Businesses today are more interconnected. From cloud service providers to contractors, they rely on third-party vendors and external users to operate.
However, the growing dependence leads to unauthorized access to systems or networks and data leaks from poorly managed vendor credentials.
So, how do businesses collaborate securely without compromising their systems?
Third-party access management helps businesses control and monitor external access with proper security. Let’s discuss each of the following
- Why third-party access security is important
- Risks associated with third-party access
- Best practices to securely manage third-party access
- Technologies and tools that improve security
Let’s get started.
Third-party access management refers to controlling and monitoring how external users like vendors or contractors interact with the company’s systems and data. The process ensures that whether it is a vendor or a service provider, they have only the required access to conduct their tasks without exposing important assets to security risks.
It is not the same as traditional Identity and Access Management (IAM) which focuses more on internal employees, it is something that handles privileged access of external users. It is a security framework that implements strict security measures like privileged access management and the principle of least privilege to reduce the chances of security vulnerabilities.
Which Industry Requires Third-Party Access Management and Why?
Different industries have different operations, which makes some of the industries vulnerable to third-party risks. Here is why is it important to manage third-party access for different sectors:
- Finance and Banking require strict controls to protect customer data from unwanted access.
- Healthcare organizations must secure patient records and comply with data protection regulations like HIPAA.
- IT and Cloud Services are required to manage vendor access to sensitive infrastructure and prevent unauthorized data exposure.
- Retail and eCommerce businesses must prevent security breaches that can occur with third-party integrations.
- Manufacturing and Supply Chain industries require strict security measures to protect operational technology from external threats.
Third-party access security is something that is no longer optional with businesses becoming interconnected. It has become a necessity to reduce the likelihood of data breaches and operational disruptions.
Picture this: You are giving the contractor a permanent key to your office and never tracking their movements. Sounds risky, right? This is what happens when businesses grant unchecked access to external vendors and contractors.
A poorly managed third-party access system is like leaving multiple doors open in a building. You don’t know who is coming in or what are they doing inside the building. So, let’s help you know why is TPAM important:
1. Prevents Data Breaches and Cyber Threats
Third parties are likely to access internal systems, but they become security vulnerabilities without appropriate access controls. Attackers exploit weak vendor credentials or outdated access permissions to breach networks. TPAM reduces such risks by implementing time-limited access and constant monitoring.
Check out how Securden makes it easy for you to manage third-party access:
- Provides granular access controls that give vendors access only to specific applications or systems. Benefit? Reduces attack surfaces.
- Offers zero-trust security where every session is verified and monitored to prevent unauthorized access.
- Detects and blocks suspicious activities before they lead to breaches with the help of session management & real-time alerts.
2. Ensures Compliance With Regulations
Regulatory bodies like GDPR, HIPAA, and PCI-DSS require businesses to secure external access. Companies face compliance violations and financial penalties without appropriate controls. What TPAM does is it ensures vendors only access permitted systems and applies security measures like multi-factor authentication. With such a structured approach, businesses easily meet compliance requirement without any gaps.
3. Reduces Operational Risks from External Vendors
In some cases, third parties retain unnecessary access to systems. A misconfigured system or accidental data deletion can disrupt business operations. With TPAM, this risk is minimized by applying the principle of least privilege to ensure vendors only get required access. This also reduces the chances of human errors and prevents unintentional security incidents.
4. Enhances Visibility and Control Over Third-party Activities
Several businesses find it difficult to track what third parties perform when provided access. Unmonitored sessions and old credentials create security blind spots. Managing third-party access provides monitoring and detailed logs along with instant alerts on unusual behavior. This visibility allows businesses to detect risks beforehand and maintain a good level of control over external users.
When it comes to visibility and control, choosing solutions like Securden is a better move. You can easily track vendor activities with the ability to pause or terminate sessions. You can maintain a full history of the activities carried out by the service provider. Also, you can prevent unauthorized logins, even if the vendor credentials are compromised.
5. Strengthens Overall Business Security Posture
Basic entry points for cyberattacks include weak vendor security practices and long-standing permission. Attackers target third-party connections to move into the company’s internal systems and networks. TPAM makes it easier to mitigate these risks by using authentication controls and automating access reviews. Such solid protection makes businesses maintain a strong security posture when dealing with external vendors.
Here is the step-by-step process of how to implement third-party access management.
Step 1. Assess and Classify Third-party Risk
Not all third parties pose the same level of risk. Also, treating them equally leads to unnecessary security vulnerabilities. For example, a software vendor that requires API access has different risks when compared to a financial auditor with database access. Businesses need to classify third parties based on:
- Access Scope: Identify which systems or data is required.
- Risk Level: Determine the sensitivity of the information they interact with.
- Compliance Needs: Assess whether they meet required security standards.
Segmenting third parties allows businesses to manage their access control based on their roles. This minimizes unwanted exposure to systems and also reduces security risks.
Step 2. Define Strict Access Control Policies
Security breaches tend to occur when third parties are granted excessive access rights. Defining strict policies ensures that access is limited to what is necessary. Here is what businesses do to prevent unauthorized access:
- Follow the Principle of Least Privilege by granting only the minimum access required.
- Use Role-Based Access Control (RBAC) to determine permissions as per the job functions.
- Implement Time-Limited Access for temporary vendors to prevent lingering permissions.
- Monitor Privileged Access by tracking interactions with systems.
Implementing such policies makes businesses ensure third parties do not have unnecessary access to the data or network.
Step 3. Implement Multi-Factor Authentication & Zero-Trust Security
Weak credentials are alarms to security risks. Attackers easily exploit a third party’s password, if it is compromised. What you should take care of? Ensure your strong authentication framework includes:
- Multi-Factor Authentication (MFA): Adds an extra layer of protection by demanding additional identity verification.
- Zero-Trust Security Model: Verify each request based on user identity, device, and behavior.
- Privileged Access Management (PAM): Secure privileged accounts and restrict admin-level permissions.
- IP and Location Restrictions: Limit access to specific geographic locations or networks.
- Session-Based Authentication: Automatically log out users after a defined period of inactivity.
Step 4. Monitor and Log Third-party Activities Continuously
Once access is granted, ongoing monitoring needs to be carried out to detect suspicious activity. Many data breaches go undetected for months the reason behind this is the lack of visibility into third-party actions. Strengthen your monitoring by:
- Enabling real-time alerts for unusual activities like failed login attempts or access from unknown locations.
- Using behavioral analytics to identify anomalies based on past usage patterns.
- Maintaining audit logs to track every action performed by third parties.
If a third party suddenly accesses data at odd hours or downloads an unusual volume of files, automated alerts notify security teams immediately.
Step 5. Regularly Audit and Revoke Unnecessary Access
Access requirements change with time, yet many businesses fail to reassess third-party permissions, which creates hidden security risks. Vendors unintentionally become entry points for cyber threats if vendors retain access beyond their requirements.
To prevent this, businesses must conduct routine audits to evaluate who has access and why they have it. If an external party no longer requires access, it should be immediately withdrawn to minimize risk.
Automated tools simplify access reviews by flagging inactive or old accounts that are not used in a better way. Businesses must identify unused or old credentials and ensure compliance with security protocols. This proactive approach reduces security gaps without troubling IT teams.
Step 6. Use Governance Frameworks for Compliance
Industries like finance and IT must comply with strict security regulations. These regulations include ISO 27001, SOC 2, NIST, and GDPR. Not meeting such standards leads to legal penalties and reputational damage so this step is the most important one.
Here, businesses must integrate security frameworks into their third-party access strategy to ensure compliance. This includes implementing least privilege access and maintaining real-time access logs.
You must also know that detailed documentation is equally important. Having a practice of keeping an audit trail of third-party activities assists companies in showing compliance during regulatory assessments. Also, businesses must provide periodic compliance training to internal teams as well as external partners. This approach best practices and reduces the chances of policy violations.
Here are the best practices you should consider when managing third-party access.
1. Vet and Onboard Third Parties Securely
Make sure to assess third parties for security compliance and data protection policies before you grant access to them. Also, establish clear security agreements and ensure they are aligned with your internal access policies. A detailed vetting process reduces risks from unreliable vendors.
2. Grant Access Only When Necessary (JIT Access)
Rather than providing constant access, use Just-in-Time (JIT) access to grant third-party access only when necessary. This approach reduces the risk associated with unauthorized access. Also, it ensures that third parties do not retain unnecessary privileges outside of their required time frame.
3. Automate Access Reviews and Revocations
You know how inefficient and risky to manually track third-party access. Implementing an automated tool makes this easier for you to regularly audit access privileges and flag outdated permission, along with revoking unwanted access. With this, maintaining the principle of least privilege and preventing security loopholes is possible.
4. Use Zero-Trust Principles for Third-party Access
No third party should be trusted by default. You must implement strict authentication controls like Multi-Factor Authentication (MFA) and network segmentation. Restrict access based on role-based policies to limit exposure to sensitive data and systems.
5. Educate External Users on Security Protocols
Even if you are equipped with strong access control, the chances of human errors are still there. You need to provide ongoing security training to third-party users on phishing threats and credential management. If the user base is well-informed, the chances of accidental breaches are reduced.
Third-party access exposes businesses to security risks only if it is not properly managed. Let’s understand why is third-party access a security risk.
- Over-Privilege: Many third parties receive more permissions than necessary which increases the chances of data leaks and unauthorized system access.
- Unauthorized Access: Insufficient authentication and security gaps allow attackers to exploit third-party accounts and gain access to internal systems.
- Delayed Access Revocation: Not being able to revoke access when a third-party contract ends leaves inactive accounts vulnerable to misuse.
- Shared Credentials: Third-party teams share login details which makes it difficult to track usage and increases the risk of credential theft.
Let’s check out some real-world consequences that occurred due to weak third-party access control.
Case Studies of Third-Party Breaches
Here is a detailed overview of the top third-party breaches.
- National Public Data Breach (2024)
2.9 billion records were exposed in the national public data breach. This included Social Security Numbers (SSNs), names, addresses, and phone numbers.
The breach occurred in December 2023 and was exploited further in April 2024. The hackers sold all the data on the dark web for $3.5 million. The incident led to class-action lawsuits and the company filing for bankruptcy.
- FBCS Data Breach (2024)
Approximately 4.2 million individuals were affected.
Sensitive information such as Social Security Numbers (SSNs) and birth dates was compromised in a breach initially reported to affect 1.9 million people but later revised to include more victims.
- Topgolf Callaway Data Breach (2023)
Over 1 million customers were affected.
Customer data like names, emails, and passwords was stolen in the breach. It was confirmed through a notification to the Maine Attorney General’s office. The incident also disrupted eCommerce services across multiple Callaway brands.
Third-party access management is not just about compliance but it also impacts your company’s security and operational integrity. A single vulnerability in external access leads to data breaches and reputational damage. To build a secure environment, businesses need to adopt a better approach by:
- Implementing strict access policies to prevent unauthorized activities.
- Using modern security technologies like Zero Trust and AI-driven monitoring.
- Assessing third-party risks regularly to ensure ongoing compliance and security.
Such a structured third-party access management strategy helps businesses improve security and reduce operational risks. The right approach always protects your data and strengthens trust with vendors and customers.
