Pentesting for Third-Party Risk Management

What CISOs Should Demand from Vendors

TL;DR

Third-party risk has shifted from a secondary concern to a primary focus for Chief Information Security Officers (CISOs). Adversaries increasingly recognize that the path of least resistance often leads through an organization’s interconnected vendor ecosystem. As a result, validating the security claims of third parties has become a critical, non-negotiable function of modern risk management. 

Comprehensive penetration testing across all digital domains, not just web applications, is essential for this validation. It moves beyond theoretical compliance and provides empirical evidence of a vendor’s resilience against real-world attack techniques. For CISOs, the time has come to set a higher standard. Independent, continuous penetration testing must become a contractual requirement to effectively manage third-party risk and safeguard the enterprise. 

The Expanding Third-Party Attack Surface

 Modern enterprises operate as complex ecosystems, not isolated fortresses. Your reliance on a vast network of SaaS platforms, cloud service providers, contractors, and suppliers is a business accelerator, but it also introduces significant risk. Each vendor connection, whether through a network integration, API call, or a contractor with privileged access, creates a potential entry point for an attacker.

The headlines are filled with cautionary tales. High-profile breaches like SolarWinds, MOVEit, and Kaseya share a common lesson: attackers don’t need to breach your perimeter directly when they can compromise a trusted supplier. These incidents demonstrated how a single vulnerability in a vendor’s software can create a catastrophic ripple effect, impacting thousands of downstream customers. 

This expanding attack surface is not just a technical problem; it’s a pressing compliance issue. Evolving regulations such as the EU’s NIS2 Directive and Digital Operational Resilience Act (DORA), alongside established standards like PCI DSS and GDPR, are placing greater accountability on CISOs for the security posture of their entire supply chain. Proving due diligence now requires demonstrating that you have rigorously vetted and continuously monitored the security of your third-party partners.

Why Third Parties Are Prime Targets

Adversaries are strategic and seek the highest return on their efforts. The vendor ecosystem has become a prime target for several key reasons: 

• Always-On Exposure: Internet-facing systems, public APIs, and multi-tenant SaaS applications provide a constant and accessible attack surface for threat actors to probe for weaknesses. 

• Shared Data Flows: Your vendors often handle your most sensitive assets, including personally identifiable information (PII), financial records, and proprietary intellectual property. A breach of their systems is effectively a breach of your data. 

• Diverse and Complex Environments: The typical vendor ecosystem is a patchwork of cloud, on-premises, and hybrid infrastructures. This complexity can create security blind spots and misconfigurations that automated scanners might miss but that a skilled attacker can exploit. 

• Elevated User Access Risks: Third-party contractors and support personnel frequently require privileged access to your systems. Without stringent controls and monitoring, these accounts represent a significant risk if compromised. 

• Opaque Security Practices: Many vendors present compliance certificates as proof of security. However, these documents often reflect process maturity, not true operational resilience. They claim to be secure but may lack evidence from rigorous, independent testing to prove it.

The CISO’s Risk Equation: A Vendor’s Weakness is Your Liability 

In the interconnected business landscape, the equation is simple and unforgiving: your vendor’s security weaknesses become your liabilities. The potential impacts of a third-party breach extend far beyond the immediate technical cleanup. They represent a direct threat to strategic business outcomes. 

CISOs must articulate these risks in terms of business impact to the board and fellow executives: 

• Regulatory Fines and Penalties: A vendor-induced data breach can trigger severe financial penalties under regulations like GDPR, HIPAA, and PCI DSS. Emerging frameworks like DORA explicitly mandate that financial entities manage the information and communications technology (ICT) risk of their third-party service providers, making you directly accountable for their failures. 

• Disruption of Critical Operations: Your business depends on the availability of vendor services. A ransomware attack on a key supplier could halt your manufacturing line, disable your customer service platform, or disrupt your supply chain, leading to significant revenue loss. 

• Reputational Harm and Erosion of Trust: Customers and partners entrust you with their data. A breach originating from a third party erodes that trust, damages your brand reputation, and can give your competitors a significant advantage. Rebuilding that trust is a long and expensive process. 

• Legal and Contractual Disputes: A third-party breach can place you in violation of your own contractual obligations to customers, leading to costly legal battles, service level agreement (SLA) payouts, and damaged partner relationships. 

Why Traditional Third-Party Risk Management Approaches Fail

For years, third-party risk management (TPRM) has been a compliance-driven exercise. While well-intentioned, these traditional methods are no longer sufficient to counter a determined adversary. They create a false sense of security that crumbles under the pressure of a real-world attack. 

Here’s why these approaches fall short: 

• Self-Attested Questionnaires: Relying on a vendor’s self-reported answers in a security questionnaire is an exercise in trust, not verification. These documents rarely reflect the actual security posture and can be easily manipulated to meet contractual requirements. 

• Certifications Show Process, Not Resilience: A SOC 2 or ISO 27001 certificate is a valuable indicator of a mature security program. It shows that a vendor has documented policies and processes. However, it does not prove that their controls are implemented correctly or can withstand a sophisticated attack.  

• Point-in-Time Audits: An annual audit or penetration test provides a snapshot of a vendor’s security at a single moment. In a dynamic cloud environment with continuous development cycles, these reports become outdated almost as soon as they are published. A vulnerability can be introduced the day after the audit is complete. 

• Inadequate Scopes: Many vendors limit their penetration testing to automated vulnerability scans of their primary web application. This approach completely misses critical attack vectors in supporting APIs, cloud configurations, internal networks, and the human layer, leaving significant risks unassessed. This also applies to compliance audits, which can be scoped to exclude areas of the organization that are known to have weak or absent controls. Learn why the balance between automation and human analysis is key in pentesting. 

What CISOs Must Demand: A New Standard for Vendor Pentesting

To gain genuine assurance, CISOs must elevate their expectations and mandate comprehensive, continuous, and independent penetration testing as a condition of doing business. This requirement should be embedded in contractual language, enforced throughout the vendor lifecycle and include evidence of rigorous testing across all relevant domains: 

• Web Applications & APIs: Go beyond automated scans to find business logic flaws, authorization bypasses, and data leakage vulnerabilities that only manual testing can uncover. 
• Network Infrastructure: Require both external and internal network penetration tests to identify exposed services, weak segmentation, and lateral movement paths. 
• Cloud Environments: Request validation of cloud security posture, including tests for misconfigured storage buckets, overly permissive IAM roles, and vulnerabilities in serverless functions. 
• Mobile Applications: For vendors with mobile apps, ensure testing for insecure data storage on the device, weak encryption, and vulnerabilities in the APIs supporting the app. 
• Social Engineering Resilience: Ask for proof that the vendor tests their human controls through phishing, vishing, and other social engineering simulations. 
• Red Team Exercises: For critical vendors, push for full-scope red team exercises that simulate a true adversary attempting to achieve specific objectives, testing their detection and response capabilities.

To ensure these tests deliver meaningful results, CISOs should enforce the following key requirements: 

• Scope Clarity: The scope of testing must be clearly defined, covering all systems, applications, and integrations that handle your data or connect to your environment. 
• Testing Frequency: Shift from annual tests to a continuous model. A Penetration Testing as a Service (PTaaS) platform allows for ongoing testing and provides real-time visibility into a vendor’s security posture. 
• Independent Validation: Testing must be performed by a reputable, independent third-party security firm, not the vendor’s internal team. 
• Transparent Reporting: Insist that complete, unredacted reports are shared, that include detailed technical findings, and evidence of remediation. 
• Alignment to Standards: Ensure testing methodologies align with recognized industry frameworks like the OWASP Top 10, the MITRE ATT&CK framework, and NIST guidelines. This should supersede requirements for specific penetration testing qualifications or certifications, which indicate theoretical capability rather than practical reality.

The Role of a Trusted Security Partner

Validating the security claims of dozens or even hundreds of vendors is a significant challenge that can overwhelm internal security teams. Attempting to manage this process manually is inefficient and does not scale. This is where a strategic partnership with a trusted security provider becomes essential. 

A capable partner provides the technology, expertise, and scale needed to build a programmatic approach to vendor security validation. For instance, a firm like NetSPI can offer a comprehensive suite of solutions designed to address this challenge: 

• Comprehensive Pentesting Services: Access to a large team of experts who can perform rigorous penetration testing across all domains, from web and cloud to mobile and networks. 
• Threat-Led Red Teaming: For your most critical suppliers, leverage adversary simulation exercises that are mapped to regulatory frameworks like DORA and NIS2, providing the assurance required by regulators and the board. 
• Continuous PTaaS Platforms: Leverage a technology platform that centralizes test results, tracks remediation progress, and provides dashboards with executive-level insights into your third-party risk landscape. 
• CISO-Ready Reporting: Receive reports that translate technical vulnerabilities into business risk, helping you communicate effectively with stakeholders and prioritize remediation efforts with your vendors.

Move from Compliance to Resilience with NetSPI

Third-party risk is no longer a separate category; it is an integral part of your organization’s overall enterprise risk. The traditional, compliance-driven approach to TPRM, reliant on checklists and questionnaires, is fundamentally broken. Adversaries exploit real vulnerabilities, not missing checkboxes on an audit form. 

CISOs are in a unique position to drive meaningful change. By demanding independent, comprehensive, and continuous penetration testing evidence from vendors, you can move beyond trust-based assumptions and toward verifiable security assurance. Embedding this higher standard into your contracts and governance processes is the most effective way to reduce your attack surface, protect customer trust, and build a more resilient enterprise. It’s time to demand proof, not promises.