Third-Party Risks: Top 5 Risks in Your Supply Chain

In the modern business world, collaboration between companies is inevitable, but these connections can create unintended risks. Whether you are a NIS2-covered company or not, it is crucial to understand and address the risks of third parties in your supply chain.

In the modern business world, collaboration between companies is inevitable, but these connections can create unintended risks. Whether you are a NIS2-covered company or not, it is crucial to understand and address the risks of third parties in your supply chain. In this blog, we will have a closer look at the top 5 risks posed by third-party suppliers, highlighting both the perspective of NIS2-compliant companies and that of non-submissive companies that are connected.

1. Cybersecurity Risk: Protect Your Digital Secrets

A compromised third party can lead to a cyberattack resulting in data loss. NIS2-compliant companies should carry out due diligence before onboarding new suppliers, while non-under-healthy companies should ensure they meet the same security standards in their connections.

2. Operational Risk: Maintain Continuity in Your Business

A third party can cause unexpected interruptions in your business operations. By establishing clear service-level agreements and having backup options, both NIS2-compliant and non-subordinate businesses can minimise the impact of operational risks.

3. Compliance Risk: Keeping to the Rules

For NIS2-compliant companies, compliance with regulations such as the GDPR is crucial. However, even non-subordinate companies should ensure that their partners comply with relevant regulations to avoid legal problems caused by third-party risks.

4. Reputational Risk: Guard Your Image

Third-party risks can have a negative impact on your company’s image. Poor security controls can lead to data breaches, resulting in reputational damage. Both types of companies should ensure that connections do not pose a risk to their good name.

5. Financial Risk: Protect Your Results

The failure of a third party can have financial consequences. Both NIS2-compliant and non-subordinate companies should assess whether the connections make a positive contribution to their financial health vis-a-vis third-party risks.

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