LINKED: Report from New York financial regulator notes 3rd party risk

A report from the New York State Department of Financial Services identifies what it calls “significant potential cyber security vulnerabilities with banks’ third-party vendors.”

Some highlights:

  • Nearly 1 in 3 (approximately 30 percent) of the banks surveyed do not require their third-party vendors to notify them in the event of an information security breach or other cyber security breach.
  • Fewer than half of the banks surveyed conduct any on-site assessments of their third-party vendors.
  • Approximately 1 in 5 banks surveyed do not require third-party vendors to represent that they have established minimum information security requirements. Additionally, only one-third of the banks require those information security requirements to be extended to subcontractors of the third-party vendors.
  • Nearly half of the banks do not require a warranty of the integrity of the third-party vendor’s data or products (e.g., that the data and products are free of viruses).

“A bank’s cyber security is often only as good as the cyber security of its vendors. Unfortunately, those third-party firms can provide a backdoor entrance to hackers who are seeking to steal sensitive bank customer data. We will move forward quickly, together with the banks we regulate, to address this urgent matter,” said Benjamin M. Lawsky, Superintendent of Financial Services.

Read more or visit our Vendor Risk resource page.

 

Share this post:

Glen Gower

About the author

Glen is the director of marketing and communications at Iceberg.