Page 24 - Cyber Defense eMagazine February 2024

Vendors Beware of the Cybersecurity Audit

By Caroline McCaffery, Co-founder and CEO of ClearOPS

1. Introduction to Vendor Management

Why does every license agreement and data protection addendum, suddenly, include a right for the
buyer to perform a security audit on the vendor? Because in recent years, the number of vendors causing
a security incident to their customer has increased. This, in turn, led to a number of regulations imposing
new vendor management requirements.

Alarmingly, a substantial 54% of businesses fail to adequately diligence their third-party vendors. And
yet 98% of businesses have at least one vendor that has suffered a security breach.
Source: https://www.resmo.com/blog/third-party-data-breach-statistics

The financial implications of breaches are significant with the average cost of a data breach rising to
$4.35 million globally, and even higher in the United States. The cost is so high that 60% of SMBs shut
down within six months of a data breach. (Security Intelligence, 2021)

Cyber Defense eMagazine – February 2024 Edition 24
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