Third-Party Risk Management

What is third-party risk management - and why it matters?

Third-Party Risk Management (TPRM) is the process of identifying, assessing and managing risks associated with suppliers, partners and outsourced services. Organisations increasingly rely on third parties to deliver critical services. While this brings efficiency and capability, it also introduces risk - including operational disruption, regulatory exposure and reputational impact. Effective TPRM provides visibility and control over these risks, ensuring that third parties support, rather than undermine, organisational objectives.

Common challenges

Third party risk is often managed inconsistently, with limited visibility across the organisation.

Due diligence may be performed at onboarding, but ongoing monitoring is weak or absent. Risk assessments can be inconsistent, with no clear criteria for evaluating suppliers.

There is often limited understanding of which third parties are critical and what dependencies exist. In some cases, responsibilities are unclear, and governance is fragmented across procurement, risk and operational teams.

What good looks like

Third party risk is clearly understood and managed as part of the overall risk framework.

Critical suppliers are identified, with clear visibility of dependencies and associated risks. There is a consistent approach to due diligence, risk assessment and ongoing monitoring.

Risk ownership is defined, and governance is clear. Third party risk is integrated into decision-making, with regular reporting and escalation where needed.