The Rise of Third-Party Cyber Breaches and How to Reduce Your Organization’s Exposure

A third-party cyber breach occurs when a company is compromised through one of its external vendors, partners, contractors, or service providers, rather than through a direct attack on its own systems.  

 

• Cloud and SaaS platform providers 
• IT service providers and managed service providers (MSPs) 
• Payroll, HR, and other operational vendors 
• Customer service, marketing, and analytics platforms 

A breach through a third party is particularly attractive for bad actors because it can be just as damaging for organizations, or even worse because: 

The growth in third-party cyber incidents is not coincidental. It reflects how modern organizations operate today. Several structural factors are driving this trend. 

1. Organizations Are More Dependent on Vendors Than Ever 

Every business function now relies on external platforms, from finance and HR to customer service, sales, and supply chain operations. While SaaS adoption has delivered enormous efficiency gains, it has also significantly expanded the attack surface beyond internal IT environments. 

2. Vendors Often Have Excessive or Persistent Access 

To operate effectively, vendors frequently require access to internal systems, data, or credentials. Once attackers compromise a vendor, they can often move laterally into client environments with little resistance—sometimes without triggering immediate alerts. 

Several high-profile breaches in 2025 followed this exact pattern. 

3. Vendors Are Prime Targets for Social Engineering 

Attackers increasingly recognize that breaching a vendor employee is often easier than penetrating the defenses of a large enterprise. A single successful compromise can provide access to multiple organizations, offering a high return on investment for threat actors. 

4. Internal Teams Aren’t Sharing Risk-Critical Information 

Third-party cyber risk is often treated as an IT issue, yet many of the most important controls sit with Compliance, Legal, Procurement, and Risk teams. These groups manage contracts, due diligence, SLAs, data-handling obligations, and monitoring requirements. 

When this information is fragmented across teams, no one has a complete view of vendor risk. During an incident, this lack of shared visibility can delay detection and response—allowing breaches to escalate unnoticed. 

5. Lack of Continuous Monitoring  

Many organizations conduct vendor risk assessments only during onboarding. But vendors don’t remain static over time. They may: 

Without continuous monitoring, early warning signs are easily missed. 

While third-party cyber breaches are increasing, they are not inevitable. Organizations can take practical steps to reduce exposure and improve resilience. 

 

Cybersecurity expectations should be embedded into vendor agreements from the outset. Contracts should require suppliers to meet defined security standards, report incidents promptly, undergo audits, follow strict data-protection practices, and maintain appropriate cyber insurance. 

Security must be treated as a core component of the commercial relationship—not an afterthought. 

Employees interact with vendors daily, making them frequent targets for social engineering. Regular training should help staff recognize vendor impersonation attempts, spoofed SaaS login pages, fraudulent support requests, and fake invoices or contract amendments.

 

Awareness remains one of the most effective controls. 

Annual questionnaires alone are no longer sufficient. Organizations need ongoing visibility into vendor security posture, vulnerabilities, infrastructure changes, and emerging risks. 

Continuous monitoring enables earlier detection, faster response, and more informed decision-making across the vendor lifecycle. 

Summary