Best 10 Third-Party Risk Management Software For Business (2026)
We reviewed the leading third-party risk management platforms on vendor data aggregation, questionnaire quality, and continuous monitoring after onboarding. Most breaches that trace to suppliers happen after the initial assessment.
Written by
Caitlin Harris
Technical Review by
Laura Iannini
Quick Summary
Third-party and supplier risk management software helps organizations assess, monitor, and report on the security posture of vendors who have access to their systems or data. Supply chain breaches frequently trace back to vendors whose risk profile changed after initial onboarding without anyone detecting it. We reviewed the top platforms and found Mitratech Prevalent, Archer Integrated Risk Management Platform, and BitSight Security Ratings to be the strongest on vendor data aggregation and post-onboarding continuous monitoring.
Third-party risk management software, also known as vendor risk management or supplier risk management software, helps organizations assess, monitor, and manage the security risks associated with using external service providers. They provide assurance that third parties and suppliers, who have access to sensitive data, do not become a source of business disruption, data breaches, or non-compliance.
In order to do this, the strongest third-party and supplier risk management platforms provide a detailed overview of supplier risk data, which can be shared between the company and the supplier, as well as out-of-the-box workflows for assessing and analyzing supplier risk. These platforms should also enable suppliers to upload standardized documentation via a self-service portal for more efficient risk analysis and to streamline the process of managing vendor relationships. They also need to monitor changes to third-party or supplier risk, alert admins to those changes, and integrate well with other risk and compliance software for ease of management.
In this article, we’ll explore the top third-party and supplier risk management software. We’ll look at features such as supplier data aggregation, risk monitoring, and risk analysis. We’ll give you some background information on the provider and the key features of each solution, as well as the type of customer they are most suitable for.
Best Third Party And Supplier Risk Management Software Shortlist
1. Mitratech Prevalent
2. Archer Integrated Risk Management Platform
3. BitSight Security Ratings
4. LogicGate Risk Cloud
5. LogicManager Vendor Management System
6. OneTrust Vendorpedia For Enterprises
7. ProcessUnity Vendor Risk Management (VRM)
8. SecurityScorecard Third-Party Risk Management
9. Venminder
10. Whistic Vendor Security Assessment
Mitratech Prevalent is a unified third-party risk management (TPRM) platform that automates vendor risk assessment, monitoring, and remediation across the entire third-party lifecycle. The platform enables centralized control of third-party risk and compliance obligations.
Mitratech Prevalent Key Features
Prevalent supports key phases of the vendor lifecycle including sourcing, onboarding, performance management, and offboarding. It centralizes RFP/RFI workflows and consolidates ESG, reputational, cyber, and financial risk data to improve visibility during vendor selection. Intake processes are streamlined with simple forms and a centralized vendor information repository accessible across the organization. SLAs, KPIs, and KRIs are tracked in-platform to evaluate vendor performance and support compliance monitoring.
Prevalent uses risk scoring to classify vendors by inherent and residual risk. Built-in AI capabilities help auto-complete assessments, while a library of over 800 templates supports rapid evaluation. Continuous monitoring integrates external intelligence with assessment data to validate vendor controls. Offboarding tools automate contract assessments and termination procedures to mitigate post-engagement risk.
Our Take
We think Mitratech Prevalent is built for organizations facing increasingly complex vendor ecosystems. The automation, assessment tools, and lifecycle management capabilities help teams reduce manual workload while improving third-party governance.
Strengths
- Covers the full vendor lifecycle from sourcing and onboarding to offboarding
- Over 800 assessment templates with AI-powered auto-completion
- Continuous monitoring integrates external threat intelligence with assessment data
- Risk scoring classifies vendors by inherent and residual risk
- Automated offboarding tools mitigate post-engagement risk
Cautions
- Pricing not publicly available; requires contacting sales for a quote
Archer Integrated Risk Management Platform
Archer is a leading provider of IT governance, risk, and compliance (GRC) software, with a focus on enterprise risk management. With over 20 years in the market, Archer was named a Leader in The Forrester Wave for Third-Party Risk Management Platforms in Q1 2026. The Integrated Risk Management Platform is designed to give organizations a streamlined view of their supplier relationships and make it easier for them to manage vendor risk. We think it fits best for large enterprises with lots of supplier relationships who need coordinated GRC oversight.
Archer Integrated Risk Management Platform Key Features
Pre-built and customizable risk assessment questionnaires accelerate vendor evaluations, and workflows can be configured without programming skills. The Security Risk Monitoring feature delivers continuous insights into which risks are most severe, allowing security teams to prioritize remediation. Organizations can identify all existing supplier relationships and contracts and document them in a central repository, along with information on who within the business is responsible for each relationship. Performance management functionality provides key performance and SLA metrics for each third-party service. Control mapping across multiple regulatory frameworks enables a test-once approach to compliance that saves significant duplication. Archer supports both on-premises and SaaS deployment, which matters for organizations with data residency requirements.
What Customers Say
Users consistently praise the dashboards and auditing capabilities. Long-term customers report the platform eliminates the need for multiple third-party tools. With that said, periodic updates can introduce GUI issues requiring careful rollout planning, and version upgrades are effectively mandatory to maintain support and functionality. The UI can also feel dated compared to newer GRC platforms on the market.
Our Take
We think Archer suits large enterprises already running structured risk programs, with the headcount to support ongoing platform administration. The depth of customization for complex stakeholder workflows is hard to replicate, and the visualization and reporting capabilities are a particular strength. Some customizations can require technical expertise to set up effectively, so teams early in their TPRM journey may hit friction quickly. Newer platforms may offer faster time-to-value in those situations.
Strengths
- Configure workflows and processes without programming or coding skills
- Control mapping across multiple regulatory frameworks enables test-once compliance
- Supports both on-premises and SaaS deployment for data residency flexibility
- Strong dashboards and visualization for executive risk communication and audit readiness
- Central repository tracks all supplier contracts and relationship owners
Cautions
- Users report that periodic updates can introduce GUI issues requiring careful rollout planning
- Version upgrades are effectively mandatory to maintain support and functionality
BitSight Security Ratings
BitSight is a cybersecurity provider based in Massachusetts, US, that specializes in quantifying and reducing digital risk. BitSight Security Ratings was named a Leader in The Forrester Wave for Cybersecurity Risk Ratings Platforms in Q2 2026, receiving the highest possible scores across 11 criteria. The platform targets security teams that want objective, data-driven vendor risk assessments without chasing questionnaire responses. We think it’s the strongest option for teams that prioritize continuous monitoring over point-in-time assessments.
BitSight Security Ratings Key Features
BitSight monitors over 40 million organizations globally and generates a daily risk score for each vendor in your portfolio. Pre-built and custom questionnaires enable additional vendor validation alongside the automated scoring. The Portfolio Risk Matrix delivers daily risk scores and continuously monitors risk across each relationship, flagging areas where remediation should be considered. Monitoring extends to fourth-party risk as well, covering both your immediate suppliers and their vendors. The quantitative, objective reporting works well for audit evidence and stakeholder communication. BitSight also offers an Advisor service for teams that want expert help optimizing their risk assessment and remediation workflows.
What Customers Say
Users praise the reporting depth and detailed findings. Support gets high marks for responsiveness, with same-day answers being the norm. Something to be aware of is that incident notifications can lag behind public news sources, which means your team may hear about a vendor breach in the press before BitSight surfaces it.
Our Take
We think BitSight works best if your priority is ongoing vendor monitoring rather than deep point-in-time assessments. The daily scoring and fourth-party visibility give you a level of continuous insight that questionnaire-based platforms can’t match. If you need end-to-end vendor lifecycle management with onboarding and offboarding workflows, you’ll need to pair BitSight with another tool.
Strengths
- Daily risk scores across 40 million+ organizations without chasing questionnaires
- Fourth-party monitoring extends visibility into your vendors' supply chains
- Quantitative reporting simplifies audit evidence and board-level communication
- Advisor service available for teams wanting expert workflow optimization
- Responsive support team with same-day answers
Cautions
- Customers note that incident alerts can lag behind public news sources
- Focused on monitoring rather than full vendor lifecycle management
LogicGate Risk Cloud
Headquartered in Illinois, US, LogicGate Risk Cloud is a no-code GRC platform built around drag-and-drop workflow automation. LogicGate was named a Leader in The Forrester Wave for Third-Party Risk Management Platforms in Q1 2026 and has held a Leader position on G2 for 27 consecutive quarters. We think it’s a strong fit for mid- to large-sized teams that need flexibility without complexity.
LogicGate Risk Cloud Key Features
The drag-and-drop interface lets you map vendor onboarding and risk assessment workflows visually, without needing technical knowledge or coding skills. Conditional routing allows forms to branch based on how vendors answer questions, cutting manual triage. Workflows can be configured with automation for deadline enforcement and reminders, and the platform supports file upload and storage within workflows. One-click report generation with export options makes stakeholder sharing straightforward, and fully customizable dashboards provide reporting into third-party risks throughout the vendor lifecycle. The RESTful API integrates cleanly with other systems, and cloud deployment means quick setup with no infrastructure to manage.
What Customers Say
Users consistently highlight the user experience. Easy logic changes without consultants comes up repeatedly, and training and support get strong marks. The linkages between modules help drive adoption across teams. With that said, reporting output isn’t yet polished enough for direct board presentations, and executives still prefer not logging into separate systems during meetings. If your leadership expects polished exports, plan for that gap.
Our Take
We think Risk Cloud fits teams that need to iterate on workflows quickly and whose users resist heavy enterprise tools. The no-code builder is genuinely easy to use, and the vendor is transparent about product direction, which customers appreciate. If you need deep reporting customization or board-ready exports out of the box, the platform has some catching up to do.
Strengths
- Drag-and-drop workflow builder requires no coding or external consultants
- Conditional routing automates form logic and reduces manual triage
- Strong user experience drives adoption across non-technical teams
- Cloud-based deployment for quick setup and easy scaling
- Support team walks through problems directly rather than pointing to docs
Cautions
- Reviews flag that reporting output isn't polished enough for direct board presentations
- Customers note executives must log into the platform to view dashboards during meetings
LogicManager Vendor Management System
LogicManager is a market-leading provider of third-party and vendor management solutions, based in Boston, US. The platform is built for organizations that want standardized, quantitative vendor risk assessments with automated workflows and built-in risk analysis. We think the quantitative scoring and recurring assessment setup make it a solid choice for teams managing growing vendor portfolios, particularly in financial services.
LogicManager Vendor Management System Key Features
Customizable questionnaires use an industry-specific risk library to collect the right information for each vendor type. Recurring assessments keep vendor risk data current without rebuilding questionnaires from scratch each cycle. The Risk Ripple Intelligence tool uses AI to uncover hidden risks and connections across vendors, including flagging risks shared across multiple suppliers to help deduplicate remediation efforts. Intuitive data visualization dashboards provide at-a-glance reporting to inform decision-making across the organization. LogicManager integrates with over 500 business applications, including WorkDay, Microsoft 365, and accounts payable systems.
What Customers Say
Users value the ability to track operational and strategic risks in one place. Custom workflows and assignable tasks earn praise for streamlining daily work. Something to be aware of is that the platform can feel limited in customization depth for teams with more complex requirements, and certain integrations don’t go as deep as expected.
Our Take
We think LogicManager fits best if your organization operates in financial services or another regulated industry where mapping vendor assessments to compliance policies matters. The quantitative scoring and recurring assessments reduce manual overhead for teams managing growing vendor portfolios. If you need deep customization or complex workflow logic, the platform may feel constrained.
Strengths
- Industry-specific risk library for targeted vendor assessments
- Recurring assessments keep vendor risk data current without manual rebuilds
- AI-powered Risk Ripple Intelligence uncovers hidden risks across vendors
- Integrates with over 500 business applications including WorkDay and Microsoft 365
Cautions
- Users report that customization options feel limited for complex requirements
- Some integrations don't go as deep as expected
OneTrust Vendorpedia For Enterprises
OneTrust is a market leader in vendor and third-party risk management. Based in Georgia, US, OneTrust Vendorpedia targets organizations that want to cut the manual overhead of vendor risk assessments. The platform combines a Third-Party Risk Exchange with pre-completed assessments, automated risk scoring, and real-time monitoring, replacing the work of building, distributing, and chasing questionnaires. We think the pre-completed assessment model is a real differentiator for teams managing large vendor portfolios.
OneTrust Vendorpedia For Enterprises Key Features
The Third-Party Risk Exchange provides access to pre-completed, industry-standard risk assessments for over 6,000 global vendors. OneTrust validates all assessments to ensure accuracy, and they’re automatically updated when vendors update their risk information, so organizations are always working with the most current data. The Auto Inherent Risk feature assigns each vendor a risk score based on severity and engagement level, triaging and prioritizing risks without manual effort. The platform maps to frameworks including NIST, SIG, CSA CAIQ, ISO, FedRAMP, GDPR, CCPA, and NYDFS. Integrations with RiskRecon, SecurityScorecard, and HackNotice provide over 20 million cyber risk data points for continuous monitoring. Near real-time alerting keeps teams informed of new risks across their vendor portfolio.
What Customers Say
Users praise the ease of deployment and the flexibility to use pre-built vendor questionnaires or create their own. Integration with security posture management tools is a highlight. With that said, the UI can be unclear when searching for specific items, which slows navigation for newer users getting oriented in the platform.
Our Take
We think OneTrust Vendorpedia fits best if you want to reduce the manual work of vendor risk assessments while maintaining depth. The pre-completed assessment exchange is a real time-saver. For organizations already in the OneTrust ecosystem, adding Vendorpedia keeps third-party risk management under one roof. Flexible pricing makes it accessible from mid-market to enterprise scale.
Strengths
- Pre-completed risk assessments for 6,000+ vendors eliminate manual questionnaire creation
- Auto Inherent Risk scoring triages vendors by severity and business engagement level
- Maps to NIST, SIG, ISO, FedRAMP, GDPR, CCPA, and NYDFS frameworks
- Real-time alerting with 20 million+ cyber risk data points
Cautions
- Reviews mention the UI can be unclear when searching, slowing navigation for newer users
ProcessUnity Vendor Risk Management (VRM)
ProcessUnity is a GRC provider based in Massachusetts, US, that offers flexible, tiered pricing plans, an intuitive interface, and high levels of customization. ProcessUnity was named a Leader in the 2026 Forrester Wave for Third-Party Risk Management. The platform covers the full vendor lifecycle from onboarding through continuous monitoring and targets mid-sized to large organizations in regulated industries, particularly financial services.
ProcessUnity Vendor Risk Management (VRM) Key Features
The Vendor Request Form automates initial vetting and risk assessments for new vendors. Risk scoring classifies vendors by criticality and data access level, which helps prioritize the review queue. Continuous monitoring runs via automated questionnaires with built-in reminders and completion notifications for both the business and the vendor. The AI-powered Assessment Autofill feature, introduced in 2025, reduces manual effort on questionnaire responses. Customization is strong at every level; organizations can configure workflows, assessments, and reports to their specific processes, including mapping to regulatory compliance requirements. Out-of-the-box configurations are available for smaller organizations, while larger enterprises benefit from granular customization options.
What Customers Say
Users in banking and finance consistently praise the interface, with several noting it fits better than heavier enterprise GRC platforms for mid-market needs. The ability to eliminate manual processes and coordinate with internal and external stakeholders gets positive marks. Something to be aware of is that update patches can overlap with existing configurations, and thorough UAT testing is recommended before production deployment.
Our Take
We think ProcessUnity fits best if compliance mapping matters to your program. Financial services teams get clear value from the regulatory alignment features, and the AI-powered Assessment Autofill is a genuine time-saver. If you just need basic vendor tracking, the depth here may exceed your requirements.
Strengths
- Risk scoring by criticality and data access helps prioritize vendor reviews
- Compliance mapping to regulatory frameworks suits financial services well
- AI-powered Assessment Autofill reduces manual effort on questionnaires
- Granular customization at workflow, assessment, and reporting levels
- Tiered pricing with out-of-the-box configurations for smaller organizations
Cautions
- Customers note that update patches can overlap with existing configurations
- Thorough UAT testing needed before production deployment
SecurityScorecard Third-Party Risk Management
SecurityScorecard, based in New York, US, provides external security ratings for risk and compliance monitoring, due diligence, cyber insurance underwriting, and executive-level reporting. The platform analyzes data across ten risk categories and assigns letter-based scores from A to F, and can be used to assess an organization’s own security posture or those of third parties, vendors, and suppliers. SecurityScorecard launched TITAN AI at RSA Conference 2026, bringing threat-informed automation to TPRM programs. We think it’s the strongest option for teams that want an objective, data-driven view of vendor security posture.
SecurityScorecard Third-Party Risk Management Key Features
The ten-factor scoring model covers categories including social engineering, patching cadence, and DNS health. Each organization gets a letter grade based on these factors and their severity, giving teams a consistent way to benchmark vendors against each other. Businesses can dispute scores and submit evidence of remediation; SecurityScorecard updates corrected scores within four to seven business days. A free tier is available for organizations assessing up to five suppliers, while the enterprise version adds fourth-party detection, consulting services, API integrations, and self-monitoring reporting. The platform also enables businesses to send and receive security risk questionnaires and compliance documentation alongside the automated scoring.
What Customers Say
Users highlight the ease of getting up and running, with self-guiding setup that works for risk teams at any maturity level. Reporting flexibility and prompt breach detection notifications earn consistent praise. With that said, false positives occasionally surface, requiring time to submit disputes and get them resolved.
Our Take
We think SecurityScorecard fits best if you want an objective, external view of vendor risk that doesn’t depend on questionnaire responses. The letter-based scoring makes it easy to communicate risk to stakeholders who aren’t security specialists. If end-to-end vendor lifecycle management is what you need, this isn’t that platform. But for continuous, data-driven risk visibility across your supply chain, it’s a strong pick.
Strengths
- Ten-factor scoring model provides consistent, objective vendor risk benchmarking
- Letter-based grades make risk accessible to non-technical stakeholders
- Free tier available for organizations assessing up to five suppliers
- Score dispute and correction process keeps ratings accurate
- Can assess the organization's own security posture alongside third parties
Cautions
- Reviews flag that false positives occasionally surface, requiring time to dispute
- Focused on external ratings rather than full vendor lifecycle management
Venminder
Based in Kentucky, US, Venminder combines vendor risk management software with human expertise from a team of risk analysts. Trusted by over 1,200 organizations, the platform targets mid-sized and large teams in regulated industries who want expert review of vendor documentation, not just storage. The model offloads document collection and analysis to Venminder’s team, which is a meaningful differentiator. We think it’s the best option for teams that value human analysis alongside their software.
Venminder Key Features
Venminder has pre-established relationships with thousands of vendors; their team retrieves audit reports, business continuity plans, Certificates of Insurance, and security test results directly, so organizations skip the back-and-forth with vendors. Every document is reviewed by the Document Collection team for accuracy, with reports including controls, risk ratings, and specific remediation recommendations to help meet relevant regulatory standards. Venminder’s experts deliver over 30,000 risk-rated assessments annually. Automatic alerts notify teams when documents are updated, and contract renewal reminders help prevent renewals from slipping through. Regulatory mapping is built in for financial services and other heavily regulated sectors. The platform deploys in the cloud and is available via the AWS Marketplace.
What Customers Say
Users consistently praise the support team, with long-term customers describing them as partners rather than just tech support. Contract renewal reminders get high marks from vendor management leads. The platform is configurable and receives regular updates based on user feedback. Something to be aware of is that repetitive data entry across multiple sections of the platform slows initial data input.
Our Take
We think Venminder is a strong supplier risk management tool for organizations in heavily regulated industries such as finance, and those that prefer human intelligence and support alongside automation. The document collection service alone justifies the platform for teams tired of chasing vendors for SOC reports and insurance certificates. If you prefer pure automation with minimal vendor interaction, look elsewhere.
Strengths
- Pre-established vendor relationships mean you skip document collection entirely
- Human analysts review every document and provide risk ratings with recommendations
- Over 30,000 risk-rated assessments delivered annually
- Contract reminder functionality prevents renewals from slipping through
- AWS Marketplace availability for streamlined procurement
Cautions
- Users report repetitive data entry across multiple sections of the platform
- Review dates don't auto-populate, requiring manual scheduling of follow-ups
Whistic Vendor Security Assessment
Headquartered in Utah, US, Whistic flips the traditional vendor assessment model. Instead of chasing questionnaires, vendors publish security profiles that you access on demand through the Trust Center Exchange, which now covers over 90,000 pre-assessed company profiles. Whistic launched the next generation of its Assessment Copilot in 2025, integrating AI into the vendor assessment process for a fully automated workflow. We think it’s a strong fit for teams tired of the questionnaire back-and-forth who want faster access to vendor security data.
Whistic Vendor Security Assessment Key Features
Vendors create Whistic Profiles containing certifications, audits, and security documentation, which eliminates the need for customers to create, send, or chase questionnaires. The Trust Center Exchange gives teams access to security data on over 90,000 organizations. Templates cover NIST, GDPR, and ISO standards among many popular formats. The platform calculates risk scores and triggers automatic re-assessments for each vendor. The AI-powered Assessment Copilot automates the collection and review of vendor security documentation, and the Trust Center Capture feature uses AI agents to gather vendor security information automatically. SaaS deployment makes it accessible from anywhere.
What Customers Say
Users consistently praise the support team; multiple reviewers note the level of assistance goes beyond what most vendors provide. The intuitive interface and feature depth get positive marks. With that said, customization options are limited for mature VRM programs, and reporting and configurability constraints become more noticeable at scale.
Our Take
We think Whistic fits best if your priority is fast access to vendor security data. The profile-based model works well for organizations with many vendors to assess quickly, and the AI-powered Assessment Copilot adds genuine automation. If you need heavy customization or advanced reporting, the constraints may become a problem as your program matures.
Strengths
- Vendor profiles eliminate questionnaire creation and follow-up entirely
- Trust Center Exchange provides security data on 90,000+ organizations
- AI-powered Assessment Copilot automates the vendor assessment workflow
- Support quality consistently exceeds expectations
Cautions
- Customers note that limited customization options constrain mature VRM programs
- Reviews mention reporting and configurability become limitations at scale
How We Compared The Best Third Party And Supplier Risk Management Software
We evaluated third-party and supplier risk management platforms on their assessment library depth and customization options; vendor lifecycle management coverage from onboarding through offboarding; continuous monitoring capabilities; framework mapping for regulatory compliance; ease of deployment; reporting and dashboard quality; customer support; and pricing model transparency. We also considered recent acquisitions, AI-powered features, and analyst recognition for each platform.
What To Look For In Third Party And Supplier Risk Management Software
Assessment flexibility is the starting point: look for platforms with customizable questionnaire templates and industry-specific risk libraries that match your vertical. Vendor lifecycle management determines whether one tool can handle onboarding, ongoing monitoring, and offboarding, or whether you’ll need to supplement it with point solutions. Continuous monitoring matters if you can’t rely on periodic questionnaires alone; look for platforms that pull in external data on cyber threats, regulatory changes, and financial risk in real time. Framework mapping to NIST, SIG, ISO, FedRAMP, GDPR, and sector-specific requirements reduces duplicate effort if your program needs to satisfy multiple compliance obligations. Reporting and dashboard quality affects how well you can communicate risk to leadership and auditors. Consider whether the platform offers pre-completed assessments from an existing vendor network, which eliminates significant manual questionnaire work. Finally, evaluate managed service options if your team doesn’t have the capacity to run a full TPRM program in-house.
The Bottom Line
The right third-party and supplier risk management platform depends on your organization’s size, vendor portfolio complexity, and compliance obligations. For large enterprises with complex multi-department risk programs, Archer and Mitratech Prevalent offer the deepest lifecycle and governance coverage. LogicGate and ProcessUnity suit mid-market organizations that need customizable workflows without enterprise implementation overhead. For teams prioritizing continuous external monitoring over questionnaire-based assessments, BitSight and SecurityScorecard are the strongest picks. OneTrust Vendorpedia reduces manual effort through pre-completed assessments, and LogicManager fits financial services teams mapping vendor risk to compliance policies. Venminder is the standout choice for organizations that want human analyst expertise alongside their software, and Whistic works best for teams that want fast access to vendor security profiles without the back-and-forth of questionnaire collection.
FAQs
Third Party Risk And Supplier Management: Everything You Need To know (FAQs)
The success of a TPRM solution depends on how effectively it can identify risks across your entire business lifecycle with associated third parties. The way these risks are identified, understood, and categorized is very important. Generally, risks are classed as known or unknown risks. Unknown risks are risks that are from external factors, like a data breach performed by a hacker. This is unknown as the exact nature of the risk cannot be known and you are unable to predict when it will occur. Known risks are risks that can be identified and described; this means that they are easier to prevent. Known risks tend to be classified into three groups:
- Profiled Risk: This risk refers to the services that a third party provides for your organization. For instance, an outsourced HR or payroll company can present more risk to your business than a catering company due to the nature of the data that it has access to. For example, the HR and payroll company will have access to highly sensitive financial and personal data. The catering company, however, may not have such extensive information, but presents a physical risk as third-party staff will have access to your premises. Risks aren’t always as clear cut and can be layered and complex.
- Inherent Risk: Inherent risk refers to a third-party risk that is present and hasn’t yet been remediated. Inherent risk is calculated by using a third party’s own data on their policies and practices to make a more informed risk assessment. This will include identifying pre-existing supply chain issues, bad financial standing, and operational inefficiencies. Internal risk assessments are important in adding context and clarity to an assessment; they may, however, still not paint a comprehensive picture of a company’s risk posture. External risk assessments can help to fill in these gaps. External vendor risk monitoring and threat intelligence services can help companies to verify assessment responses and identify any unknown or hidden risks.
- Residual Risk: This term refers to any risks that are still present despite remediation efforts. As these risks are impossible to eliminate, you will have to make a judgment to decide if this is a reasonable and justifiable level of risk. Rather than being able to eliminate a risk, you will have to focus on reducing risk to an acceptable level. In this instance, it is important to establish a risk baseline with relevant controls and monitors in place.
TPRM tends to work in stages. This begins with creating a baseline of security, reputational, financial, and privacy risks for potential and current third parties. Ideally, this is performed before a relationship with a third party is established. This is often achieved through questionnaire-based assessments and accessing vendor intelligence databases, then pulling information from these sources.
The vendors that you decide to work with will be onboarded into the TPRM platform’s central repository. From here risks can be monitored and calculated continuously. You can also export data regarding risk and mitigation to relevant stakeholders.
Inherent risk scoring will also be carried out. This allows organizations to understand any potential risks that they might take on, as well as enabling teams to carry out due diligence and inform future risk assessments and mitigation practices. It is considered best practice to complete inherent risk scoring before a vendor is granted access to your system, data, or physical building.
From the TPRM platform, internal controls and assessments can be performed to satisfy audit requirements. Any risks that are identified during this process can be scored, recorded, and mapped, ensuring that your organization remains complaint with security frameworks. External risk monitoring is also performed to cover gaps between periodic assessments and questionnaire responses. This information can be cross-referenced against external observations, thereby enhancing the clarity of a risk assessment. External risk monitoring usually includes using cyber intelligence, financial reports, media screening, sanction lists to gain a comprehensive and holistic understanding of risk.
Finally, Service Level Agreements (SLAs) and performance management will be factored in. SLAs are contractual agreements that help to define the expectations and obligations of all parties within a vendor relationship. A TPRM tool can ensure that these obligations and expectations are met and carried out to the required standard. This often includes ensuring that the third-party vendor continues to meet compliance requirements.
In the event that a third party needs to be off boarded or terminated–either because their level of risk was deemed too severe, or the contract has naturally ended–several things need to happen. Depending on the nature of the termination, assessments need to be performed to ensure that final obligations have been achieved. In this event, contract reviews, revocation of system and data access, revoking building access, settling invoices, and compliance reviews will need to be completed. It is just as important that you ensure all the loose ends are tied up to prevent a threat coming via a company you thought you were finished with.
It is worth pausing to consider how many third parties your organization has. Every company that you use for outsourcing, collaborate with, have partnerships with is a third-party that has the potential to impact your organization. This is set against a backdrop of increasing cybersecurity threats and lateral attacks. Today, companies are more interconnected and linked than ever before. In part, this is due to outsourcing and specialization; it is more efficient and cost effective for a company to do one thing really well, then use other specialized companies to deliver a full package. One company could well have numerous third parties working with them to provide a service and streamline operations.
In many instances, a company may not even be the vendor that produces the primary output and will liaise with a number of other vendors in order to produce a final product. For instance, an architecture firm will need to be in contact with multiple third parties at once, including suppliers, builders, electricians, lighting specialists, legal teams, and financiers. Not only that, but the firm may outsource other aspects of their business, such as HR, marketing, and communications to external agencies.
While outsourcing can save time, money, and HR burden, this interconnectedness does increase risk. For instance, if a company that produces sheet glass experiences a cyber breach and has details and contacts stolen, this presents a risk for the architecture firm and building company that were liaising with them at the time, as well as historic customer whose details are on record.
Gaining control over your connections with your third-party organizations and limiting severity of risk can greatly enhance your overall security standing and risk scoring. Risk from third parties isn’t a new concept. It is today’s level of interconnectedness that highlights the need for TPRM to prevent these links being exploited.
There are several benefits to implementing a TPRM solution and framework within your work environment. In this next section we will break down the key benefits and explain why they are relevant.
Improved Security
Through implementing and monitoring third-party risk management tools, organizations can secure themselves from risks and insulate themselves from events that occur within a third-parties jurisdiction. If a hacker is able to gain access to your third party’s network, then a lateral move to your organization is also likely. In the event a third party is hacked, there is the risk that your data will be compromised; this could lead to your operations being impacted and having to cease until the issue is resolved. Having a robust TPRM solution in place can help to manage and mitigate third party risk oversight and protect your business to improve your overall security posture.
Streamlined Operations
By improving your security posture and reducing the likelihood of downtime as a result of a security event, you are able to better utilize your time. This ensures that you can streamline operations, thereby making your organization more effective. By understanding the likelihood of downtime or a specific risk, you can build mitigation plans to circumvent any issues and return to business operations swiftly.
Reduced Costs
Outsourcing is one way that many businesses can reduce costs. However, if a provider suffers an attack, the cost of remediating this and the value of lost business could easily eclipse the savings made through outsourcing. By using TPRM to identify and manage risks before they affect your business can prevent these exorbitant costs. IBM announced in their 2023 Cost of a Data Breach Report that a successful attack sets a company back by an average of USD 4.45 million.
Compliance Requirements
Some regulatory bodies have made vendor risk management a prerequisite in order for companies to be compliant and allowed to operate within a particular sector. Some of the best known of these includes GDPR and CCPA. Failure to comply with these requirements (and have the relevant TPRM solution in place) will often result in a fine. Other industry regulations such as NYDFS, PCI-DSS, and HIPAA take a different approach. They do not specifically ask for vendor risk management but do require compulsory risk assessments as part of the wider compliance process.
Protects Your Brand Image
It doesn’t always matter how severe a breach is, to a potential or current customer, any breach looks bad. Failure to assess and understand your vendors’ and third parties’ levels of risk can potentially expose you to data breaches and losses, which, in turn, harms your brand’s reputation. Companies that have experienced a breach, even if it isn’t directly their fault, can still damage customer confidence. As TPRM reduces the risk of a breach, it decreases the chance of your likelihood of brand image being adversely affected.
Like every established security space, third party risk management has a large and evolving market with a good number of effective vendors and solutions to choose from. That said, it can be difficult to identify the best solution for your needs. Before deciding or purchasing a solution, it is worth taking the time to understand and plan what you need from a TPRM solution. You should consider what you want to get out of it, how well it will integrate into your workflow and environment, its ease of onboarding, and how you can best use the information gained from its analysis. Depending on your sector, size, location, and industry, there will be different risks facing your organization. Common demands on a TPRM include ensuring business continuity, data management, supply chain, anti-corruption, anti-money laundering, and anti-bribery. Some solutions will be particularly suited to a certain sector or type of company.
Building an effective and successful third-party management risk solution takes time and expertise. This will involve a lot of planning on your IT team’s behalf in order to ensure relevant risks are identified and flagged effectively.
Here are some key features to look out for and take into consideration when making a purchase:
- Questionnaire Library: Some solutions will come with a built-in questionnaire library. This allows admins to gather data from vendors and ensure that they adhere to regulatory requirements and industry best practices.
- Customizable Questionnaires: In addition to having a questionnaire library, where teams can perform generic questionnaires, companies should be able to customize the questionnaire so that it is relevant to their industry. Some solutions allow you to edit existing questionnaires, some let you create entirely new ones from scratch, while others make both possible.
- Reporting: This is a key function of TPRM solutions; admins need to access and understand findings, then share these with relevant stakeholders. Reports should allow teams to make actionable decisions based on findings. This process should be quick to carry out, while providing a good level of detail and insight.
- Remediation Workflows: A solution that has a remediation workflow feature allows users to be able to request remediation from a specific third party based on intelligence from automated scanning and any completed questionnaires. Users will also be able to view current remediation requests, what risks were asked to be remediated, and timestamps of when the request was sent. This allows overall security to improve.
- Scalability: Ideally, your chosen solution should grow as you do. As companies mature, change, and adapt, they’re more likely to take on additional third-party vendors. It’s important that your TPRM solution can grow as you do, all the while maintaining coverage.
- Monitoring: Your TPRM solution needs to monitor risks and events constantly. After initial risk scans, security posture should be continuously monitored to confirm that there have been no further changes or developments.
- Automation: Automated or scheduled scans and remediation processes can reduce human tasks, while maintaining standards.
- Security Ratings: Through data analysis, relative scores can be calculated to put risks into perspective and prioritize responses.
- Fourth Party Discovery: This is a more advanced feature that will uncover the third parties of your third parties. While your organization may not deal with a fourth party directly, they can impact a third party, which could then impact you. While this may sound very far removed, lateral attacks mean that this is very possible. An example would be that multiple of your vendors use a particular cloud data storage solution; if this storage service becomes hacked and suffers downtime, not only will it impact your third parties, but it will impact your business as well.
- Accuracy: While less of a specific feature and more of an attribute, it’s important that your chosen third-party risk management solution is highly accurate. It’s important that the data it aggregates is accurate and that any security ratings used must adhere to fair and accurate standards of security ratings. Information should be independently verifiable and easily accessible.
- Confidentiality: Again, less of a feature and more of a trait but finding a TRPM vendor that takes confidentiality seriously is a must. All information from your business, your risks, how you operate, and the risks and operations of your associated third parties, must be kept in strict confidence. Ironically, if this information was shared, it could put your organization at risk.
Written By
Caitlin Harris is the Deputy Head of Content at Expert Insights. As an experienced content writer and editor, Caitlin helps cybersecurity leaders to cut through the noise in the cybersecurity space with expert analysis and insightful recommendations.
Prior to Expert Insights, Caitlin worked at QA Ltd, where she produced award-winning technical training materials, and she has also produced journalistic content over the course of her career.
Caitlin has 8 years of experience in the cybersecurity and technology space, helping technical teams, CISOs, and security professionals find clarity on complex, mission critical topics like security awareness training, backup and recovery, and endpoint protection.
Caitlin also hosts the Expert Insights Podcast and co-writes the weekly newsletter, Decrypted.
Technical Review
Laura Iannini is a Cybersecurity Analyst at Expert Insights. With deep cybersecurity knowledge and strong research skills, she leads Expert Insights’ product testing team, conducting thorough tests of product features and in-depth industry analysis to ensure that Expert Insights’ product reviews are definitive and insightful.
Laura also carries out wider analysis of vendor landscapes and industry trends to inform Expert Insights’ enterprise cybersecurity buyers’ guides, covering topics such as security awareness training, cloud backup and recovery, email security, and network monitoring. Prior to working at Expert Insights, Laura worked as a Senior Information Security Engineer at Constant Edge, where she tested cybersecurity solutions, carried out product demos, and provided high-quality ongoing technical support.
Laura holds a Bachelor’s degree in Cybersecurity from the University of West Florida.