Key Takeaways

• Third-party risk is escalating. In 2024, 30% of breaches involved a third-party vendor, twice as much as the previous year.

• Static assessments are no longer enough. Questionnaire-based audits provide only outdated snapshots, leaving organizations blind to evolving threats between review cycles.
• Continuous, intelligence-led monitoring is essential. Real-time visibility into vendors’ external security posture enables faster detection, objective risk scoring, and proactive defense.
• Recorded Future’s Third-Party Intelligence closes the gap. By continuously tracking over 5 million organizations and 1 million technology products, it gives security teams the data-driven insight needed to stay ahead of emerging supply chain threats.

The Modern Supply Chain: A Widening Attack Surface

The digital supply chain has undergone a profound transformation. What was once a small network of trusted vendors has evolved into a vast, interconnected web of technologies, platforms, and data flows.

Cloud providers now host mission-critical infrastructure. SaaS platforms handle sensitive data. Managed service providers, subcontractors, and open-source libraries form the unseen backbone of daily operations. Each of these relationships expands the attack surface, introducing new dependencies and new vulnerabilities.

A single vendor today may rely on dozens of others, each with its own third- and fourth-party relationships. The result is an ecosystem of thousands of potential ingress points, with many of them outside an organization’s direct line of sight. These dependencies are often invisible beyond the first tier, leaving businesses exposed to risks they may not even know exist.

Cybercriminals understand this. Supply chain compromises have become a preferred strategy for attackers because infiltrating a vendor is often easier and more scalable than targeting an organization directly. By compromising one trusted connection, adversaries can pivot to dozens of downstream victims, often before the original breach is even detected.

This expanding ecosystem demands a new approach. Securing the modern digital supply chain requires continuous, intelligence-led visibility, one that provides an external, real-time view of every partner and vendor’s security posture. Only with ongoing, data-driven insight can organizations uncover hidden exposures and detect emerging threats before small weaknesses become systemic failures.

The Unavoidable Truth: Key Third-Party Risk Statistics for 2025

Every year, the volume, cost, and complexity of vendor-related breaches continue to rise, exposing weaknesses that traditional risk management can’t contain. The following third-party risk statistics illustrate just how pervasive the problem has become and why a new approach is urgently needed.

Frequency and Volume

Third-party breaches are no longer isolated events. They are becoming a defining feature of the modern threat landscape.

According to Verizon’s most recent Data Breach Investigations Report, 30% of breaches involved a third-party vendor, twice as much as the previous year. However, this figure is likely conservative due to underreporting and misclassification, especially when the compromise occurs several layers deep in their vendor ecosystem.

Financial Impact

According to IBM’s 2024 Cost of a Data Breach report, the average cost of a third-party breach is over $5.08 million. Highly regulated sectors such as healthcare and finance face even steeper costs.

The true financial impact of a breach extends beyond the initial response, encompassing lost revenue, increased cyber insurance premiums, and reputational damage that drives customer churn. Organizations may also face expensive marketing and PR efforts to restore trust after a high-profile supply chain incident.

Dwell time — the duration between initial compromise and detection — compounds these costs. In 2024, organizations with a dwell time beyond 200 days faced average breach costs of $5.01 million.

Gartner research reveals that third-party breaches cost roughly 40% more to remediate than those that originate within an organization’s own systems, due to the additional complexity of managing incidents that span multiple entities, legal jurisdictions, and data environments. When breaches involve personally identifiable information (PII), PHI, or payment card data, costs can climb even higher as regulatory penalties and legal exposure multiply.

Hidden Dangers: Fourth-Party and Nth-Party Risk

Modern supply chains extend far beyond the vendors an organization directly manages. Each third-party relationship is underpinned by its own network of fourth and nth parties—subcontractors, technology providers, and cloud services. These indirect dependencies create exposure that most organizations can neither see nor control.

According to Whistic’s 2024 Third-Party Risk Management Impact Report, half of all companies work with more than 100 vendors, up from 38% in 2023. And for each third-party vendor in a supply chain, organizations typically have indirect relationships with nearly 14 times more fourth and fifth parties, according to The Cyentia Institute.

These numbers underscore the growth of interconnected risk. Each new supplier introduces dozens of unseen connections, and every one of those connections can become an attacker’s entry point. The impact can quickly cascade through shared platforms, APIs, and service providers, affecting multiple tiers of partners and customers.

The MOVEit breach of 2023 is a prime example. What began as a single vulnerability in one file transfer application rapidly spread across thousands of organizations, from banks and universities to government agencies. Many of those affected never had a direct contract with the compromised vendor.

Why Traditional Third-Party Risk Assessments Are Failing

For many organizations, third-party risk management still relies on the same tools and tactics used a decade ago—static checklists, self-reported questionnaires, and periodic audits. These methods were designed for a slower, more predictable vendor landscape. Today, they’re simply outmatched by the size and interconnectivity of modern supply chains.

Vendor questionnaires and checklists are only as good as the answers provided. Too often, the information is outdated, incomplete, or inaccurate, leaving security teams with a false sense of assurance. These assessments might capture what a vendor’s security looked like at a single moment in time, but attackers don’t wait for your next scheduled check-in. Every day between audits is another opportunity for adversaries to exploit newly discovered vulnerabilities or misconfigurations.

Static assessment programs also lack the scale and speed required to monitor hundreds or thousands of vendors effectively. As the vendor ecosystem expands, traditional approaches simply can’t keep pace with the dynamic nature of today’s threat environment.

The data underscores just how strained these legacy methods have become:

• 44% of organizations assess more than 100 third parties each year, yet only 4% of organizations have high confidence that their third-party questionnaires accurately reflect real-world risk.
• Nearly four in ten companies use multiple questionnaires for different risk domains, sending an average of 55 questionnaires to third parties annually.

These numbers reveal a troubling paradox: organizations are spending more time than ever assessing vendors but gaining less clarity than ever in return. Without continuous, intelligence-led visibility, even the most diligent third-party risk programs are operating one step behind and measuring compliance rather than managing risk.

Shifting from Assessment to Intelligence: A Better Approach

Traditional third-party risk assessments expose the limits of hindsight. Intelligence-led monitoring delivers the advantage of foresight.

Static questionnaires stop at the vendor’s last self-reported status, which quickly becomes obsolete when adversaries move by the hour. An intelligence-based approach, by contrast, looks outward to live signals, behavioral patterns, and threat activity that reflect a vendor’s true security posture in real time.

The core shift is from assessment to intelligence.

• Assessments capture what vendors say about their defenses.
• Intelligence reveals what attackers see (and often what vendors don’t yet know).

This change is more than a process upgrade; it’s an evolution in how organizations manage supply chain security. Continuous, intelligence-led monitoring replaces static snapshots with ongoing, data-driven visibility across every tier of the vendor ecosystem.

By ingesting indicators from the open web, dark web, and technical telemetry, organizations can identify vulnerabilities or emerging exploit chatter as they happen—not months after the fact. The advantages are clear:

• Proactive vs. Reactive: Intelligence shifts third-party risk from response to prevention, allowing teams to identify issues before they evolve into breaches.
• Objective vs. Subjective: Real-world data replaces self-attestation, grounding risk decisions in observable evidence rather than vendor claims.
• Comprehensive Visibility: Continuous monitoring provides an attacker’s-eye view of each vendor’s digital footprint, uncovering blind spots that traditional audits miss.

How Recorded Future’s Third-Party Intelligence Delivers Continuous, Contextual Insight

Recorded Future’s Third-Party Intelligence exemplifies this modern approach. It delivers real-time risk scores and actionable alerts derived from the broadest range of data sources available, including dark web monitoring, technical telemetry, and validated threat intelligence. These insights integrate into existing risk management workflows, transforming static oversight into a living, adaptive defense.

Core capabilities include:

• Continuous Monitoring. Tracks over 5 million organizations and 1 million technology products for breaches, malicious traffic, ransomware extortion, and dark web chatter.
• External Risk Scoring. Uses machine learning and NLP to analyze data from hundreds of thousands of open, dark web, and technical sources, generating dynamic Risk Scores that quantify vendor exposure.
• Dark Web and Threat Intelligence. Identifies data leaks, compromised credentials, and chatter around vendor breaches before disclosure.
• Comparative Vendor Assessment. Enables side-by-side comparison of vendors to prioritize procurement and onboarding decisions.
• Stakeholder Reporting. Delivers comprehensive, context-rich risk profiles for leadership and board reporting.
• API Integration. Connects with existing TPRM, GRC, and ticketing platforms, feeding risk data into established workflows.
• Automated Mapping of Internal Entities and Subsidiaries. Assesses risk stemming from a supplier’s technical infrastructure, subsidiary relationships, and geographic footprint.
• Custom Alerts. Allows teams to define criteria for alerts (e.g., vendor breach, new exposure) and focus only on the most relevant risks.

Customer outcomes include:

• 73% average increase in visibility into potential threats
• 32% less time spent on evaluating new vendors or supplier
• 35% more third parties assessed
• 43% average increase in security team capacity

The evidence is clear: reactive oversight leaves organizations blind to threats already moving through their supply chains. A continuous, intelligence-driven approach changes that equation. By combining real-time visibility with actionable insights, security and risk teams can detect vendor threats early, respond faster, and reduce the financial and reputational fallout of supply chain attacks.

Don’t wait for the next third-party breach to become another statistic. Book a demo to see how Recorded Future’s Third-Party Intelligence helps organizations stay ahead of rapidly evolving risks.