Mitigating Cybersecurity Threats In Channel Partner Management

In 2019, the fake version of ASUS’s update software left both users and the tech community shocked. Cybercriminals created counterfeit software that contained malware but appeared legitimate because it was signed with real security certificates. What was even more shocking is that it was distributed through ASUS’s own update platform, making it seem like a safe download for users. Unbelievable, isn’t it? Incidents like this underscore the growing cybersecurity threats in channel partner systems, as it involves exchanging data with multiple external entities—such as resellers, distributors, and agents.

Further, with the rise of globalization, channel partner networks often span across multiple regions and countries. This creates more opportunities for attackers to exploit regional vulnerabilities and breach systems.

Partners in different locations may also have varying cybersecurity regulations and standards, creating a complex landscape. This makes it even more challenging to implement uniform cybersecurity measures.

This blog discusses cybersecurity threats and solutions in the context of the channel partner ecosystem, with a focus on the unique challenges faced by mid-market companies.

Why Mid-Market Companies Are At A Greater Risk?

Mid-market companies are often crucial players in channel management, bridging the gap between large-scale suppliers and end customers. Therefore, as we discuss cybersecurity threats in a channel partner system, it’s important to highlight why cybersecurity is essential to mid-market distribution segment:

• Limited Resources and Expertise

Mid-market companies frequently operate with leaner budgets, due to which cybersecurity is mostly underfunded. Further, many companies rely on a small IT team that handles multiple responsibilities, leaving cybersecurity measures as a lower priority. These factors combined lead to less frequent software updates and minimal threat monitoring.

• Technology Constraints

Many mid-market companies rely on legacy systems that are not built to withstand modern cyber threats. These systems often lack support for updated encryption protocols, secure APIs, or multi-factor authentication.

• Lack of Dedicated Security Policies

Compliance with cybersecurity standards (e.g., ISO, GDPR) is often less prioritized in mid-market companies. Without clear policies in place, data protection in channel management becomes inconsistent.

• No Security Monitoring

We just discussed that mid-sized companies often lack the technology and staff for real-time monitoring. Due to this, the breaches can go unnoticed for longer periods, allowing attackers more time to move laterally within the network.

• Limited or No Preparedness for Disaster Recovery

Since these companies don’t have a disaster recovery and backup plan in place, it becomes difficult for them to recover from any form of cyber incident.

Cybersecurity Threats In Channel Partner Management

Channel partners often have access to sensitive data and systems, making them prime targets for cybercriminals. Here are the key cybersecurity threats associated with channel partner management. We have also mentioned ways for mitigating cybersecurity threats.

1. Supply Chain Attacks

98% of companies face negative impacts due to supply chain cybersecurity breaches.⁽¹⁾ Apparently, this is one of the most critical and commonly occurring cybersecurity threats in channel partner systems.

In supply chain attacks, the attackers exploit vulnerabilities in a partner’s system or software, then use it as a gateway to infiltrate the primary company.

To ensure your partners are protecting your business from supply chain cybersecurity breaches, consider these actions:

• Evaluate each partner’s cybersecurity practices before integrating their systems, focusing on their compliance with security standards.
• Deploy multi-factor authentication (MFA) to limit the access.
• Use network segmentation to prevent attackers from moving within your system.
• Perform routine security audits of channel partners to identify any vulnerabilities.

2. Phishing and Social Engineering Attacks

In this case, cybercriminals often use tactics to impersonate legitimate users, gain login credentials, or trick employees into giving up access. For example- An employee may receive an email that appears to be from their IT department, asking them to “confirm” their password. If they click the link and enter their details, the attacker can capture their credentials.

Here are some effective measures to control such phishing attacks:

• Conduct regular training sessions to educate partner companies on recognizing phishing attempts.
• Ask them to use email filtering solutions that detect and block phishing attempts before they reach employees’ inboxes.
• Enable MFA (Multi-Factor Authentication) for all sensitive applications.

3. Insider Threats

Employees or contractors from a partner company could, intentionally or accidentally, leak sensitive information and open the network to cybercriminals. Intentional leaks might involve individuals stealing or disclosing data out of revenge or for an external group. Accidental leaks can occur through simple mistakes, like mistyping an email address and sending a document to the wrong recipient, clicking on a suspicious link, or using weak passwords.

To make sure that this doesn’t happen with any of your partner companies, consider the below measures:

• Restrict access to sensitive data to only those people who absolutely need it.
• Train channel partners on secure practices, such as recognizing phishing emails, handling sensitive information, and following strong password protocols.
• Implement behavioral monitoring tools that detect unusual access patterns, which could indicate insider threats, and respond proactively.

4. Third-Party Data Breaches

A few years back, Uber faced a data breach through a compromised vendor. Teqtivity, their vendor for IT asset management was attacked by hackers who accessed email addresses and other information of over 77,000 Uber employees. This is more common than you think. In fact, 62% of network intrusions originate with a third-party.⁽²⁾

In a channel partner network, a common risk is partners using outdated or vulnerable software, which creates easy entry points for attackers. Once a third-party application is compromised, it can expose the entire network to further threats. Here are some ways for preventing data breaches in channel partnerships:

• Require partners to adhere to specific cybersecurity protocols, like maintaining up-to-date software, implementing security patches promptly, and using secure systems.
• Limit the data you share with third parties to what’s necessary and ensure that any sensitive data is encrypted.
• Require your partners to ensure third-party cybersecurity compliance, meaning their vendors also adhere to recognized security standards (e.g., ISO, GDPR).
• Work with your partners to conduct regular security testing, including vulnerability scanning and penetration testing.
• Establish and test incident response plans to quickly respond to breaches originating from third-party vendors.

5. Malware and Ransomeware Attacks

Malware is designed to damage or gain unauthorized access to systems. Ransomware, a specific type of malware, encrypts data and locks users out of their systems until a ransom is paid. Ransomware attacks can impact critical functions like order processing, inventory tracking, and customer support, leading to operational disruptions and financial losses. Consider the following ways to avoid any situation like this:

• Deploy endpoint security tools on all devices to detect and prevent malware infections.
• Maintain backups of critical data and systems.
• Regularly test recovery plans to minimize downtime in case of ransomware attacks.
• Divide networks into smaller segments to prevent the spread of malware across systems.

6. Inadequate Security in Shared Cloud Environments

Recent data reveals that 80% of organizations saw an increase in cloud attacks in 2024.⁽³⁾ Cloud environments are frequently used to

facilitate data sharing and collaboration within the channel partner system. However, if any of the partners do not properly secure their access to the shared cloud resources, they may expose the entire system to data leakage.

APIs (Application Programming Interfaces) and user interfaces are essential for enabling user interactions in cloud environments. Poorly secured APIs can be a common attack vector. Follow the below measures:

• Implement role-based access control and MFA (Multi-Factor Authentication), ensuring only authorized users have access.
• Encrypt data in transit and at rest and use secure APIs with authentication.
• Conduct frequent audits and compliance assessments to verify that cloud environments meet security standards.

Conclusion:

By addressing these threats and implementing the suggested cybersecurity mitigation techniques, you can build more secure relationships with channel partners, safeguarding your data and systems across the entire distribution network.

Let’s quickly have a recap by discussing the best practices for channel partner cybersecurity!

• Establish clear security standards, requiring partners to follow protocols like regular software updates, data encryption, and secure access controls.
• Routine audits and cyber risk assessment for channel partners must remain as an ongoing process.
• Education on cybersecurity best practices is equally important.
• Segregate sensitive data based on its classification.

Let’s foster a more resilient, trustworthy channel partner network!

FAQs:

How to mitigate cyber security risk?

To mitigate cybersecurity risks:

• Follow basic security protocols like multi-factor authentication, network segmentation, and data encryption.
• Regularly update software and hardware to eliminate vulnerabilities.
• Conduct continuous security monitoring to detect threats in real time.
• Give training to your employees to identify phishing attempts and other attacks.
• Have incident response plans in advance.

What are the main types of cybersecurity threats?

• Supply Chain Attacks- In this type, the attackers exploit vulnerabilities in a partner’s system or software, then use it as a gateway to infiltrate the primary company.
• Phishing and Social Engineering Attacks- Here attackers impersonate legitimate users, gain login credentials, or trick employees into giving up access.
• Insider Threats- This is where employees or contractors from a company intentionally or accidentally, leak sensitive information.
• Third-Party Data Breaches- When third-party service providers experience data breaches, attackers can use this access point to infect the primary organization’s network.
• Malware and Ransomeware Attacks- Malware steals data or cause damage, while ransomware encrypts data and locks users out of their systems until a ransom is paid.

How do you handle cyber risks from vendors and third parties?

Follow the below measures to manage cyber risks from third parties:

• Establish strict cybersecurity standards and conduct thorough risk assessments before onboarding vendors.
• Limit third-party access to only necessary data.
• Use network segmentation to limit the reach of the security breach.
• Require regular audits and security compliance checks.
• Encourage vendors to implement strong authentication methods.

What are the cyber threats in the supply chain?

Supply chain threats often exploit vulnerabilities in a partner’s network to gain access to the primary organization. These could be:

• Malware in software updates
• Data breaches from third-party vendors
• Phishing and social engineering attacks
• Ransomware attacks where attackers exploit weak security practices to reach target networks