It’s common that many businesses outsource aspects of their operations, but in doing so, they are responsible for ensuring the security posture of those external entities – which is operationally complex, to say the least. In fact, over the past several years, the topic of third-party risk, as it relates to heightened challenges around management efforts, has become a major point of discussion. This is largely due to the shift in the way that businesses engage with third parties and also how heavily they rely on their vendor ecosystem for day-to-day business functions.
According to Deloitte’s global third party risk management survey 2022, 73% of respondents reported having a high level of dependency on third parties – and that reliance is predicted to continuously increase which, in turn, means ongoing related challenges. The increase in the scope of regulatory guidance is another unending challenge that programs will always need to anticipate. Guidelines related to the way in which organizations engage and interact with third parties are not just about avoiding risk but rather making long-term risk management a strategic priority – which demands a different approach to risk identification, monitoring, and preparedness. In other words, these challenges aren’t going anywhere, so they must be addressed head-on.
Driving Value within Your Third-Party Risk Management Program
When we look at existing and newly surfaced program management hurdles and take into consideration that vendor risk management has always had nuances, you understand the need to examine and evolve the traditional approach to third-party risk management (TPRM). Deloitte’s 2022 survey reinforces this point by revealing that 87% of respondents reported experiencing disruption at the hands of their third-party engagements. So, what can you do? Well, creating a more integrated and seamless process has proven to help overcome some of these hurdles and drive more value within TPRM. This was the objective of our latest innovations to Fusion’s third-party risk management solution. Your organization should be positioned to anticipate and prepare for program challenges and threats by leveraging a comprehensive picture of your most critical third parties and connecting them to your operational ecosystem while using a real-time, data-driven approach.
To that end, let’s get into the three ways in which you can drive value within your program, as well as the entire business, in the face of ongoing challenges:
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Create a holistic view across departments to gain better collaboration, coordination, and integration within your enterprise
What we’ve seen and learned over the last few years is that disruptive events are becoming more frequent and that no organization is immune to potential threat exposure, so successfully managing your responses to these disruptions requires a coordinated approach – different from what has seemingly worked in the past. Whether it’s interdepartmental coordination to ensure that internal processes are being followed or consistent collaboration with vendors, when it comes maximizing program efforts, data sharing and connecting your third parties to your operational ecosystem is essential. In doing so, cross-functional teams have the ability to make more informed decisions to manage disruption cohesively, and it also enables increased visibility to insights that engage your entire business.
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Shift from reactive to proactive responses to avoid disruption
What’s more exhausting than being in “reactive” mode when trying to manage a multilayered process? Not only is this approach inefficient and taxing, but it can also put your organization in jeopardy of being risk compromised. Unfortunately, many risk programs rely on reactive strategies to manage risk and response. One way to avoid this is by obtaining a thorough understanding of which third parties play a critical role in your ability to deliver products or services so that you can prioritize efforts and mitigate issues before they arise. This requires appropriate tools that eliminate static data and redundant manual tasks which often lead to error. Automating key aspects of the process by, for example, collecting evidence of security controls and/or managing compliance requirements will set you on the right path to building a more proactive, resilient program.
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Leverage real-time risk monitoring and intelligence
Yes, assessments are essential to understanding how third parties govern their security practices and data privacy, but the margin for error when doing them manually is substantial – which somewhat defeats the purpose. Also, when you aren’t collecting this information in real time on an ongoing basis, the reality is that a lot can change between those static activities, leaving you vulnerable to unknown threats. This is where leveraging ongoing monitoring, along with cybersecurity and business risk intelligence, comes in to deliver a more informed and accurate vendor status. Having risk intelligence from several data sources instantaneously at your fingertips also allows you to recognize, mitigate, and manage risks quickly that could otherwise cause significant harm.
Taking the Next Steps in Your TPRM Journey
It’s time to increase confidence in your risk program by letting the right tools and intuitive data accelerate your journey to resilience. While it is tough to operate at the speed of business, the Fusion Framework® System™ and its third-party risk management solution creates efficiencies for your risk management efforts to help you keep pace as well as scale to meet future needs. Moving you away from managing third parties, which is a short-term strategy, to managing risk for long-term success is where we can help. This type of value is delivered not only to your third-party risk management teams, but to the enterprise as a whole.
Interested in learning more about Fusion’s third-party risk management solution? Please request a demo or contact your Account Manager today!
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