Top Third Party Risk Management Trends To Follow In 2023

As organizations increasingly rely on third-party suppliers for their operations and services, the significance of effective third party risk management (TPRM) has reached new heights. With vendors, contractors, suppliers, and partners playing pivotal roles in organizational success, the benefits they bring are accompanied by considerable risks. The intricate nature of modern business operations, with its heightened complexity and interconnectedness, further underscores the necessity of TPRM.

Organizations must establish robust and streamlined TPRM programs to navigate these risks successfully. These encompass various activities, including risk identification and assessment associated with third-party relationships, implementation of risk management strategies, and continuous monitoring of vendor activities. By adopting a proactive approach to TPRM, organizations can minimize potential risks and ensure the security and compliance of their third-party relationships.

Trends To Follow For Third Party Risk Management

As we venture into 2023, several notable developments and trends are set to shape the TPRM landscape. Let’s explore some critical factors:

Harnessing Artificial Intelligence (AI) and Machine Learning (ML) for TPRM

Organizations can analyze and detect potential risks in their third-party relationships by leveraging AI and ML technologies. These innovative tools enable the identification of emerging risks and the prediction of issues before they materialize, empowering organizations to take timely and preventive measures.

Safeguarding Data Security and Confidentiality

As organizations continue to handle sensitive information, ensuring data security and confidentiality within TPRM becomes paramount. Organizations can effectively mitigate potential data security risks by demanding compliance with relevant regulations, implementing robust security measures, and incorporating appropriate contract provisions.

Navigating Regulatory Standards and Requirements

Governments and regulatory bodies are expected to introduce new standards and requirements for TPRM. Compliance with regulations related to TPRM will become increasingly important in 2023, and organizations must stay up-to-date with regulatory changes and adjust their TPRM programs accordingly.

Prioritizing Resilience

With the rising frequency and severity of natural disasters, cyber-attacks, and disruptions, organizations are placing a greater emphasis on resilience. TPRM programs must integrate strategies that address and recover from disruptions caused by third-party partners.

Enhancing Collaboration

Effective TPRM hinges on collaboration across IT, procurement, and compliance departments. Organizations can identify and address risks more efficiently and effectively by fostering stronger cooperation.

By acknowledging the growing importance of TPRM and embracing these trends, organizations can fortify their operations, protect against potential risks, and cultivate stronger and more secure third-party relationships.

Some Important TPRM Instructions To Follow

Ensuring Vendor Contract Alignment

Continuously review and enhance vendor contracts to align with evolving business needs and requirements, promoting a dynamic and mutually beneficial partnership.

Rigorous Vendor Due Diligence

Employ a meticulous due diligence process that thoroughly evaluates security and data protection practices before engaging new vendors. Regular assessments and reviews of third-party partners’ security measures are crucial for effective risk management. Utilize on-site visits, security assessments, and ongoing monitoring to verify the presence of robust security controls, safeguard sensitive information, and mitigate potential security risks.

Establishing Crystal-Clear Security Expectations

Clearly define security requirements and expectations for all vendors, ensuring their inclusion in contracts and service level agreements (SLAs).

Vigilant Monitoring of Vendor Performance

Consistently monitors vendor performance to ensure adherence to security requirements and compliance with pertinent regulations.

Implementing Robust Access Controls

Strengthen third-party risk management by conducting comprehensive risk assessments, employing multi-factor authentication, role-based access controls, and restricting access to essential resources. Regular monitoring of access activities significantly minimizes the risk of unauthorized access to sensitive systems and data.

Strategic Vendor Exit Planning

Develop a well-prepared plan for managing vendor exits, including secure data transfer protocols and systematic termination of system access.

Empowering Employees Through Training

Foster a culture of awareness and accountability by providing comprehensive training on vendor risk management best practices. Emphasize the significance of risk management, encourage adherence to best practices, and offer ongoing education to create a knowledgeable and proactive workforce that can effectively mitigate risks associated with third-party relationships.

Remaining Ahead with Industry Insights

Stay abreast of emerging vendor risk management trends and best practices, integrating them into your strategy. Engage with industry experts, attend relevant events, and stay informed through pertinent publications to maintain a proactive and adaptive approach.

Wrapping Up

Third-party risk management (TPRM) is vital in today’s interconnected business landscape. By leveraging AI and ML, safeguarding data security, complying with regulations, prioritizing resilience, enhancing collaboration, and following TPRM instructions, organizations can fortify their operations and cultivate secure relationships. At Beaconer, we offer exceptional third party risk management services, utilizing our expertise to navigate complexities, safeguard your business, and foster a secure vendor ecosystem—partner with us for unparalleled peace of mind in managing your third-party risks.