Businesses today are more reliant on technology than ever before. The internet has become an essential part of the supply chain, and companies can no longer afford to be without a secure and reliable online presence.
Unfortunately, cybercrime is on the rise; the FBI reported that cybercrime has increased 7% from 2020, with 847,376 reported complaints in 2021, with potential losses exceeding $6.9 billion. Businesses are at risk of losing valuable data, money, and even their reputation, making it critical that you assess and monitor your cyber risk.
In recent years, there has been a surge in cyber attacks targeting supply chain management systems. These attacks can have ripple effects, disrupting the flow of goods and causing significant economic damage.
The most notorious example is the NotPetya attack, which hit Ukraine in 2017 and caused billions of dollars in damages. But other incidents, such as the attack on Maersk, have also shown how vulnerable these systems are.
There are several reasons for this increase in attacks. First, supply chains have become more complex and interconnected, making them more difficult to protect. Second, many companies are still using outdated security systems that are unable to defend against new threats. Finally, there is a growing market for stolen data and other illicit goods that can be obtained through these attacks. As a result, you need to invest in better security measures to protect your supply chains from these growing threats.
What are Digital Risks in the Supply Chain?
In a globalized economy, the supply chain has become increasingly complex. As a result, you must now contend with a range of digital risks. There are as follows:
Cyber Attacks: These can come from both inside and outside of an organization. Cyber attacks disrupt production and lead to the loss of sensitive data.
Loss or Corruption of Data: This can happen due to technical issues, human error, or natural disasters.
Unauthorized Access to Data: This can happen if security controls are not adequate or if insiders abuse their privileges.
Material Substitution: This can occur when suppliers replace parts or materials without informing you. This can lead to lower quality products and increased costs.
Counterfeiting: Counterfeiting is when false products are introduced into the supply chain. This can pose a safety risk to customers and damage the reputation of your business.
By understanding these risks, you can take steps to mitigate them and protect their supply chains.
How to Mitigate Digital Risks
While these risks may seem daunting, there are steps that organizations can take to mitigate them.
1. Implement Strict Security Controls
- Perform real-time security logging and auditing
- Create incident response plans
- Put in place measures to prevent unauthorized access to their systems, such as firewalls and user authentication
- Implement zero-trust architecture to ensure that all users, internal and external, are authenticated and authorized at all levels of the system; no user or system is implicitly trusted
2. Employee Education
- Train employees on cybersecurity best practices and create awareness programs
- Ensure employees have the correct tools to protect sensitive data
- Teach employees to recognize social engineering attacks (e.g., phishing and malware)
3. Schedule Regular Digital Risk Assessments
- Trigger notifications if any cyber risks are found
- Conduct penetration testing and vulnerability testing
4. Data Management
- Protect data by encrypting it and storing it in secure databases
- Prevent the loss of data by keeping track of the data flow of your most vulnerable and valuable data
- Perform routine backups of critical data
5. Reduce Risk of Counterfeiting
- Use tamper-proof packaging and RFID tags to help reduce the risk of counterfeiting and material substitution
- Use cameras and other sensors to monitor the supply chain for signs of tampering or counterfeit products
6. Identify Threat Vectors
- Ensure your supplier problems don't become yours by identifying which supply chain partners don't have adequate security measures
Avetta One evaluates your suppliers and provides an end-to-end solution to mitigate these risks.
Contact us for a demo today!
Ellen Cibula is the founder of EllenCibula.com, where she helps businesses with financial technology, security, and payments. She has over 15 years of experience in the financial technology industry.