Identifying Opportunities in the Enhancement of an Organization's Third-Party Risk Posture

Abstract

As organizations increasingly rely on third-party entities, managing third-party risks has become crucial for overall risk governance. This chapter explores third-party risk management (TPRM), highlighting past events, challenges, opportunities in due diligence, and evolving strategies for safeguarding organizational interests in a complex, interconnected business landscape. The study reviews the current state of TPRM, recent security breaches, and challenges in managing third-party risks. It identifies common pitfalls and gaps in existing frameworks, focusing on due diligence processes, risk assessment, and mitigation techniques. Insights into various third-party risks, including cybersecurity vulnerabilities, data privacy concerns, and regulatory compliance, are provided through an extensive literature review and case analyses. Additionally, the chapter examines the role of technology, agreements, and key indicators in enhancing TPRM practices, aiming to streamline risk assessments and response mechanisms.