Launching into the world of cybersecurity and risk management, we lay our main focus on deciphering a complex phenomenon that is taking the corporate world by storm: the third-party risk statistics. In reality, not only have third-party cybersecurity threats become a significant concern, they have also resulted in tremendous losses both at financial and reputational levels.

In order to understand the dynamics of these risks, we must first delve into an understanding of what 'third-party' implies in the context of cybersecurity. A third-party could be a supplier, a contractor, a partner or any other entity that directly or indirectly, has access to your company's information or data networks. Third-party risks denote the potential threats posed by these entities, if they lack in necessary data security measures, or has ill motives.

Unveiling The Numbers

According to a survey by Soha Systems, over 60% of all data breaches can be linked back to third-party vendors. To get even more grim, Deloitte's third-party risk management survey suggests that 87% of respondents have faced a disruptive incident with third parties in the last two to three years. Notably, the Ponemon Institute suggests that third-party breaches have increased by 27% since 2018.

Suffice to say, the numbers are not comforting. The rising number of cyber threats and breaches involving third parties are proving that companies need to put more attention towards third party risk management.

Third-Party Risk From Different Angles

Understanding the risks associated with third parties isn't just about identifying what percentage of these entities have been implicated in data breaches. We also need to look at the different types of third-party risks that can potentially plague businesses. To dissect this, we can delve further into three primary risk categories: compliance risk, operational risk, and reputational risk.

The Root Cause

The reasons behind the alarming increase of third-party risks are multifaceted. From lack of due diligence to failure in continuous monitoring of these third parties, the factors contributing to the risks are varied and sometimes intertwined. Notably, the fast-paced digital transformation has a significant role to play in this scenario.

Towards Better Risk Management

Implementing a robust third-party risk management (TPRM) program is no longer optional but a necessity. Such a program would include steps like conducting due diligence, monitoring the third-party relationships continuously, creating an Incident response plan, and investing in technologies that help assess third-party risk.

Recognizing the need to manage third-party risks better, various governmental and non-governmental institutions have introduced guidelines to handle this issue. For instance, the Office of the Comptroller of the Currency (OCC) has specific guidelines for managing third-party relationship risks.

In conclusion, the statistics revealing the significant contribution of third parties to cyber threats and breaches are indeed alarming. The growing reliance on third parties for various business processes, coupled with rapid digital transformations, only increases the spectrum of vulnerabilities for businesses. The aim, hence, should be to appreciate the complexity and gravity of third-party risks while putting in place a robust third-party risk management system. It isn't just about the numbers; it's about what we choose to do with an understanding of those numbers.