operation of your partners, service providers, and suppliers. So, the best thing you can do for your safety and the safety of your network is to achieve SMB100 Gold certification (if you haven’t already).