Supply Chain Attacks and
the Threats to Vendor Networks

For many years, supply chain attacks have been a concerning point for cybersecurity experts because a single attack on a single supplier might produce a chain reaction that compromises a network of providers.

Out of the diverse and evolved types of cyberattacks, Malware is the most common attack method, accounting for 62 percent of all supply chain cyberattacks.

In comparison to last year, supply chain attacks are predicted to increase fourfold by the end of 2021. In light of these statistics, there is a quick urge for the cybersecurity community to respond quickly. This is why unique defensive measures to avoid and respond to future supply chain cyberattacks while reducing their impact are urgent.

So, let us have a quick review of supply chain cybersecurity accompanied by some real-life cyber-hazards.

What Is a Supply Chain Attack?

It is a cyberattack strategy that targets an organization’s supply chain’s weaknesses. So, if you have a vendor network with inadequate security measures, it may get attacked based on its vulnerabilities. Since suppliers need access to sensitive data to interact with internal systems, attackers may create a data breach through a third-party vendor. This shared pool of data is vulnerable when a vendor is compromised.

Types Of Supply Chain Attacks

A single cyberattack on vendors can produce a chain of attacks able to compromise the entire network of providers. There are several types of supply chain cyberattacks. These target the build processes of vendor management software, the update mechanism, or the source code. Nevertheless, victims are likely to be compromised based on the following vectors:

  1. Application and similar firmware installers that mainly target the software’s source code
  2. Malware installed on external hard devices, including cameras, hard drives, phones, etc.
  3. Third-party or anonymous software updates that mainly target computer’s boot code

Viruses or other malicious software are sent via a supplier or vendor in supply chain attacks. Cybercriminals can then acquire access to critical company data, customer records, payment information, and other information. Let’s discuss these three types of supply chain attacks in detail:

Firmware Supply Chain Attack 

Injecting Malware into a computer’s booting code is a quick assault that may be carried out in a matter of seconds. The Malware is executed when a computer starts up, putting the entire system at risk. Firmware attacks are rapid, generally undetectable until you’re looking for them, and devastating.

Hardware Supply Chain Attack 

Hardware supply chain attacks involve physical devices or hardware to inject the virus. For example, the USB keylogger we mentioned before, thus, they rely on physical devices. To maximize their reach and harm, attackers will target a gadget that travels through the entire supply chain.

Software Supply Chain Attack 

A software supply chain attack only requires one compromised program or piece of software to transmit Malware across the whole supply chain. Attackers frequently target the source code of an application, injecting malicious code into a trusted app or software system. As an access point, attackers frequently target software or program upgrades. The difficulty in tracing software supply chain attacks stems from cybercriminals using stolen certificates to “sign” the code and make it appear authentic.

How Does a Supply Chain Attack Work?

Supply chain attacks tend to gain access to an organization’s vulnerable and uninhabited ecosystems. Therefore, the unique psychology behind these attacks is to infiltrate the security defenses of an organization’s vendor network. Consequently, viruses or other harmful software are sent via a supplier or vendor in supply chain attacks. It is essential to understand that supply chain attacks always begin with a human compromise. 

For example, if someone accesses an unsecured web page, becomes a victim of a phishing email or password misplacement, that is where the virus gets access to an organization’s vendor network. These viruses and malware may infiltrate a huge retail organization, collecting keystrokes to identify passwords for individual accounts.

Therefore, helping the Cybercriminals acquire access to critical company data, customer records, payment information, and other information. In addition to that, these malicious attackers usually stay hidden behind the tables. They wait till they gain access to the clientele of the compromised vendors over time.

Examples Of Supply Chain Attacks

Cybercriminals can infect many victims through these attacks on each target. This greater effectiveness has escalated the use of this attack approach in recent years. Following are some of the most popular supply chain cyberattacks’ examples:

Target USA; February 2014

Cybercriminals gained access to Target USA’s sensitive data through a third-party HVAC provider, resulting in a huge data breach. As a result, cyber attackers gained access to 70 million consumers’ personal information (PII) and financial information, affecting 40 million debit and credit cards. Additionally, attackers used phishing email to get access to the HVAC third-party vendor.

Panama Papers; April 2016

In a data breach, the Panamanian law firm Mossack Fonseca exposed over 2.6 terabytes of sensitive client information. The data hack exposed the tax cheating schemes of over 214,000 businesses and high-ranking officials. Due to the wealth of very sensitive, and thus highly valuable, client data stored in their servers, law firms tend to be the most appealing cyberattack targets.

Equifax; September 2017

The leading credit card reporting agency Equifax experienced a data breach due to an online application vulnerability. Over 147 million Equifax clients were affected by the incident. The stolen personal data includes social security numbers, driver’s license numbers, birth dates, and addresses.

Cost of Supply Chain Attacks

Regardless of the size of a business, the financial impact of these attacks can be potentially damaging due to the reputation damage, privacy breach and mistrust, and the regulatory fines imposed on the victim, resulting in steep costs. The average loss of data breaches in 2020 was $3.86 million. The average time invested in identifying the reach was 280 days (i.e., nine months on average) according to IBM and Ponemon Institute

In the United States, different industries incur different costs for data breaches. For example, the financial and healthcare sectors incur the highest data breach costs, i.e., $5.56 Million and $7.13 million, due to the stricter data breach policies and requirements regulated for these industries concerning sensitive customer, vendor, and organizational data.

However, that is not it; while incurring all these costs, the average time required for identifying and containing the reach is nine months, nearly 75% of the year.

Mitigate The Risks of Supply Chain Cyberattacks

The key to driving down these high data breach costs in a supply chain attack event is to have a finely-tuned, customized, and speedy malware detection and remediation process or tool at hand. It will help speed up the process, thus minimizing the data breach costs while minimizing the time cybercriminals spend in your systems, thereby minimizing the amount of compromised sensitive data. 

The key to mitigating these risks is by educating your employees and making them more cyber aware. You must condition and train your employees to become less susceptible to malicious web pages, proper use of passwords, and phishing emails. This way, you can decrease the human risk. Nevertheless, the following are some of the things that you can do in addition to educating your employees:

  1. The commonly known attack trajectory of supply chain cyberattacks is to access privileged accounts. Therefore, every organization must use privileged access management (PAM) frameworks to disrupt the attacker’s progression along this trajectory.
  2. Implement a zero-trust architecture (ZTA) throughout your organization, therefore, assuming all networks and network activities are malicious by default. Thus, keeping the intellectual property safe and secure using stricter policies. 
  3. It is of utmost importance to send regular third-party risk assessments to your supply chain. It will help identify and remediate the cyber gaps and software vulnerabilities that your vendor groups may have. 
  4. You must keep monitoring your vendor network for security vulnerabilities. You can use a third-party cyberattack monitoring solution to identify and surface all the software vulnerabilities.
  5. Although it is a hectic and time-consuming process, still, identifying data leaks can help scale the supply chain security more efficiently and faster than ever before

Final Words

Supply chain attacks are among the most complex forms of cyberattacks because they extend beyond the reach of our organization. Fighting these requires discipline, comprehensive monitoring of the entire ecosystem, and the usual proactive cyberculture approach. 

At Right-Hand, we offer solutions that help organizations build strong cyberculture that mitigate the human risk for themselves and their chains. Schedule a demo today if you want to understand how to become a more resilient organization and a more reliable vendor to your clients.   

Defend your link of the supply chain by empowering your workforce with cyber awareness.