Panorays 2026 Report: 85% of CISOs Admit They Are 'Flying Blind' on Supply Chain Risk

A new study released this week by third-party risk management firm Panorays reveals a widening chasm between cyber threats and organizational readiness. The 2026 CISO Survey, which polled security leaders across major global enterprises, found that while 60% of organizations reported a confirmed rise in third-party breaches over the last year, a staggering 85% of CISOs admit they lack full visibility into their vendor ecosystem.

This "visibility gap" has become the primary anxiety for governance professionals, who are now tasked with securing a perimeter that no longer physically exists. The report suggests that the complexity of modern software supply chains—where vendors rely on sub-vendors (fourth-party risk)—has outpaced the ability of traditional tracking methods to keep up.

The report identifies a dangerous new variable driving this opacity: "Shadow AI." This refers to the unauthorized or undisclosed use of generative AI tools embedded deep within third-party software products. According to the data, fewer than 25% of organizations currently have a formal validation process for these "embedded" AI models. This creates a massive regulatory blind spot where sensitive corporate data may be processed by unvetted algorithms without the knowledge of the compliance team. For GRC leaders, this is a nightmare scenario: you may have vetted Vendor A, but if Vendor A utilizes a hallucinating or insecure AI model from Vendor B to process your data, your organization remains non-compliant and exposed.

In response to these findings, the industry is seeing a rapid pivot away from legacy compliance tools. The survey indicates that the traditional "annual questionnaire" model of compliance—long the industry standard—is effectively dead. It is being replaced by AI-driven, continuous monitoring platforms that can map digital assets in real-time. Panorays’ research highlights that organizations failing to automate their third-party risk management (TPRM) are not just falling behind; they are becoming active targets. The consensus from the 2026 data is clear: without automated visibility into "Nth-party" relationships, CISOs are fighting a losing battle against an increasingly interconnected and automated threat landscape.