Building a Foundation for Strong Third-Party Risk Management

Third-party risk management is more important than ever before. If you aren’t actively managing vendor risk, you’re leaving your business exposed.

Whether you’re starting from scratch or formalizing your unwritten process, here’s how to get started with building an effective TPRM program.

Understanding Your Needs

The first step in establishing an effective TPRM program is understanding your needs, whether that’s the regulatory landscape or the most appropriate framework for your use case.

Regulatory Standards

Every industry faces different regulatory pressures and compliance requirements. Financial services organizations may need to comply with regulations like GLBA or PCI DSS, while healthcare providers must adhere to HIPAA standards. Identify all applicable regulatory frameworks that govern your business operations and data handling practices.

Security Frameworks

Your security framework should be appropriate for your industry and regulatory obligations, with widely used options including NIST, SIG, ISO 27001, and COBIT. For most organizations just starting, NIST and SIG provide immediate access to proven practices and vetted templates that streamline implementation and simplify vendor assessments.

Vendor Tiering

Not all vendors carry equal risk. So before you apply the same process to each vendor in your ecosystem, create a tiering model that will help you prioritize resources based on potential impact. For example, tier 1 vendors may be mission-critical or have access to sensitive systems and data, while lower tiers require less exposure to your data or systems.

Implementing Regular Assessment Cycles and Continuous Monitoring

A modern TPRM program requires both structured assessments and real-time visibility. Regular assessments provide comprehensive evaluations of vendor security postures, while continuous monitoring delivers ongoing visibility into emerging risks.

All vendors should be assessed at least annually, but some circumstances warrant more frequent reviews, especially for higher-tier vendors. Assessments should evaluate key domains such as data protection, access controls, business continuity, and incident response. To back these assessments up, request and review supporting materials such as information security policies, data privacy protocols, disaster recovery plans, and relevant certifications. These documents validate claims made during assessments and offer deeper insight into the vendor’s actual practices and maturity.

At the same time, continuous monitoring tools can track technical vulnerabilities, detect data exposures, and identify security control failures in real-time — catching issues that might otherwise go unnoticed for months. These tools will scan for exposed ports, outdated systems, leaked credentials, and dark web mentions of your vendors. Combined with assessment data, this reveals discrepancies between vendor claims and actual security practices, enabling your team to prioritize remediation efforts based on genuine risk rather than simply checking compliance boxes.

For example, if a vendor claims in their assessment to have strong patch management processes but your monitoring tool detects multiple unpatched vulnerabilities, this correlation exposes a gap between stated policies and actual practices.

Measuring the Success of Your TPRM Program

You won’t know how effective your TPRM efforts are unless you track them. Key indicators include reduced incidents tied to third parties, improved audit outcomes, more effective vendor decision-making, and better allocation of security resources based on actual risk.

By tracking assessment completion rates, remediation timelines, vendor risk scoring trends, and the cost of managing the program, you can demonstrate to leadership the program’s impact on your security posture.

Leveraging Modern TPRM Tools

Starting a full-fledged TPRM program may seem daunting, but these foundational elements will help make it manageable. By building a strong foundation and continuously refining your approach, you can significantly reduce your organization’s exposure to third-party risk while maximizing the value of your vendor relationships.

To make it easier, consider leveraging an all-in-one solution to third-party risk management. Modern tools can help reduce the burden of managing assessments, monitoring vendors, and maintaining records. Look for solutions that combine automation with visibility — streamlining assessments, tracking documentation, and delivering continuous monitoring from a single dashboard. They also incorporate artificial intelligence to automatically analyze vendor policy documents, comparing them against assessment responses to identify inconsistencies and emerging risks before they become critical issues.

ProcessBolt provides an end-to-end platform that simplifies vendor assessments, automates documentation workflows, and integrates continuous monitoring — giving you a complete picture of third-party risk. Whether you’re just getting started or scaling an existing program, ProcessBolt equips your team with the tools and insight needed to manage vendor risk efficiently and confidently.

Contact ProcessBolt to find out more.