Supply chain cyber attacks are becoming more frequent, posing a serious threat to organizations globally. Learning what supply chain attacks are and what to watch out for can help you implement the cybersecurity practices and procedures you need to protect your business.
Defining Supply Chain Attacks
A supply chain attack is a cyber attack that compromises a third-party supplier or vendor.
Essentially, the attacker exploits trust between a vendor and a business to penetrate the downstream customer’s systems and data. Supply chain attacks enable hackers to efficiently target multiple organizations through trusted distribution channels and relationships.
There are two primary forms of supply chain cyber attacks:
Software Supply Chain Attacks
The attacker injects malicious code into a software update deployed by a vendor or through a third-party component integrated into the supplier’s applications. The compromised software is then unintentionally distributed to users of that software, passing the infection on.
Hardware Supply Chain Attacks
The attacker introduces infected hardware components, such as a compromised router or altered computing chipset, into the supply chain. The vendor then unknowingly distributes the sabotaged hardware to purchasers.
In both instances, the vendor becomes a carrier to breach their own customers’ networks and systems, often impacting thousands of organizations globally.
Why Supply Chain Attacks Are Rising
According to cybersecurity firm CrowdStrike, 45% of businesses suffered a supply chain attack in 2021. What’s driving this surge?
Growth of Third-Party Services
As more businesses adopt managed service providers (MSPs), infrastructure-as-a-service (IaaS) solutions, and software-as-a-service (SaaS) applications, cyber attackers have an abundance of supplier targets to choose from.
Increased Software Dependencies
Modern software projects contain over 200 third-party libraries or components on average—each one a potential vector. If a single commonly used utility or API is compromised, thousands of downstream software products and users can be impacted.
Ongoing Digital Transformation
As companies embrace Internet of Things (IoT) devices, cloud migration, and interconnected business processes, supply chains are becoming more digitized. This expanded attack surface contains countless points of entry for determined attackers.
A single supply chain compromise can be leveraged to breach hundreds or even thousands of downstream organizations in one fell swoop. This lets attackers maximize financial motives with ransomware, data theft, and crypto mining campaigns.
By providing efficient access to so many victims, supply chain attacks are an increasingly attractive and rewarding tactic for cybercriminals globally.
Specific Risks of Supply Chain Attack Vectors
Depending on the attacker’s motivations, compromised supply chains can enable:
- Large-scale data theft of sensitive information like customer details, passwords, communications, and intellectual property.
- Widespread distribution of ransomware payloads by hijacking trusted software update channels.
- Product sabotage by altering source code or planting malware directly into hardware components.
- Disruption of business operations by blocking access to essential third-party services and tools.
- Ongoing monitoring of network communications and activities through unauthorized backdoors.
Supply chain attacks can inflict severe financial losses, halt production capabilities, cause physical infrastructure harm, and put human safety at risk, making it important to be proactive about defending your business against these threats.
Protecting Your Business from Supply Chain Attacks
Defending against supply chain threats is especially challenging since third-party security practices are tough to control. However, businesses can still take proactive precautions:
Perform Comprehensive Vendor Risk Assessments
Conduct thorough due diligence on all suppliers’ security standards and past incident history before partnering. Make sure to request documentation verifying their procedures and cybersecurity policies.
Adopt a Zero Trust Approach
Assume all users, devices, and software components are potentially compromised by default. Implement strict access controls, encryption, and continuous authentication.
Deploy Robust Security Tools and Visibility
Install firewalls and antivirus software to detect threats. Continuously monitor networks and applications to identify anomalies that could indicate compromise.
Develop Incident Response Plans
Document roles and responsibilities for supply chain breach scenarios. Establish communication plans for promptly notifying customers and partners of potential infections.
Consider Cyber Insurance Coverage
Since supply chain attacks cause business interruption and data recovery costs, cyber insurance can help offset damages. Carefully assess risks to select appropriate coverages and limits.
KSA Insurance partners with Coalition to provide comprehensive cyber insurance policies that protect against modern cyber threats, including supply chain attacks.
Promote Organization-Wide Security Awareness
Train employees to identify and report supply chain attack indicators. Foster a culture across the supply chain focused on transparency and collective security.
Tips for Software Supply Chain Security
Software supply chain attacks represent a growing threat as development increasingly relies on integrating third-party components. Here are key practices development teams can implement:
Inventory All Components
Maintain a complete bill of materials for third-party libraries and dependencies. Continuously scan to detect newly added open-source code.
Perform Code Audits
Manually review libraries for anomalies. Utilize SAST/DAST tools to identify vulnerabilities. Also, make sure to perform routine penetration tests on all assets.
Implement Secure Coding Standards
Adopt input validation, encryption, access controls, and rigorous logging in all custom code.
Control Access and Privileges
Adopt least privilege and minimal access for all developer accounts and tools. Require multi-factor authentication for code access.
Monitor for Compromise
Watch for unauthorized commit activities and repository changes. Be prepared to promptly disable compromised capabilities.
By integrating security across the software development life cycle, risks can be substantially reduced.
Protecting Hardware Supply Chains
While software supply chain attacks are accelerating, hardware supply chain threats remain a real concern. Steps hardware buyers can take include:
Work Only with Reputable Vendors
Require suppliers to demonstrate secure quality assurance and component testing processes.
Perform Thorough Receiving Inspections
Closely inspect shipments for any evidence of tampering and match against packing documents. Consider using X-rays to check for abnormalities.
Control the Boot Process
Utilize UEFI secure boot to validate firmware signatures before launch. Manually control BIOS and firmware versions.
Use cryptographic attestation to validate the identities and integrity of devices. Implement hardware security modules (HSMs) to safeguard keys.
Monitor for Anomalies
Watch for unusual performance changes or errors that could indicate compromised components. Check for abnormal network traffic.
Respond Decisively to Incidents
Have plans ready to isolate and replace suspect hardware rapidly. Identify all other systems that may be impacted.
The Role of Cyber Insurance in Risk Management
Given the severe business disruption risks supply chain attacks create, having adequate cyber insurance is strongly advised. Policies can offset investigation costs, business income losses from outages, recovery of compromised systems, regulatory fines for data leaks, lawsuits, and damages to customers if they are impacted.
When selecting coverage, work with carriers specializing in emerging cyber threats. Consider adding specialized policies like contingent business interruption insurance, which covers losses from vendor-related disruptions.
Proactively evaluating risks across your supply chain will enable choosing appropriate policy limits and deductibles. Robust cyber insurance reduces uncertainties should your business experience a supply chain breach.
Get a Free Cyber Risk Assessment
As supply chains continue digitizing, proactive management of both software and hardware risks is essential. While cyber insurance can offset financial impacts, organizations must also focus on security awareness, technical controls, and response readiness.
By identifying and mitigating supply chain vulnerabilities before they are exploited, businesses can adapt to the new era of interconnected threats. Through collective vigilance and in-depth defense, companies can partner to make supply networks a source of strength rather than weakness.
KSA partners Coalition offers a free cyber risk assessment, providing an overview of your risks and vulnerabilities. In addition to highlighting your vulnerabilities, the assessment includes a summary of recommended actions to help you mitigate your risk. Coalition also offers access to trained cybersecurity experts who can answer any questions you may have about the assessment or the recommendations you are provided.