Vulnerability Management for Third-Party Applications: A Critical Security Imperative – Blogs Christian Sajere Cybersecurity and IT Infrastructure

In today’s interconnected digital ecosystem, organizations rely heavily on third-party applications and services to drive operational efficiency and deliver customer value. However, this dependency has created an expanding attack surface that cybercriminals are increasingly exploiting. The vulnerability management of third-party applications has emerged as one of the most challenging yet critical components of modern cybersecurity strategy.

Recent cybersecurity incidents have demonstrated the catastrophic impact that unmanaged third-party vulnerabilities can have on organizations worldwide. From supply chain attacks affecting thousands of downstream customers to critical infrastructure compromises that disrupt essential services, the consequences of inadequate third-party vulnerability management extend far beyond individual organizations.

This article examines the current threat landscape, explores the unique challenges of managing third-party application vulnerabilities, and provides actionable strategies for organizations to strengthen their security posture against these evolving threats.

The Evolving Third-Party Threat Landscape

Scale and Growth of Third-Party Risks

The Australian Cyber Security Centre (ACSC) reported in Annual Cyber Threat Report 2023-2024¹ that in FY2023-24, over 9% of all cyber security incidents responded to were cyber supply chain-related incidents. These incidents commonly involved compromised assets, networks and/or infrastructure (26%), compromised accounts and/or credentials (24%), or data breaches (20%). The impact of these incidents has been far-reaching, with business impacts including shipping delays to medical products, outages for sensitive monitoring systems, and release of commercial-in-confidence data.

According to Verizon’s 2025 Data Breach Investigations Report,² third-party involvement in breaches has doubled from 15% to 30% between 2024 and 2025. This dramatic increase highlights the growing risk that third-party relationships pose to organisational security. The report analyzed more than 12,000 breaches, representing the highest number ever analyzed in a single report.

Zero-Day Exploitation Trends

The exploitation of vulnerabilities has seen significant growth as an initial access vector, reaching 20% according to Verizon’s latest findings. This represents a 34% increase from the previous year and approaches the prevalence of credential abuse as the most common attack vector. Microsoft disclosed a record 1,360 vulnerabilities in 2024, with risks shifting toward elevation of privilege (EoP), cloud, and AI systems.

The Cybersecurity and Infrastructure Security Agency (CISA) Known Exploited Vulnerability (KEV) catalog continues to grow, with VulnCheck identifying evidence of 159 CVEs publicly disclosed for the first time as exploited in the wild during Q1 2025 alone, according to its 2025 Q1 Trends in Vulnerability Exploitation.³

Edge Device Vulnerabilities

A concerning trend has emerged with vulnerabilities targeting edge devices and virtual private networks (VPNs). According to Verizon’s 2025 Data Breach Investigations Report,⁴ the percentage of edge devices and VPNs as targets in exploitation attacks grew almost eight-fold from 3% to 22% year-over-year. These devices are particularly vulnerable because they must be exposed to the internet by design, making them attractive targets for threat actors.

Analysis of 17 edge device vulnerabilities added to the CISA KEV catalog showed that organizations achieved only 54% full remediation throughout the year, with a median remediation time of 32 days. More alarming is that the median time from CVE publication to CISA KEV listing for edge device vulnerabilities was zero days, with 9 of 17 vulnerabilities being mass-exploited on or before their CVE publication date.

Third-Party Application Vulnerability Challenges

Shared Responsibility Model Complexities

One of the primary challenges in third-party vulnerability management is understanding and implementing the shared responsibility model. Unlike traditional on-premises systems where organizations have full control over security configurations, third-party applications operate under a shared responsibility framework where security responsibilities are divided between the provider and the customer.

This division can create gaps in security coverage where critical vulnerabilities may remain unaddressed due to unclear ownership or inadequate communication between parties. Organizations must clearly understand their responsibilities within this model and ensure appropriate controls are in place for areas under their jurisdiction.

Limited Visibility and Control

Third-party applications often operate as “black boxes” from the customer’s perspective, providing limited visibility into the underlying infrastructure, security controls, and vulnerability status. This lack of transparency makes it difficult for organizations to:

Assess the true security posture of their third-party dependencies
Understand the potential impact of newly disclosed vulnerabilities
Implement appropriate compensating controls
Make informed risk-based decisions about continued usage

Dependency Chain Complexity

Modern applications rarely operate in isolation. Instead, they rely on complex dependency chains involving multiple layers of third-party components, libraries, and services. A vulnerability in any component within this chain can potentially compromise the entire application ecosystem.

The Australian Signals Directorate noted that supply chain compromises can result in multiple customer systems being affected simultaneously, as threat actors can better obfuscate their activities by compromising suppliers rather than directly targeting individual organizations.

Inconsistent Security Practices

Third-party vendors vary significantly in their security maturity and practices. While some maintain robust vulnerability management programs with regular security updates and clear communication channels, others may lack adequate security controls or provide insufficient transparency into their security operations.

This inconsistency creates a challenging environment for organizations attempting to maintain consistent security standards across their third-party application portfolio.

Impact of Third-Party Vulnerabilities

Financial Consequences

According to IBM’s Cost of a Data Breach Report 2025,⁵ organizations continue to face significant financial impacts from security incidents. While specific costs for third-party related breaches may vary, the cascading effect of supply chain compromises often results in higher costs due to the complexity of incident response and remediation activities.

The Australian Cyber Security Centre reported that in FY2023-24, the average self-reported cost of cybercrime per report for small businesses increased by 8% to $49,615, while medium businesses saw costs of $62,870 and large businesses faced $63,602 per incident.

Operational Disruption

Third-party vulnerabilities can cause significant operational disruptions that extend beyond the immediate security impact. Recent incidents involving major service providers have demonstrated how third-party compromises can effectively halt business operations for extended periods.

The ACSC highlighted cases where cyber supply chain incidents resulted in shipping delays to medical products and outages for sensitive monitoring systems, demonstrating the far-reaching operational consequences of third-party vulnerabilities.

Compliance and Regulatory Implications

Organizations operating in regulated industries face additional challenges when third-party vulnerabilities result in compliance violations or regulatory reporting requirements. The Australian Notifiable Data Breaches scheme requires organizations to notify both the Office of the Australian Information Commissioner (OAIC) and affected individuals when a data breach involving personal information is likely to result in serious harm.

In FY2023-24, according to its Annual-Report-2023-24,⁶ the OAIC received 1,012 data breach notifications, a 13% increase compared to the previous year. Of these, 41% resulted from cyber security incidents, highlighting the significant compliance implications of inadequate vulnerability management.

Best Practices for Third-Party Vulnerability Management

Comprehensive Risk Assessment and Vendor Selection

Organizations should implement a robust vendor selection process that prioritizes security outcomes alongside functional and cost considerations. This process should include:

Security Questionnaires and Due Diligence: Comprehensive evaluation of vendor security practices, including vulnerability management processes, incident response capabilities, and security certifications.

Third-Party Cyber Risk Management (TPCRM) Solutions: Leveraging specialized tools that provide quantifiable insights into vendor security postures and continuously monitor third-party risk exposure.

Secure-by-Design Requirements: Prioritizing vendors that implement secure-by-design principles and demonstrate commitment to maintaining security throughout the product lifecycle.

Continuous Monitoring and Assessment

Real-Time Threat Intelligence: Implementing systems that provide real-time visibility into newly disclosed vulnerabilities affecting third-party applications and services.

Automated Vulnerability Scanning: Deploying tools that can identify vulnerabilities in third-party applications and provide prioritization based on exploitability and business impact.

Security Performance Metrics: Establishing key performance indicators (KPIs) for third-party security performance and regularly reviewing vendor compliance with security requirements.

Incident Response and Coordination

Joint Incident Response Plans: Developing coordinated incident response procedures with third-party vendors that clearly define roles, responsibilities, and communication protocols during security incidents.

Breach Notification Procedures: Establishing clear processes for receiving timely notification of security incidents affecting third-party services and determining appropriate response actions.

Business Continuity Planning: Implementing backup and recovery procedures that can maintain business operations during third-party service disruptions caused by security incidents.

Contract and Legal Considerations

Security Requirements in Contracts: Including specific security requirements, vulnerability management obligations, and breach notification requirements in third-party contracts.

Right to Audit: Negotiating audit rights that allow organizations to verify vendor security practices and compliance with contractual security obligations.

Liability and Insurance: Clearly defining liability allocation for security incidents and ensuring appropriate cyber insurance coverage for third-party risks.

Technical Implementation Strategies

Network Segmentation and Access Control

Implementing robust network segmentation to limit the potential impact of third-party compromises is essential. Organizations should:

Isolate third-party applications from critical internal systems
Implement zero-trust network access principles
Monitor and log all third-party application traffic
Regularly review and update access permissions

Identity and Access Management

Proper identity and access management for third-party applications includes:

Implementing multi-factor authentication for all third-party service access
Regular review and rotation of API keys and authentication credentials
Least-privilege access principles for third-party integrations
Automated provisioning and de-provisioning of user access

Data Protection and Encryption

Organizations must ensure appropriate data protection measures when using third-party applications:

Data encryption in transit and at rest
Data classification and handling requirements
Regular data backup and recovery testing
Data minimization principles to reduce exposure risk

Regulatory and Compliance Framework

Australian Regulatory Environment

Organizations operating in Australia must comply with various regulatory requirements that impact third-party vulnerability management:

Privacy Act 1988: Requires organizations to implement reasonable security measures to protect personal information, including when processing is outsourced to third parties.

Security of Critical Infrastructure Act 2018 (SOCI Act): Imposes specific security obligations on critical infrastructure entities, including requirements for managing cyber security risks associated with third-party providers.

Australian Cyber Security Strategy 2023-2030: Emphasizes the importance of supply chain security and encourages organizations to implement robust third-party risk management practices.

International Standards and Frameworks

NIST Cybersecurity Framework 2.0⁷: Provides comprehensive guidance for managing cybersecurity risks, including specific recommendations for supply chain risk management.

ISO/IEC 27001: Includes requirements for supplier relationship security and information security in supplier relationships.

COBIT 2019: Provides governance and management objectives specifically addressing third-party service management and vendor risk management.

Industry-Specific Considerations

Healthcare Sector

Healthcare organizations face unique challenges in third-party vulnerability management due to the critical nature of their services and strict regulatory requirements. The sector must balance the need for interoperability with robust security controls while ensuring patient safety and data privacy.

Financial Services

Financial institutions must comply with stringent regulatory requirements while managing complex third-party relationships. The interconnected nature of financial services infrastructure means that vulnerabilities in one institution can potentially impact the broader financial system.

Government and Critical Infrastructure

Government agencies and critical infrastructure operators face advanced persistent threats and must implement enhanced security measures for third-party relationships. These organizations often have additional regulatory obligations and may be subject to more sophisticated attack methods.

Technology Solutions and Tools

Vulnerability Management Platforms

Modern vulnerability management platforms provide comprehensive capabilities for managing third-party application vulnerabilities:

Automated vulnerability discovery and assessment
Risk-based prioritization of remediation activities
Integration with third-party threat intelligence feeds
Reporting and analytics for compliance and risk management

Security Information and Event Management (SIEM)

SIEM solutions play a crucial role in monitoring third-party applications and detecting potential security incidents:

Centralized log collection and analysis from third-party applications
Correlation of events across multiple third-party services
Automated alerting for suspicious activities
Forensic investigation capabilities for incident response

Cloud Security Posture Management (CSPM)

For organizations using cloud-based third-party services, CSPM tools provide:

Continuous monitoring of cloud security configurations
Automated detection of misconfigurations and policy violations
Compliance reporting and remediation recommendations
Integration with cloud provider security services

Future Trends and Considerations

Artificial Intelligence and Machine Learning

The integration of AI and ML technologies in vulnerability management is creating new opportunities and challenges:

Enhanced Threat Detection: AI-powered systems can identify previously unknown attack patterns and predict potential vulnerabilities based on code analysis and behavior monitoring.

Automated Response: Machine learning algorithms can automate certain response actions, reducing the time between vulnerability discovery and remediation.

New Attack Vectors: The adoption of AI technologies also creates new attack vectors that organizations must consider in their third-party risk assessments.

Quantum Computing Implications

The eventual development of practical quantum computing systems will have significant implications for third-party vulnerability management:

Current encryption methods may become obsolete
New quantum-resistant cryptographic standards will need to be implemented
Third-party services will need to be evaluated for quantum readiness

Regulatory Evolution

Cybersecurity regulations continue to evolve, with new requirements likely to emerge:

Enhanced disclosure requirements for third-party relationships
Stricter liability provisions for third-party security incidents
Increased focus on supply chain transparency and security

Implementation Roadmap

Phase 1: Assessment and Planning (Months 1-3)

Conduct comprehensive inventory of all third-party applications and services
Assess current vulnerability management capabilities and gaps
Develop third-party risk management strategy and policies
Establish baseline security requirements for vendors

Phase 2: Foundation Building (Months 4-9)

Implement vendor risk assessment processes
Deploy vulnerability scanning and monitoring tools
Establish incident response procedures for third-party incidents
Begin renegotiating contracts to include enhanced security requirements

Phase 3: Advanced Capabilities (Months 10-18)

Deploy advanced threat detection and response capabilities
Implement continuous monitoring and automated assessment tools
Establish threat intelligence sharing relationships
Conduct regular security assessments and audits

Phase 4: Optimization and Maturity (Months 19-24)

Optimize processes based on operational experience
Implement advanced analytics and reporting capabilities
Establish industry partnerships for threat intelligence sharing
Conduct regular program reviews and improvements

Conclusion

The management of third-party application vulnerabilities represents one of the most significant challenges facing organizations today. As the threat landscape continues to evolve and the dependency on third-party services grows, organizations must implement comprehensive strategies that address the unique risks associated with these relationships.

Success in third-party vulnerability management requires a multi-faceted approach that combines robust technical controls, effective governance processes, and strong partnership relationships with vendors. Organizations must move beyond traditional perimeter-based security models and embrace risk-based approaches that provide visibility and control across their entire third-party ecosystem.

The regulatory landscape continues to evolve, with new requirements likely to emerge that will further emphasize the importance of effective third-party risk management. Organizations that proactively implement comprehensive third-party vulnerability management programs will be better positioned to meet these evolving requirements while maintaining operational efficiency and security effectiveness.

As cyber threats continue to grow in sophistication and scale, the need for effective third-party vulnerability management will only increase. Organizations that recognize this challenge and invest appropriately in people, processes, and technology will be best positioned to navigate the complex threat landscape while maintaining the benefits that third-party services provide.

The path forward requires commitment from senior leadership, investment in appropriate technologies and expertise, and ongoing attention to the evolving threat landscape. However, organizations that successfully implement comprehensive third-party vulnerability management programs will significantly strengthen their overall security posture and resilience against cyber threats.

Sources and References

Australian Cyber Security Centre. (2024) Annual Cyber Threat Report 2023-2024. Australian Signals Directorate. https://www.cyber.gov.au/about-us/view-all-content/reports-and-statistics/annual-cyber-threat-report-2023-2024 ↩︎
Verizon. (2025). 2025 Data Breach Investigations Report. https://www.verizon.com/business/resources/Tbb1/reports/2025-dbir-data-breach-investigations-report.pdf ↩︎
VulnCheck. (2025). 2025 Q1 Trends in Vulnerability Exploitation. https://www.vulncheck.com/blog/exploitation-trends-q1-2025 ↩︎
Verizon. (2025). 2025 Data Breach Investigations Report. https://www.verizon.com/business/resources/Tbb1/reports/2025-dbir-data-breach-investigations-report.pdf ↩︎
IBM. (2025). Cost of a Data Breach Report 2025. https://www.ibm.com/reports/data-breach ↩︎
Office of the Australian Information Commissioner (OAIC). (2024). Annual-Report-2023-24. https://www.oaic.gov.au/__data/assets/pdf_file/0025/243592/OAIC_Annual-Report-2023-24_Digital.pdf ↩︎
National Institute of Standards and Technology. (2024). Cybersecurity Framework 2.0. https://nvlpubs.nist.gov/nistpubs/CSWP/NIST.CSWP.29.pdf ↩︎

At Christian Sajere Cybersecurity and IT Infrastructure, we understand the complex challenges organizations face in managing third-party application vulnerabilities. Our comprehensive vulnerability management solutions provide the visibility, control, and expertise you need to secure your entire third-party ecosystem. From risk assessment and vendor evaluation to continuous monitoring and incident response, we help you stay ahead of evolving threats and maintain robust security across all your critical third-party relationships. Let us help you transform your third-party risks into competitive advantages.

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