Why Supply Chain is Now a Critical Cyber Risk to Organisations

For many organisations, cyber security strategy still focuses inward. Strengthening internal systems, improving employee awareness and investing in detection and response capabilities remain essential. However, these measures no longer address the full scope of modern cyber risk.

Today, some of the most significant cyber threats originate outside the organisation, entering through suppliers, contractors and service providers. As digital ecosystems grow more complex, supply chains have become one of the most attractive and least governed attack paths for cyber criminals.

Axiom GRC’s The Future of Governance, Risk and Compliance: 2026 Trends white paper highlights a critical reality for boards and GRC leaders alike. An organisation’s cyber resilience is only as strong as its weakest supplier.

Why attackers are targeting the supply chain

As organisations strengthen their own defences, attackers have adapted. Rather than breaching well-protected enterprises directly, they increasingly exploit smaller suppliers with weaker controls and limited oversight.

This trend is being accelerated by Ransomware-as-a-Service, which has dramatically lowered the technical barrier to entry for cyber crime. RaaS operates like a commercial marketplace, allowing attackers to purchase ready-made ransomware tools complete with support, tutorials and even success guarantees. The result is a sharp increase in attack frequency, particularly against small and mid-sized suppliers who may lack mature cyber security frameworks.

Once compromised, these suppliers can act as a gateway into larger organisations, bypassing perimeter controls and embedding risk deep within trusted networks.

As Axiom GRC’s cyber security specialists observe, organisations are no longer just defending their own environments. They are defending an interconnected ecosystem.

The governance gap: supplier policies without enforcement

Despite growing awareness of supply chain cyber risk, Axiom GRC’s research reveals a significant enforcement gap.

Only 42% of organisations require all suppliers to adhere to their data protection and AI policies, leaving the majority exposed to unmanaged third-party risk. Many organisations apply controls inconsistently, focusing on Tier 1 suppliers while lacking visibility into Tier 2 and Tier 3 relationships where hidden vulnerabilities often reside.

Phil Jones, COO at Vantify, Axiom GRC’s supply chain compliance ecosystem, explains:

Companies often know their Tier 1 suppliers, but not Tier 2 or 3. Hidden vulnerabilities can cause cascading disruptions, so visibility must extend over multiple tiers.

This lack of end-to-end oversight creates blind spots that cyber attackers are increasingly adept at exploiting.

Cyber risk is no longer just an IT issue

Supply chain cyber risk cuts across every element of governance, risk and compliance, from data protection and operational resilience to health and safety and regulatory compliance.

Luke Peach, Head of Information Security Operations at Axiom GRC’s cyber division, Bulletproof Cyber Security, highlights the broader implications:

Effective GRC requires building resilience through tabletop exercises, tested incident response plans, and investment in staff training to reduce the risk of a successful breach.

Cyber security cannot sit solely within IT functions. It must be embedded into wider GRC frameworks, with clear accountability, consistent controls and board-level oversight that recognises cyber risk as a strategic business issue.

From due diligence to continuous oversight

Traditional supplier due diligence, often conducted once at onboarding, is no longer sufficient. Modern supply chain cyber resilience requires continuous governance rather than point-in-time checks.

Axiom GRC’s research and practitioner insights point to four core principles:

• Mandatory cyber risk assessments for all suppliers, regardless of size or perceived criticality
• Contractual enforcement of recognised standards such as ISO 27001 and Cyber Essentials
• Ongoing monitoring, including incident reporting obligations and periodic reassessment
• Scenario testing using tabletop exercises to simulate supply chain breaches and stress-test response plans

These measures transform supply chain cyber security from a compliance exercise into a resilience capability.

Interdependency risk and cascading failure

One of the most underestimated aspects of supply chain cyber risk is interdependency. A disruption in one supplier, whether caused by ransomware, system failure or data compromise, can trigger cascading impacts across unrelated parts of the organisation.

Facilities teams, procurement functions and cyber security teams often assess risk in isolation, yet attackers exploit the connections between them. Treating supply chain risk as an interconnected network rather than a series of standalone relationships is essential to building true resilience.

A single vantage point for cyber and supply chain risk

The white paper’s findings reinforce a central message for 2026. Siloed approaches no longer work. Organisations that manage cyber, supply chain, data protection and operational risk in isolation will continue to miss critical warning signs.

By integrating supply chain governance into a unified GRC ecosystem, organisations gain a single vantage point across third-party risk. This enables earlier detection of emerging threats, clearer accountability and more confident decision-making at board level.

As cyber threats continue to evolve in scale and sophistication, resilience will depend less on how well organisations protect themselves, and more on how well they govern the ecosystems they rely on.

Read the Axiom GRC white paper, The Future of Governance, Risk and Compliance: 2026 Trends, to view insights from Axiom GRC’s 30,000 customers and expert recommendations on future-proofing your GRC.