The method by which a firm manages the risk of conducting business with people outside the organization is known as third-party risk management. It is typically used to evaluate third parties in the sales force or distribution network, as third parties can be a significant source of risk. For instance, most bribery charges do not include cash subsidies from corporations to government officials; the payment is made via a third party.
Companies with international operations cannot escape risks by relying on other parties. They can, however, identify and manage these risks, and if done correctly, they begin by recognizing the third parties who expose them to the greatest danger.
Challenges in Third-Party Risk Management
On the other hand, working with third-party providers entails a measure of risk, which necessitates caution, trustworthiness, and risk management.
Herein is the issue. Managing hundreds of suppliers with more specialized and specialist competencies is extremely difficult, and companies must include these vendors in their risk profiles. Relationships between vendor roles and internal company capabilities can produce vulnerabilities and risks destabilizing a firm in multiple areas of emphasis.
As a result, many businesses are turning to third-party risk management (TPRM) to assist them in working better and more effectively with their contractors.
Importance of Third-Party Risk Management
Third parties can create security breaches, although they are required for many organizational operations. Fortunately, there are procedures that businesses and organizations may implement to increase third-party security. Your firm may avoid potential complications from these collaborations by using security measures such as monitoring risk indicators and third-party inventories.
When searching for ways to improve third-party security, leveraging automation via third-party financial institutions and technologies is a viable choice. Depending on third parties may be risky; thus, implementing third-party risk management is critical to an organization's safety and profitability.
Predict360 TPRM/VRM Solution
Ensure business continuity with your vendors and third parties using Predict360’s Vendor Risk Management System. Use Predict360 to mitigate the severity of data breaches involving Third Parties, protecting the Organization’s sensitive data that is shared with third parties and streamlining all Vendors, suppliers, and third parties with just a few clicks of a button. The application enables organizations to monitor and mitigate risk exposure from vendors and consultants by ensuring compliance with applicable policies and procedures, regulatory requirements, and standards.
Predict360 Third Party and Vendor Risk Management manages internal activities associated with vendors and third parties and features:
- Configurable internal Assessments (questionnaires) for internal departments for vendor due diligence to manage external vendors.
- External Assessments for non-system users (third parties and vendors) that capture relevant information about vendor activities with a review workflow.
- Integrated Administration screens to configure Vendor assessments, their types, and vendors’ products and services.
- The ability to configure Vendor Risk Analysis Dimension for Vendor Risks that categorize vendors by risk levels.
- A Vendor Risk Register that captures all necessary information regarding vendors, where multiple documents can be linked and Vendor Risk Assessments can be initiated. It enables users to create, assign, track and manage any action item or task related to a vendor.
- A workflow process for Vendor Risk Assessments that assigns tasks with due dates and notifications to be reviewed by internal Vendor owners, with the information captured on the Vendor Risk Register having linked compliance questionnaires/checklists to assess it.
- The ability to store all vendor documentation in a dedicated, centralized, and easy-to-access location.
About 360factors Inc.
360factors empowers organizations to accelerate profitability, innovation, and productivity by predicting risks and streamlining compliance. Predict360, its flagship software product, is an AI-powered Risk and Compliance Intelligence Platform that anticipates and mitigates risks while facilitating regulatory compliance. Predict360 integrates regulations and obligations, compliance management, risks and controls, audits and assessments, policies and procedures, and training in a single cloud-based SaaS platform based on artificial intelligence to provide predictive analytics and unique insights for predicting risks and streamlining compliance. 360factors is the exclusively endorsed solution provider for compliance management by the American Bankers Association (ABA). Visit www.360factors.com for more information.