Explore 5 third-party risk examples, from vendor data breaches to supply chain attacks and learn how third-party risk management can prevent cyberattacks.

Key Takeaways

• Static vendor checks fall short: Traditional, point-in-time third-party risk management practices (e.g. annual questionnaires) leave organizations blind to emerging vendor threats between audits. Continuous monitoring is now a must.


• Five common risk scenarios: Supply chain attacks, widespread software vulnerabilities, hidden fourth-party dependencies, vendor credential theft, and vendor instability each illustrate how “trusting” vendors can lead to breaches or business disruptions.


• Intelligence-driven defense: Recorded Future’s platform provides real-time visibility into your vendor ecosystem—from dark web credential leaks to fourth-party relationships—enabling proactive mitigation before incidents impact your organization.


• From trust to verification: The solution is to move from static trust to continuous verification. By continuously assessing vendors’ cyber and business health (and even integrating intelligence into workflows like ServiceNow), security leaders can vastly strengthen their vendor risk management framework.

Your Vendor Ecosystem Is a Black Box: It’s Time to Turn on the Lights

For CISOs and risk leaders, the attack surface now goes far beyond the footprint of the business. It’s a sprawling web of SaaS vendors, software suppliers, MSPs, payment processors, logistics partners, and niche fourth parties your vendors rely on. Every connection expands risk—often outside direct visibility. In other words, your security may only be as strong as your weakest vendor or partner.

Traditional third-party risk management (TPRM)—static security questionnaires and annual audits—cannot keep pace. They describe what a vendor claimed their security looked like months ago, not what it is right now. Meanwhile, the most damaging events (supply chain attacks, zero-day exploitation, credential resale, concentration failures) unfold in hours and days, not quarters.

This gap between point-in-time paperwork and real-time risk is why third-party exposure has become a primary vector for catastrophic breaches and business outages.

This article will highlight and analyze 5 real-world third-party risk examples. For each, we'll show why traditional methods fail and how continuous, real-time third-party risk management and threat intelligence is the only effective prevention.

5 Third-Party Risk Examples and How to Prevent Them

Modern vendor risk comes in many forms. Let’s explore five common scenarios—and how proactive measures can stop them:

Type 1: The Software Supply Chain Attack

The Scenario: One of the most damaging third-party risks is a software supply chain attack. This occurs when threat actors breach a trusted software vendor’s development environment and secretly inject malicious code into a legitimate, digitally signed software update. The tainted update, a “Trojan horse,” is then distributed to the vendor’s customers, giving the attacker access into thousands of networks at once.

Real-World Example: The SolarWinds Orion breach is a quintessential case. In 2020, nation-state hackers compromised SolarWinds’ build pipeline and inserted malware into an Orion software update. The malicious update, being validly signed, was pushed to around 18,000 customers, including numerous government agencies and Fortune 500 companies, who all gladly installed it, thereby granting the attackers insider access to their systems.

Why Traditional Methods Fail: A standard vendor security questionnaire or audit would never have caught this. SolarWinds had passed assessments and appeared reputable. The update itself was digitally signed and appeared “trusted” to antivirus scanners and other controls. In short, you cannot audit your way out of a risk that’s been inserted into a trusted product’s software supply chain.

The Intelligence-Led Solution: Preventing a supply chain attack means detecting subtle warning signs before the breach fully unfolds. Recorded Future’s platform continuously monitors for early indicators tied to your vendors. If threat actors known for targeting CI/CD pipelines start discussing or probing one of your software vendors, you’d know. If intelligence suggests a vendor’s code-signing certificate may be compromised, you’d get an alert. Armed with this foresight, you could elevate that vendor’s risk status, scrutinize their software updates more closely, and even hunt for indicators of compromise in your environment before the breach becomes public knowledge.

Type 2: The Widespread Third-Party Vulnerability

The Scenario: A critical software vulnerability (often a zero-day) is discovered in a common component that many of your vendors use. It could be an open-source library, a popular IT tool, or a cloud service. You have no direct visibility that your suppliers rely on this component. Attackers quickly develop an exploit and start compromising organizations at scale via this flaw, long before most victims even realize they’re exposed through their third parties.

Real-World Example: The MOVEit Transfer zero-day (exploited by the Cl0p ransomware group) and the Log4j “Log4Shell” vulnerability are perfect examples of this risk. In the case of MOVEit, a single bug in a widely used file-transfer product led to the mass theft of data from thousands of companies, many of whom weren’t even direct customers of MOVEit, but their vendors were. Similarly, the Log4j flaw impacted countless businesses indirectly because software used by their contractors and providers included the vulnerable library.

Why Traditional Methods Fail: This is fundamentally a technology visibility problem. A point-in-time survey asking your vendors “Do you use MOVEit?” is too little, too late. By the time you send out a questionnaire and get a reply (if you get one at all), attackers may have already exploited the vulnerability and exfiltrated data. No organization can manually track every piece of software in their extended vendor ecosystem through periodic check-ins. In the MOVEit incident, many companies had no idea they were at risk until news of data breaches surfaced. Traditional vendor risk management simply isn’t designed to monitor technical exposure in real time.

The Intelligence-Led Solution: Defending against widespread vulnerabilities requires connecting two dots instantly: what’s vulnerable and who in your supply chain is using it. This is where an intelligence platform shines. Recorded Future’s approach combines technical attack surface intelligence with real-time vulnerability tracking. It continuously scans the internet to map out the external-facing tech stack of your third parties. The moment a new critical vulnerability is disclosed, Recorded Future’s intelligence automatically checks which of your vendors are running that technology. You receive an immediate, prioritized alert such as: “CRITICAL: 15 of your third-party vendors are exposing servers running [the vulnerable software]. Prompt them to apply patches or mitigations immediately.”

Type 3: The Fourth-Party & Concentration Risk

The Scenario: Sometimes the biggest risk in your vendor ecosystem isn’t with your direct third parties, but with their key dependencies. A “fourth party” is a vendor of your vendor, and if one that many of your critical vendors rely on goes down, it can create a single point of failure. A single outage can cascade up the chain, disrupting operations even when direct vendors appear secure.

Real-World Example: The 2021 ransomware attack on Kaseya’s VSA remote monitoring and management platform is a textbook case. Kaseya primarily served managed service providers (MSPs), who in turn delivered IT services to thousands of downstream customers. When attackers exploited Kaseya VSA, they were effectively able to push ransomware out through those MSPs to many organizations that had no direct relationship with Kaseya at all—they only “knew” their MSP. A single fourth-party dependency became the pivot point for a broad, multi-industry disruption.

Why Traditional Methods Fail: If you looked at each of your primary (third-party) vendors in isolation, they all might have passed your security reviews with flying colors. What the traditional assessment missed was that ten of those vendors all relied on the same subcontractor for a critical function, a critical audit blind spot. Most organizations only discovered their exposure to Kaseya after MSP-delivered systems were already encrypted. Without continuous visibility into your vendors’ vendors, this kind of concentration risk remains invisible until it’s too late.

The Intelligence-Led Solution: The only way to manage fourth-party and concentration risk is through continuous mapping of your vendors’ vendors, coupled with dynamic risk scoring. Recorded Future’s Third-Party Intelligence solution automatically identifies and maps these Nth-party relationships throughout your supply chain. In practice, this means if a critical fourth-party suffers a breach, you won’t be finding out via the news days later. Instead, your intelligence dashboard would immediately show that entity’s risk score spiking from, say, a modest 50 to a critical 99. This timely insight gives you a head start to activate business continuity and incident response plans. You immediately know exactly which of your vendors are impacted and can work to contain the fallout.

Type 4: The Vendor Credential Compromise

The Scenario: Not all third-party attacks involve sophisticated malware or supply chain tampering. Sometimes hackers just log in through the front door. In this scenario, a threat actor steals valid credentials from one of your vendors and uses those to access your systems. Perhaps an employee at a smaller, “low-risk” vendor, like an HVAC contractor, falls victim to a phishing email or unknowingly runs info-stealer malware on their laptop. Their VPN login or application credentials to your network get quietly harvested and sold on the dark web. An attacker buys the login, bypasses your multi-factor authentication, and walks into your network posing as a legitimate third-party user.

Real-World Example: This tactic was at the heart of the high-profile 2023 breaches of MGM Resorts and Caesars Entertainment, where attackers initially gained access via a third-party IT support vendor’s compromised VPN credentials.

Why Traditional Methods Fail: A vendor security questionnaire cannot prevent an individual at a partner company from clicking a phishing link or using a weak password. Your vendor might have all the right policies on paper, but those policies are irrelevant the moment an attacker has a valid username and password in hand. Traditional TPRM programs are about vetting a vendor’s security controls and compliance, but they don’t provide real-time awareness of things like a password leak or dark web sale of access related to that vendor.

The Intelligence-Led Solution: The key to stopping a credential-based breach is catching those compromised credentials before they are used against you. This calls for continuous identity-centric intelligence. Recorded Future’s Third-Party Intelligence module includes automated monitoring of a wide range of sources, from dark web forums to infostealer logs and criminal marketplaces, specifically watching for any mention of your organization’s partners and their accounts. The moment a set of credentials associated with one of your vendors appears in an illicit context, you receive a high-priority alert. Your team can immediately revoke or reset that vendor account and investigate the extent of access. This is the definition of proactive defense: you’re effectively shutting the door on the attacker before they can walk through it.

Type 5: The Operational & Financial Instability Risk

The Scenario: Sometimes the greatest third-party risk is a vendor’s operational or financial collapse. Consider a scenario where a critical vendor suddenly encounters a non-cyber crisis like bankruptcy, a major lawsuit or regulatory sanction, a natural disaster, or even a geopolitical event that halts their business. From your security team’s perspective everything looked fine, but virtually overnight this partner’s failure threatens to grind your business to a halt.

Real-World Example: A headline-grabbing case occurred with the sudden collapse of Silicon Valley Bank (SVB) in March 2023. SVB wasn’t attacked by hackers; it suffered a bank run and shut down in a matter of days. Companies that used SVB as a banking partner or for credit found themselves unable to access funds or process payroll, creating a cascade of operational and financial issues.

Why Traditional Methods Fail: A standard security questionnaire or compliance-focused vendor review is utterly blind to this category of risk. Your CISO’s third-party risk process likely doesn’t include reviewing a vendor’s financial statements or monitoring news about their executives’ legal troubles—nor should it, in a traditional model, since those are outside the classic IT security scope. As a result, organizations were caught off-guard by SVB’s collapse. A vendor that looked perfectly green from a security control standpoint turned out to be a huge business continuity threat. This kind of event exposes an “edge case” risk that isn’t an edge case at all: vendors can introduce strategic and financial risks that security teams and vendor managers often aren’t tracking.

The Intelligence-Led Solution: Truly comprehensive third-party risk management means monitoring all-source intelligence on your vendors, not just cyber indicators. Recorded Future’s Third-Party Intelligence platform is built to ingest and analyze a broad spectrum of data about companies. This includes real-time monitoring of global news media, credit ratings and financial filings, changes in executive leadership, legal filings, sanctions lists, regulatory watchlists, and more. By defining “risk” holistically, the platform can alert you to significant non-cyber events that may impact your vendors. These signals give your security, risk, and procurement teams time to react, whether that means activating contingency plans, finding alternate suppliers, or engaging leadership to address the issue.

The Solution: Move from “Trust” to “Continuous Verification”

The five examples share a theme: “trust” is not a control. Vendor attestations and annual audits don’t capture rapidly changing third-party conditions—exploits, credentials, dependencies, and financial shocks. To answer why third-party risk management is important: it’s no longer a “vendor” problem. It’s your attack surface, your data, and your reputation on the line.

This is why security leaders are shifting from a trust-but-verify model to a model of continuous verification, replacing blind trust with live intelligence.

Moving to continuous verification means supplementing or replacing periodic vendor check-ins with real-time intelligence and automation. This is where Recorded Future’s approach comes in. Recorded Future acts as a “risk radar” that’s always on, giving you a 360-degree, real-time view of your third-party ecosystem. It uniquely integrates multiple intelligence streams—threat intelligence, attack surface intelligence, and third-party risk intelligence—into one platform.

• Know which CVEs matter today across your ecosystem with Vulnerability Intelligence and exploit-in-the-wild context.


• Detect compromised vendor access with Identity Intelligence and automated revocation workflows.


• Map fourth-party dependencies and track concentration with Third-Party Intelligence risk scoring.


• Operationalize all of this via integrations to SIEM/SOAR/EDR and GRC/TPRM workflows (e.g., ServiceNow) so that risk evidence triggers action.

Recorded Future is the only platform connecting disparate, live third-party intelligence into a single, real-time view that answers the question:

“Which of my vendors poses the greatest risk to my business—right now?”

Ready to replace point-in-time vendor questionnaires with continuous verification? Schedule a personalized demo, and our experts will show you how the Recorded Future platform provides a complete, real-time picture of your vendor ecosystem.

Source: RecordedFuture
Source Link: https://www.recordedfuture.com/blog/third-party-risk-examples