The Santa Fe Group, authorities in risk management and the managing agent of the Shared Assessments Program, released the results of the Third Annual Ponemon Institute’s study on Third Party Risk for the Internet of Things (IoT). Ponemon reports a dramatic increase in IoT-related data breaches specifically due to an unsecured IoT device or application since 2017 – from 15 percent to 26 percent – and the results might actually be greater because most organizations are not aware of every unsecure IoT device or application in their environment or from third party vendors.
More alarmingly, organizations surveyed have no centralized accountability to address or manage IoT risks. Less than half of company board members approve programs intended to reduce third-party risk and only 21 percent of board members are highly engaged in security practices and understand third party and cybersecurity risks in general. More than 80 percent of respondents believe their data will be breached in the next 24 months.
“This study proves it’s no longer a matter of if but when and board members of organizations need to pay close attention to the issue of risk when it comes to securing a new generation of IoT devices that have found their way into your network, workplace, and supply chain,” said Cathy Allen, founder and CEO of The Santa Fe Group, Santa Fe, NM. “The study shows that there’s a gap between proactive and reactive risk management. The time to address this issue is now and not later.”
This year’s study shows where improvements are critically needed in the following areas:
- While respondents believe a positive tone at the top is important to minimizing business and third-party risks, few companies represented in this study are making board-level governance an essential part of their risk management program.
- The IoT threat landscape is expanding rapidly; yet many companies are not assigning accountability or ownership to the management of IoT risks.
- Staffing and budgets are not adequate to manage third-party IoT risks.
- Third-party risk management (TPRM) programs should include IoT risks in order to evolve and mature their practices.
- IoT risk assessment and due diligence must move from TRUST assurance to VERIFY control validation techniques.
- Companies should be prepared for IoT regulatory oversight to rise.
- Most companies do not conduct employee training programs on the risks created by IoT devices. Such training must begin now.
A complete copy of the study can be downloaded here.