Third-Party Risk Management

PRIMARY CONTACT: Daniel J. Desko CISA, CISSP, CTPRP 

Outsourcing business functions to third parties is essential in today’s business environment.  While outsourcing provides benefits such as increased efficiency and cost savings, it also increases an organization’s risk exposure to a myriad of threats presented by outsourcing.  Understanding how to identify and manage the risks presented by third party providers is vital for any business.  The Schneider Downs Risk Advisory Services team has the expertise, credentials and tools to help you build, implement, recalibrate, and manage a world-class third party risk management program.

What is Third Party Risk Management?

Third party Risk Management (TPRM) is a process of identifying and managing the risks created when hiring a third party to provide goods and services.

Its’ primary focus is usually on data protection/privacy and IT security controls, but its scope depends entirely on the nature of the services provided by the third party. Therefore, it may include operational concerns such as business resiliency, financial integrity, and regulatory compliance.

The Need for Third Party Risk Management

The practice of outsourcing services to specialized organizations continues to grow exponentially. Shortages of qualified individuals continue to drive this trend, and statistics show that this shortage will continue throughout most industries for years to come. Outsourcing has proven to reduce and control cost more effectively, improve company focus, and gain access to world-class specialized resources.

  • Third party relationships are increasingly being viewed as strategic business partners. Third parties are expected to maintain the same level of control throughout the environments where they store or process sensitive or confidential data elements.
  • Third party relationships are popular and consistent targets for cyber-attacks. The cost of cybercrime is expected to continue to rise each year by trillions of dollars, primarily driven by data breach fines and lost business. Third-parties that process highly confidential data elements have the potential to be the root cause of a data breach, yet both the third party and their customers can experience significant downstream effects.
  • It is no secret that monitoring and regularly evaluating third parties is undoubtedly a good business practice and can help uncover and mitigate key risks. In addition to being a best business practice, regulators and lawmakers around the world are recognizing the impact that third parties have on their business partners operations and the responsibility they have as stewards of sensitive data. Because of this, there is increased regulatory pressure across a multitude of industries to ensure that third parties are appropriately evaluated for key risks.

Consideration of these factors adds up to one consistent sentiment: A strong TPRM program is essential to ensure strong business operations. For more information visit www.schneiderdowns.com/tprm or contact us to get started.

Schneider Downs TPRM Services

The Schneider Downs Risk Advisory Services team can help your organization with third party risk management with our robust service offerings

Schneider Downs TPRM Resources

Built by our tenured team of security, risk and compliance practitioners. We have leveraged decades of diverse subject-matter expertise and experience to be able to provide the following resources and tools:

 

 

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