Navigating the Expanding Landscape of Third-Party Risk
In today’s dynamic business environment, organizations are achieving more with fewer internal resources by leveraging external vendors, suppliers, and service providers. While outsourcing delivers efficiency, scalability, and innovation, it also introduces significant risks that businesses must address proactively.
A Well-Trodden Path for Breaches … and Regulations
Every third party connected to your organization increases your exposure to data breaches and privacy violations. Unfortunately, many companies have learned this lesson the hard way. High-profile breaches at major corporations like GE, Marriott, Target, Sprint, and LabCorp highlight the vulnerabilities within vendor networks. The consequences are severe—customer loss, regulatory fines, legal penalties, and reputational damage.
As third-party breaches become more frequent, regulatory bodies have responded with stringent guidelines. Compliance frameworks such as the California Consumer Privacy Act (CCPA), the General Data Protection Regulation (GDPR), and the Cybersecurity Maturity Model Certification (CMMC) now require organizations to assess and monitor third-party risks diligently.
The Pandemic Raised New Questions
Beyond data security, the COVID-19 pandemic exposed vulnerabilities in global supply chains, forcing businesses to reevaluate their third-party relationships. Disruptions from natural disasters, economic instability, and geopolitical shifts have underscored the need for robust third-party risk management (TPRM) strategies. Companies must now consider:
- How their vendors handle remote workforces and regulatory mandates.
- The resilience of third-party partners in crisis scenarios.
- The adaptability of vendor policies and procedures in response to new risks.
With businesses relying more on external partnerships and the global landscape becoming increasingly unpredictable, managing third-party risk effectively is more critical than ever.
The Pain Points of Third-Party Risk Management
Doing It the Hard Way
Traditionally, organizations managed third-party risk using manual processes—spreadsheets, emails, and phone calls. Risk assessors would distribute lengthy questionnaires to vendors, collect responses, and attempt to analyze the data manually. This approach was cumbersome and inefficient, causing delays and frustration for both companies and their vendors.
A recent study found that 50% of companies still rely on spreadsheets for third-party risk management. Given that enterprises often work with hundreds—if not thousands—of vendors, it is nearly impossible to maintain accurate, up-to-date risk intelligence using manual methods alone.
Data Collection Is Just the Beginning
Even if an organization successfully gathers risk data from critical vendors, several challenges remain:
- How do you assess the quality and accuracy of the responses?
- How do you correlate responses with historical data, known breaches, and external threat intelligence?
- How do you ensure ongoing monitoring and risk remediation?
Compiling vendor risk reports is just one step—organizations must continuously analyze and act on the data to mitigate risks effectively. Meanwhile, the vendor landscape is constantly changing, making real-time monitoring essential.
Who Owns Third-Party Risk?
Managing third-party risk is a cross-functional challenge. Depending on the organization, responsibility for TPRM may fall under:
- Information Security (37%)
- IT (22%)
- Risk Management (14%)
- Vendor Management (9%)
- Legal & Compliance (6%)
With multiple departments involved, clear ownership and alignment are crucial. Without a unified approach, risk management efforts become fragmented, leading to gaps in oversight and increased exposure to vendor-related threats.
The Empowered Approach to TPRM
Empowered is transforming the way organizations manage third-party risk by offering a comprehensive, automated, and scalable solution. Our approach integrates advanced technology, industry-leading services, and a vast vendor risk intelligence network to streamline TPRM processes.
Instant Access to Vendor Risk Intelligence
Empowered provides organizations with on-demand access to a vast library of vendor risk intelligence. Our platform aggregates data from thousands of vendors, leveraging real-time insights from hundreds of thousands of sources. This allows organizations to:
- Instantly access risk scores and reports for a broad range of vendors.
- Gain visibility into both cyber and business risks.
- Request and receive new vendor assessments on demand.
Managed Services: Let Us Do the Heavy Lifting
With over 15 years of experience in TPRM, Empowered offers managed services that take the burden off internal teams. Our experts handle everything from vendor onboarding and risk assessments to ongoing monitoring and remediation tracking. This allows organizations to focus on strategic risk management while we manage the day-to-day complexities of TPRM.
A Unified TPRM Platform
Empowered’s third-party risk management platform integrates vendor onboarding, risk assessments, and threat monitoring into a single, cohesive solution. Organizations benefit from:
- Automated vendor risk assessments and compliance tracking.
- AI-driven correlation of vendor responses with external threat data.
- Prioritization and reporting of vendor risks with actionable remediation steps.
By consolidating these capabilities into one platform, organizations gain a 360-degree view of vendor risk, reducing manual effort and improving decision-making.
Real Results: How Empowered Helps Organizations Reduce Third-Party Risk
Organizations using Empowered’s TPRM solution have achieved remarkable results:
- A global pharmaceutical company reduced assessment time by 550 hours, saving significant costs and reallocating resources to strategic initiatives.
- A top-10 insurance company cut vendor onboarding and assessment time by 50%, accelerating time to compliance.
- A major U.S. insurance provider increased vendor assessments by 233% without expanding their internal risk team.
Overall, Empowered customers report an 80% reduction in vendor onboarding time, a 5x increase in assessment scalability, and an 8x increase in efficiency when using managed services.
Take Control of Third-Party Risk Today
Third-party risk management doesn’t have to be an overwhelming, never-ending challenge. With the right approach, organizations can streamline their TPRM processes, gain greater visibility into vendor risks, and make data-driven decisions to protect their business.
Discover how Empowered can transform your third-party risk management strategy. Request a demo today.
