Operational Resilience


What is TPRM?

TPRM is a continuous process of identifying, assessing, managing, and mitigating risks associated with the use of third parties (vendors, suppliers, service providers, partners).

It encompasses a wide range of risks, including:

  • Operational Risk: Disruptions to your operations stemming from a third party’s failure (outages, data breaches)
  • Reputational Risk: Negative publicity due to a third party’s unethical or unlawful practices
  • Financial Risk: Costs arising from a third party’s failures or contract breaches
    Compliance Risk: Compliance failures due to inadequate third-party oversight

Key Components of a TPRM Program

Third-Party Inventory

  • Discovery: Identify all third parties your organization interacts with. Look beyond obvious vendors to include consultants, software providers, and any entities handling sensitive data.
  • Classification & Tiering: Categorize third parties by risk level based on factors like the type of data they access, criticality of their services, and geographic location.

Risk Assessment

  • Tailored Questionnaires: Develop detailed questionnaires to gather information about third-party security posture, compliance, business continuity plans, and financial stability.
  • On-Site Assessments: For particularly high-risk vendors, consider on-site visits to evaluate physical security and operational controls.External Data: Utilize threat intelligence sources and security rating services to supplement your own assessments.

Due Diligence

  • Financial Health: Review financial statements to assess the long-term viability of critical third parties.
  • Reputation Screening: Investigate potential third parties for legal violations, ethical scandals, or negative media coverage.
  • Certifications & Standards: Verify that vendors uphold relevant industry certifications (e.g., SOC 2, ISO 27001).

Contractual Safeguards:

  • Data Security & Privacy: Include clear data handling and breach notification clauses.
  • Service Level Agreements (SLAs): Define performance expectations, uptime guarantees, and penalties for non-compliance.
  • Termination & Offboarding: Outline processes for secure data return and destruction upon contract termination.

Ongoing Monitoring:

  • Continuous Assessment: Schedule regular reassessments, especially for high-risk third parties.
  • Performance Metrics: Track agreed-upon metrics (response times, incident rates) to identify potential issues.
  • News Monitoring: Set up alerts to track news and social media mentions for red flags about your third parties.

Additional Considerations

  • Governance & Ownership: Establish a central TPRM function with clear responsibility and reporting lines.
  • Technology Tools: Consider implementing specialized TPRM software to streamline data collection, risk scoring, and reporting.
  • Cross-Functional Collaboration: TPRM involves stakeholders from IT, procurement, legal, compliance, and business units.

Why is TPRM Important?

  • Increased reliance on third parties: Modern companies use a vast network of external vendors for everything from IT services to supply chain logistics. This reliance introduces inherent risks that need to be managed.
  • Regulatory pressure: Regulations such as DORA, GDPR, and CCPA mandate that businesses take responsibility for the risks posed by their third parties.
  • Protecting your business: Effective TPRM safeguards your operations, reputation, and financial wellbeing from the ripple effects of third-party incidents.
  • Building Trust: Strong TPRM practices demonstrate due diligence to customers and stakeholders.


Asset Managers

Implementing a succesful TPRM Program


TPRM Strategy & Roadmap

Helping organizations establish a comprehensive TPRM framework, including risk assessment methodologies, governance models, and technology selection.


Vendor Due Diligence

Conducting thorough risk assessments of third parties, covering security practices, financial health, operational resilience, and compliance.


Contract Negotiation & Risk Mitigation

Supporting the development of strong contracts with clauses protecting your organization from liability and ensuring data privacy standards.


Ongoing Monitoring & Reporting

Implementing risk dashboards and reporting to provide continuous visibility into third-party relationships and evolving risks.


Regulatory Compliance Support

Assisting with interpreting and complying with complex regulations like DORA, GDPR, and specific industry standards.

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