The Future of Vendor Security: 5 Trends to Watch in 2024

Since GDPR came into effect in 2018, the world has slowly shifted from perceiving cybersecurity as a mere burden that most organizations dismiss, to viewing it as a business vector that should be carefully analyzed, planned, monitored, and above all, receive managerial attention and dedicated resources.

However, the shift from the first described “mode” to the second has been gradual, especially among organizations that did not have more than a slim handful of privacy regulations to which they were obligated to adhere. In such circumstances, this shift has been too slow and only mildly affected the managerial prioritization or the allocation of resources. While the awareness of organizations toward cybersecurity escalated dramatically, its practical application is still lagging.

2024 will leave significantly fewer organizations that could still claim to have this mere handful of regulations to follow. This will derive the urgency to quickly adapt, or otherwise, be at risk of breaches or be left outside of business opportunities due to cybersecurity implementation gaps.

Continuing last year's trend of increased regulation frameworks, more regulations have been developed and published, depicting 2024 as another fruitful year in cyber and privacy guidance, with some notable themes and trends already taking shape:.

1. Regulatory Onslaught: AI and ESG Take Center Stage

To say that the cyber and vendor security regulatory landscape is expanding is a mere understatement. For one, the EU AI Act is set to control and reduce AI-associated risks within the European region, underscoring a giant leap as it becomes the world’s first comprehensive AI law.

Secondly, Third-Party Risk Management (TPRM) has increased public awareness of the Environmental, Social, and Governance (ESG) frameworks due to increasing customers' support for environmental conservation, human rights, and ethical business operations. In the next few years, companies are more likely to prioritize building relationships with suppliers who align with their internal values. However, there is still no industry-wide standard for evaluating ESG performance, despite the greater attention being paid to ESG considerations.

Other regulatory frameworks surging include DORA (Digital Operational Resilience Act), which unifies guidance for all EU members, on response and recovery from all types of ICT-related disruptions and threats; NIST’s AI RMF (Risk Management Framework) which will improve the ability to incorporate trustworthiness considerations into the design, development, use, and evaluation of AI products, services, and systems; SEC Disclosure Rules (by The Securities and Exchange Commission) which puts forward guidelines for cybersecurity risk management, governance and incident reporting by public companies (US); CMMC (Cybersecurity Maturity Model Certification) which was designed to present tiered security levels for contractors for US Government vendors, and The German Supply Chain Act (GSA) which has been drafted by the German Federal Ministry of Labor and Social Affairs (BMAS) to regulate Corporate Due Diligence Obligations in Supply Chains that are operating with connection to German entities.

2. Board Engagement: A New Paradigm for Cybersecurity and ESG

As the importance of cybersecurity continues, supervising it will no longer be exclusive to designated teams. Moving forward, boards will be more involved, covering cybersecurity measures and broader ESG aspects. Today, the connection between cybersecurity and ESG is becoming more apparent, and board members now recognize that sustainable business practices require a comprehensive strategy.

Boards must incorporate social responsibility, environmental impact, and transparency in governance into their cybersecurity plans as demand on corporations to do so grows. This all-encompassing strategy recognizes the wider influence of cybersecurity on the standing, reliability, and long-term viability of the company.

Boards now have to consider the ramifications of this paradigm change for the organization's social effect, ethical standing, and compliance with changing regulatory frameworks, in addition to the technical nuances of cybersecurity. The inclusion of ESG and cybersecurity on the board's agenda indicates that organizational risk management has matured and is now in line with wider society's expectations for security procedures.

3. Generative AI: Stakes and Emerging Risks

Generative AI increases productivity, automates documentation, and simplifies several procedures. Simply put, it is becoming a need for businesses to remain competitive as they incorporate it into their operations more and more. However, this integration has its own set of concerns, some of which have long existed but continuously remain as pressing issues.

The autonomous generation of information, designs, and innovations by Generative AI systems raises concerns regarding intellectual property (IP). Protecting confidential data becomes crucial, necessitating the implementation of strong safeguards by enterprises to preserve their intellectual property.

When massive volumes of sensitive data are processed by Generative AI systems, data integrity becomes even more important. As a result, ensuring the security and privacy of this data becomes an insurmountable task, requiring more extensive encryption, access controls, and monitoring systems.

The risks associated with Generative AI aren’t brand new. However, the scale and complexity of AI-driven systems demand a more vigilant culture for organizations to proactively address these challenges. Through this, the full potential of Generative AI can be unlocked without compromising company data.

4. Persistent Threat: Data Breaches and Ecosystem Impact

Make no mistake: data breaches will always be present despite advancements in cybersecurity. Even the biggest companies, frequently regarded as security heavyweights, haven’t gotten their immunity badge yet. As a result, repercussions impacting the whole ecosystem will likely continue as corporate activities are interdependent.

We’ve seen some of the biggest data breaches last year alone. In March 2023, the ChatGPT breach led to the data exposure of 1.2% of subscribers. It contained the last four credit card digits, the expiration date, the email address, the payment address, and the first and last names of the current user. Other breaches that came months later include the MOVEit, JumpCloud, and T-Mobile, just to name a few.

This pattern is unlikely to change in 2024 as threat actors evolve alongside the advancement of cybersecurity tools. The ongoing occurrence of data breaches emphasizes the necessity of continuous watchfulness, flexible security tactics, and industry-wide cooperation to strengthen the group's defense against cyberattacks.

Establishing effective incident response and recovery procedures must take precedence over only preventing breaches for organizations. Just as important as preventing a breach in the first place is the capacity to quickly and efficiently lessen its effects. Nowadays, cybersecurity is a strategic necessity for preserving stakeholder confidence and protecting organizational resilience, not only a defensive tactic.

5. Rise of BISO: Bridging Business and Security

A notable development in the organizational hierarchy is the rise of the Business Information Security Officer (BISO). This role serves as a bridge between business strategy and cybersecurity, acknowledging the intrinsic link between these two domains. The BISO is tasked with aligning security objectives with broader business goals, ensuring that cybersecurity measures contribute to, rather than hinder, organizational success.

As vendor security becomes a core component of corporate strategy, the BISO is essential in helping the board, executive leadership, and the cybersecurity team communicate with each other. This integration ensures that organizational goals are smoothly integrated into security activities, rather than being isolated from the larger business strategy.

The duties of the BISO go beyond technical proficiency to encompass a thorough comprehension of business operations, risk tolerance, and regulatory environment. Organizations can take proactive actions to address cybersecurity issues and leverage security measures as drivers of business resilience and innovation when they are strategically aligned.

Conclusion

The arrival of AI in cybersecurity represents a generational opportunity, one that must be approached with both vigilance and responsible stewardship. This era is unparalleled in its readiness to harness such a technological leap. Whether it is protecting against ongoing data breaches,, increased and active board participation, legal developments, or the rise of the BISO role, all these aspects can be supported, guided, and infrastructurally supported by Generative AI to ensure a more robust company posture to Vendor Security and TPRM as a whole.

Indeed, TPRM has long been recognized as a formidable logistical challenge awaiting a solution within the technological domain. It is time we leverage the sophisticated technology at our disposal to address this challenge effectively, ushering in a new era of robust and resilient cybersecurity infrastructure.