Beyond Traditional Vendor Management: Navigating AI Risks in the Supply Chain
Cybersecurity is undergoing a fundamental transformation as artificial intelligence becomes more prevalent in our systems. There are many ways in which AI is increasing risk, extending beyond third parties to affect all aspects of our security programs. For third-party risk management specifically, we are seeing these risks increase due to several factors.
Most importantly, vendors themselves are rapidly integrating AI into their products and services, introducing subtle vulnerabilities that may not be immediately apparent or well-understood.
Data-sharing risks inherent in AI systems are also a growing concern. Many vendors share or process sensitive data to train AI models, and poor security practices can expose this data to breaches.
Collectively, these threats represent a new dimension of software supply chain risk that calls for a more dynamic approach to security. With threats evolving at lightning speed, traditional annual security reviews are no longer sufficient to protect against these emerging AI risks.
Thoroughly Assessing Vendors
Vendor due diligence is critical to mitigating potential risk before you enter into any partnership agreement. There are a few areas to think about when querying prospects.
- AI Implementation and Data Usage: At the start of the vendor relationship, it’s critical to understand how AI is used within their product and whether they train their models using customer data. This helps establish the boundaries of how your organization’s data might be utilized and potentially exposed.
- Model Architecture and Data Handling: Look under the hood at the AI architecture to understand how the models actually work. For example, “What type of model architecture is being used?” and “Where is sensitive data stored?” Also, questions like “How long is user data retained?” and “What security measures protect stored data?” can help determine data storage and retrieval practices. Knowing how the models handle data can reveal potential vulnerabilities before they become problems in your environment.
- Model Development and Security: Additional scrutiny is required for vendors building their own models. Organizations will want to know how the prospective vendor is ensuring that the models are free from vulnerabilities and understand how those models are built. This insight into their development practices can reveal potential security weaknesses or strengths in their approach.
- Incident Response Protocols: Clarify how quickly you will be notified and how much information they will provide during a security incident. This knowledge is essential for integrating the vendor’s response capabilities with your own security protocols.
How to Build Vendor Transparency
While achieving full transparency between buyers and vendors will take time to develop, organizations can take immediate steps to improve engagement:
- Establish direct communication channels with vendor security teams and align incident response procedures.
- Conduct joint incident response simulations through tabletop exercises to ensure preparedness.
Moving Beyond Standard Vendor Management
Organizations must adopt additional measures to effectively mitigate software supply chain threats. Based on experience and industry best practices, two critical strategies come to mind as essential components of a comprehensive security approach.
First, implement continuous monitoring rather than relying on annual assessments. This means having real-time visibility into vendor security posture, with automated alerts for control failures or breaches at vendor sites. You need immediate notification when security incidents occur.
Second, understand and monitor the controls that matter most for your specific vendor relationships. For example, if you’re working with a cloud service provider, this might include ensuring that multi-factor authentication (MFA) is enabled for all accounts or that data encryption is properly configured for both data at rest and in transit.
Similarly, for vendors handling sensitive customer information, you might need to verify that access controls are in place to restrict access to authorized personnel only and that audit logs are enabled to track all activity. This includes maintaining visibility into required security configurations and verifying these controls are properly implemented in your environment. Having automated checks to confirm these settings remain in place is essential.
The Future of Vendor Risk Management
The ideal solution to third-party risk management is implementing a centralized Third-Party Risk Management (TPRM) platform that can unite all critical functions under one roof.
Such platforms provide real-time visibility into your vendor ecosystem. They perform continuous, automated risk assessments, evaluating vendor security postures against predefined criteria. Collaborative workflows enable teams to work directly with vendors through shared dashboards and communication tools, while automated reporting provides clear insights into vendor compliance and performance metrics.
Organizations that adopt these comprehensive monitoring solutions will be better positioned to navigate the complexities of vendor risk. The future of strong vendor risk management is about building collaborative and transparent relationships with vendors to help identify and mitigate the most important risks for your organization.
