Real-time Monitoring

The contemporary cybersecurity landscape has shifted from a model of perimeter defense to one of systemic resilience, necessitated by the increasing complexity of globalized information and communication technology (ICT) supply chains. As organizations become inextricably linked to their third-party service providers, the vulnerability of a single entity can propagate across entire sectors, as evidenced by recent high-profile breaches. In response, a tripartite regulatory and advisory structure has emerged, comprising the Cyber Safety Review Board (CSRB) recommendations in the United States, and the Digital Operational Resilience Act (DORA) and the Network and Information Security Directive 2 (NIS2) in the European Union. These frameworks collectively mandate a transition from periodic, point-in-time audits to continuous, real-time monitoring of supplier security posture. For architects of supplier auditing and monitoring platforms, these mandates define the specific telemetry, metadata, and key performance indicators (KPIs) required to maintain operational continuity and regulatory compliance.

The Evolution of the Regulatory Landscape: From Static Audits to Continuous Assurance

The genesis of modern third-party risk management (TPRM) can be traced to the realization that static questionnaires and annual audits fail to capture the dynamic nature of cyber threats. The CSRB was established following the SolarWinds incident to provide independent, authoritative histories of major cyber events and to issue recommendations that drive national and international security improvements.¹ Its findings emphasize that organizations must move beyond "compliance theater" toward actionable, evidence-based security practices.³ This philosophical shift is codified in the European Union through DORA and NIS2, which replace fragmented national rules with a unified, prescriptive framework for digital resilience.⁴

DORA focuses squarely on the financial sector, ensuring that banks, insurers, and investment firms can withstand, respond to, and recover from ICT disruptions.⁶ It introduces direct oversight of "critical" ICT third-party providers, treating them as integral components of the financial system's stability.⁴ NIS2, conversely, serves as a broad cybersecurity baseline for eighteen critical sectors, expanding the scope of regulated entities and placing a heavy emphasis on supply chain security.⁸ Together, these regulations demand that entities monitor their direct suppliers with a level of granularity previously reserved for internal systems.³

CSRB Recommendations: Anchoring Monitoring in Post-Incident Reality

The CSRB's value lies in its ability to translate the "lessons learned" from catastrophes like Log4j and the Microsoft Exchange Online intrusion into specific technical requirements.¹ The board's analysis of the Summer 2023 Microsoft intrusion highlighted a corporate culture that deprioritized security investments, leading to a recommendation that cloud service providers (CSPs) implement a "secure-by-design" philosophy and provide transparent, default audit logging without additional cost.¹¹

Logging Norms and Transparency

A recurring theme in CSRB reports is the critical importance of audit logging. The board recommends that CSPs adopt a minimum standard for default audit logging to enable the detection and investigation of intrusions as a baseline service.¹¹ For a monitoring platform, this means the real-time ingestion of logs related to identity and credential systems is non-negotiable. Furthermore, the CSRB advocates for rigorous incident and vulnerability disclosure practices, ensuring that stakeholders are informed of threats as they emerge rather than after they have been exploited.¹¹

Software Bill of Materials (SBOM) and Vulnerability Discovery

The Log4j report served as a watershed moment for software supply chain security. The CSRB recommends that organizations maintain an accurate, up-to-date inventory of technology and application assets via a Software Bill of Materials (SBOM).¹⁵ In a real-time monitoring context, this SBOM should not be a static document but a dynamic feed. Monitoring platforms must integrate with supplier build pipelines to track the "who, what, and where" of open-source components, including their provenance and dependency chains.¹⁵

The efficacy of a supplier's vulnerability management program is best measured through the Mean Time to Repair (MTTR). The CSRB suggests that organizations should not only track MTTR but also strive for continuous improvement in this metric.¹⁵ A lower MTTR indicates a supplier's ability to rapidly respond to newly disclosed vulnerabilities, such as the zero-days exploited in the MOVEit incident.¹⁶

Where t_patch is the time the patch is applied and t_discovery is the time the vulnerability was first identified.¹⁵ Monitoring platforms should visualize this trendline for each critical supplier to identify those with lagging security operations.

DORA: Prescriptive Resilience and Third-Party Oversight

DORA elevates third-party risk management from a procurement checklist to a core operational function. Financial entities are required to adopt a strategy on ICT third-party risk, which must include a policy on the use of ICT services supporting "critical or important functions".¹⁸ This strategy must cover the entire lifecycle of the relationship, from initial due diligence to ongoing monitoring and eventual exit.⁷

ICT Asset Management and Legacy Systems

Under DORA's Regulatory Technical Standards (RTS), financial entities must implement a robust ICT asset management policy.⁶ This policy mandates the recording and monitoring of end-dates for third-party support services, particularly for critical systems.⁶ Real-time monitoring platforms should track these support lifecycles to prevent "legacy risk," where unsupported systems become easy targets for attackers. Additionally, the RTS requires automated vulnerability scanning and assessments commensurate with the asset's risk profile.⁶

Encryption and Network Security Mandates

DORA is highly prescriptive regarding the protection of data. It requires encryption at rest, in transit, and "where appropriate," in use.⁶ If encryption in use is technically unfeasible, entities must implement alternative safeguards.⁶ Network security policies must include safeguards against intrusions and data misuse, with real-time monitoring of network traffic between internal networks and the internet.⁶

For monitoring platforms, this necessitates the ingestion of:

• Traffic Security Logs: Monitoring for unauthorized connections and anomalous traffic patterns.⁶
• Cryptographic Control Health: Verifying that suppliers are using industry-leading standards like AES-256 and TLS 1.3.¹⁹
• Capacity Management Metrics: Ensuring that supplier systems have sufficient performance and capacity to meet business objectives, identifying potential shortages before they cause disruptions.⁶

The Register of Information

One of DORA's most rigorous requirements is the maintenance of a "register of information" for all ICT services provided by third parties.⁷ This register must capture detailed information about the supply chain, including the "chain of ICT subcontractors" involved in supporting critical functions.⁷ Monitoring platforms should automate the collection and updating of this data, ensuring that the financial entity has full visibility into its N-th party dependencies.¹³

NIS2: The Baseline for Critical Infrastructure

The NIS2 Directive expands the cybersecurity obligations of entities in sectors like energy, healthcare, and transport. Article 21 of NIS2 requires these entities to take "appropriate and proportionate" technical, operational, and organizational measures to manage risks, explicitly including supply chain security.⁹

The Implementing Regulation (CIR 2024/2690)

For certain entities, such as cloud computing providers, DNS service providers, and managed service providers (MSPs), the Commission Implementing Regulation (CIR) provides binding technical requirements.²³ These include:

• Infrastructure Monitoring: Real-time monitoring of utility services (power, telecommunications) that support network systems. This includes reporting events that fall outside control thresholds for parameters like electricity, temperature, and humidity.²⁴
• Vulnerability Handling: Mandatory regular vulnerability scanning and timely remediation of critical security issues.²³
• Logging and Incident Handling: Comprehensive logging of security events, with recorded data including date, time, description, and supporting logs.²³

Multi-Factor Authentication and Basic Hygiene

NIS2 emphasizes "basic cyber hygiene" and the use of multi-factor authentication (MFA) or continuous authentication solutions.⁹ The directive encourages organizations to move toward "state-of-the-art" technology for threat detection and monitoring.²² For suppliers, this means monitoring platforms must verify the enforcement of MFA across all administrative and privileged access points.²⁵

Real-Time Identity and Access Management (IAM) Metrics

The CSRB's review of the Lapsus$ group highlighted that identity is the new perimeter. Threat actors successfully bypassed legacy MFA (SMS and voice-based) through SIM swapping and MFA fatigue attacks.²⁹ Consequently, real-time monitoring of supplier IAM systems is a critical component of any monitoring platform.

Phishing-Resistant Authentication and FIDO2

Organizations are urged to transition to phishing-resistant MFA, specifically FIDO2-compliant solutions that use hardware-backed keys or biometrics.²⁹ Monitoring platforms should track the percentage of supplier accounts utilizing these advanced methods versus phishable legacy methods. A "high-quality" supplier will demonstrate a 100% adoption rate of phishing-resistant MFA for all privileged access.²⁶

Privileged Access Management (PAM) and Anomalous Behavior

Privileged accounts—those with administrative or root access—represent the highest risk. Monitoring platforms should integrate with supplier PAM solutions to track:

• Orphaned Accounts: Accounts belonging to former employees or contractors that have not been deactivated. The industry standard for "dormant" status is typically 90 days of inactivity.³²
• Failed Login Attempts: A sudden surge in failed logins can indicate a brute-force or credential-stuffing attack.³²
• Unusual Access Patterns: Logins occurring outside of standard business hours or from unexpected geographic locations.²⁶
• Privilege Escalation Events: Monitoring for unauthorized attempts to elevate user rights, which often precedes a larger breach.¹⁹

The implementation of "Just-in-Time" (JIT) access—where temporary privileged access is granted only when needed—is a key metric for evaluating a supplier's maturity.²⁶

Data Sovereignty and Residency Monitoring

As data flows through a globalized cloud infrastructure, understanding where it resides is essential for legal and regulatory compliance, particularly under GDPR and the data localization laws of countries like China and Russia.³⁴

Geographic Data Mapping and Location Restrictions

Monitoring platforms must provide real-time visibility into the physical location of a supplier's data storage. Cloud providers offer "Resource Location Restrictions" to ensure that new resources are only created in approved regions.³⁶ For healthcare or financial data, monitoring should ensure that information does not move across sensitive geographic boundaries.³⁵

Access Transparency and Cross-Border Transfers

Features like "Access Transparency" provide near real-time logs of cloud provider staff accessing customer data.³⁶ Monitoring platforms should alert on any administrative access originating from regions outside the agreed-upon jurisdiction. Furthermore, the platform should track cross-border data flows, ensuring that transfers only occur between countries with an "adequacy decision" or through sanctioned legal mechanisms like Standard Contractual Clauses (SCCs).³⁴

Key real-time metrics for data residency include:

• Unauthorized Data Movement Alerts: Instant notifications if data tagged with specific residency rules is moved to a non-compliant region.¹⁹
• Data Tagging Accuracy: Ensuring that all sensitive data is correctly labeled, enabling automated enforcement of residency policies.³⁵
• Regional Infrastructure Health: Monitoring the performance of data centers in specific regions to ensure that residency requirements do not compromise system availability.³⁵

The Incident Reporting Lifecycle: 24-Hour Forensic Readiness

The defining feature of DORA and NIS2 is the strict timeline for incident reporting. The "24-hour rule" requires entities to notify authorities of a significant incident almost immediately after its detection.²⁸

Classification and Escalation

Monitoring platforms must incorporate an internal incident classification matrix that aligns with DORA's and NIS2's criteria for "significance".²⁸ An incident is generally considered significant if it causes severe operational disruption, affects a large number of users, or has cross-border implications.²⁸

The platform must track the following:

• Time to Detect (TTD): The interval between the occurrence of an incident and its detection by monitoring systems.
• Time to Notify (TTN): The interval between detection and the submission of the "early warning" to regulators. Under NIS2, this must be under 24 hours.²⁸
• Incident Resolution Rate: The percentage of incidents successfully remediated within the Recovery Time Objectives (RTOs) defined in the supplier's business continuity plan.¹⁰

Forensic and Post-Incident Improvements

Continuous monitoring must extend beyond the incident itself to the recovery phase. NIS2 and DORA require a final progress report within one month of the initial notification, including a root cause analysis and a list of corrective measures.²⁷ Monitoring platforms should track the implementation of these "post-incident improvements," ensuring that they are managed to completion and mapped back to the organization's risk register.²⁷

Network and Infrastructure Observability

Beyond IAM and vulnerability management, the real-time monitoring of a supplier's network architecture is essential for preventing lateral movement and ensuring service availability.

Segmentation Drift and Zero Trust Validation

NIS2 requires entities to enforce security policies including network segmentation.²⁰ Monitoring platforms should provide "unified visibility into policy risk," revealing overly permissive rules or redundant access control lists (ACLs).²⁰ By tracking "segmentation drift" in real-time, organizations can prove that their network controls actually work, rather than simply pointing to a policy document.²⁰

The CSRB's advocacy for Zero Trust Architecture (ZTA) highlights the need for continuous, risk-based authentication at every network layer.³⁰ A monitoring platform should track a supplier's progress against the CISA Zero Trust Maturity Model, particularly in the areas of identity, device, and network security.³⁰

Traffic Analysis and Encryption Health

Monitoring should include the analysis of network traffic patterns to detect anomalies indicative of data exfiltration or command-and-control (C2) communication. For instance, in the MOVEit incident, specialized attention was recommended for GET requests with specific parameters that indicated file exfiltration attempts.³⁷ Monitoring platforms should also verify the health of encryption protocols for data in transit, ensuring that suppliers do not fall back to insecure protocols like SSL or early versions of TLS.⁶

Building the Monitoring Platform: Architecture and Visualization

A supplier auditing and monitoring platform must synthesize these diverse metrics into a "currency of trust" for boards and regulators.²⁷ This requires more than a simple dashboard; it requires a "living, evidence-driven system" that provides real-time traceability.²⁷

Real-Time Dashboards as Primary Assurance

Regulators are no longer satisfied with "evidence on demand" gathered during an audit; they expect compliance to be visible in real-time.²⁷ A board-ready dashboard must deliver:

• Clause-to-Control Mapping: Every KPI must be tied to a specific regulatory requirement, such as NIS2 Article 21 or DORA Article 17.²⁷
• Owner and Timestamp Logging: Every action, from a risk sign-off to a patch application, must be timestamped and assigned to a named owner.²⁷
• Real-Time Action Trendlines: Evidence of ongoing progress, such as a reducing backlog of critical vulnerabilities or an increasing percentage of staff participating in security drills.²⁷

Supplier Scorecards and Continuous Validation

The platform should generate dynamic supplier scorecards based on real-time telemetry. These scorecards should categorize suppliers by risk level and track their performance against contractual SLAs and regulatory benchmarks.²⁷ Continuous validation ensures that if a supplier's security posture degrades—for instance, if their MTTR increases or their MFA coverage drops—the organization is notified immediately, enabling proactive risk mitigation.²⁰

Future Outlook: AI-Driven Monitoring and the Evolution of Supply Chain Risk

As the volume of telemetry from third-party ecosystems continues to grow, the role of Artificial Intelligence (AI) and agentic automation will become central to real-time monitoring.

Agentic AI and Autonomous Response

Modern monitoring platforms are beginning to utilize agentic AI to provide continuous visibility into risk posture and to trigger automated remediation.¹⁹ For example, if a monitoring platform detects a residency violation (e.g., data moving to an unauthorized region), an AI agent could automatically trigger a block in the cloud provider's configuration, preventing the breach from escalating.¹⁹

The Move toward "Monoculture Mitigation"

A strategic insight from the CSRB and industry leaders like Google is the risk posed by "government overreliance on a single technology vendor".³⁹ This "monoculture" increases the risk that a single breach could undermine an entire ecosystem. Future monitoring platforms may include metrics for "vendor diversity" and "interoperability," helping organizations track their exposure to any single point of failure in their digital supply chain.³⁹

Strategic Conclusions and Recommendations

The implementation of a supplier auditing and monitoring platform under CSRB, DORA, and NIS2 is not merely a technical challenge but a fundamental shift in how organizations manage trust. The transition to real-time monitoring represents the end of the "black box" supplier relationship, replacing it with a model of radical transparency and continuous assurance.

For professional peers and risk management leaders, the following conclusions are paramount:

• Identity is the Primary Control: Monitoring must focus on the transition to phishing-resistant MFA (FIDO2) and the real-time detection of anomalous behavior in privileged accounts.
• Vulnerability Management is Measured by Speed: MTTR is the definitive metric for assessing a supplier's operational maturity. This requires dynamic SBOM feeds and automated scanning.
• Resilience is an Active State: Digital operational resilience, as defined by DORA, requires continuous testing and the real-time tracking of recovery objectives.
• Regulatory Compliance requires Evidence, not just Policy: Dashboards must provide timestamped, owned, and clause-mapped evidence to satisfy the increasingly rigorous demands of EU and US regulators.

By integrating these specific items and metrics into a unified monitoring framework, organizations can build a resilient digital supply chain capable of withstanding the persistent and pernicious threats of the modern era. The cost of this oversight is significant, but as the CSRB reports demonstrate, the cost of failure is immeasurably higher. Organizations that thrive in this new regulatory environment will be those that view transparency as a strategic asset rather than a compliance burden.