I’m thrilled to sit down with Chloe Maraina, our esteemed Business Intelligence expert, whose passion for crafting compelling visual stories through big data analysis has made her a visionary in data management and integration. With a keen eye for emerging trends in cybersecurity and third-party risk management (TPRM), Chloe brings a wealth of knowledge to today’s discussion. In this interview, we’ll explore the critical importance of managing risks associated with external partners, the strategies for effective vendor assessments, the role of contracts and ongoing monitoring, and the future of TPRM in an interconnected business landscape. Let’s dive into her insights on how organizations can safeguard themselves from the pitfalls of third-party failures.
Can you break down what Third-Party Risk Management, or TPRM, really means and why it’s so crucial for businesses today?
Absolutely. TPRM is all about identifying, assessing, and mitigating the risks that come from working with external partners like vendors, suppliers, or service providers. These third parties often have access to sensitive data or play a key role in operations, so any failure on their end—be it a cyber breach or a service outage—can directly impact your business. It’s become crucial because companies are outsourcing more than ever, from IT infrastructure to staffing, which expands their risk exposure. A single weak link can lead to financial loss, reputational damage, or regulatory penalties, so having a solid TPRM program isn’t just a nice-to-have; it’s a necessity in today’s interconnected world.
What are some of the biggest risks you’ve seen when companies rely on third parties, and how do they impact operations?
The risks are wide-ranging, but some of the biggest ones include cybersecurity breaches, operational disruptions, and compliance issues. For instance, if a vendor gets hacked, attackers might gain access to your data, leading to breaches that cost millions in damages and erode customer trust. Operationally, if a critical tool or service goes down—like we saw with major outages in the past—your business could grind to a halt, losing revenue and productivity. Then there’s the compliance angle; if a third party doesn’t meet regulatory standards, your company could face fines or legal trouble. These risks don’t just disrupt day-to-day work; they can have long-lasting effects on a company’s bottom line and reputation.
How do you approach building a strong risk assessment process for evaluating third-party vendors?
It starts with a thorough inventory of all third-party relationships—knowing who you’re working with and what role they play in your operations. From there, I prioritize vendors based on their access to sensitive data or their criticality to business functions. For example, a cloud provider hosting your core systems needs more scrutiny than a peripheral service. I look at multiple risk dimensions—cybersecurity, operational stability, financial health, and even regulatory compliance. Tools like standardized questionnaires can help gather consistent data on vendors’ security practices and policies. The goal is to create a clear risk profile for each vendor so you can focus mitigation efforts where they’re needed most.
What’s your take on the importance of contracts in managing third-party risks, and what key elements do you always include?
Contracts are your first line of defense in TPRM. They set the expectations and provide legal protection if things go south. I always ensure contracts include specific clauses on cybersecurity requirements, like encryption standards or incident response protocols, and data protection measures to safeguard sensitive information. Audit rights are critical too, so you can verify a vendor’s compliance over time. I also push for clear liability clauses—who’s responsible if there’s a breach or outage—and service-level agreements to guarantee uptime or performance. Aligning these terms with regulations like GDPR ensures you’re not just protected, but also compliant. A well-crafted contract can save a company from a lot of headaches down the line.
Once a vendor is onboarded, how do you keep an eye on potential risks and ensure they’re meeting expectations?
Ongoing monitoring is non-negotiable. After onboarding, I set up systems to track vendor performance against agreed-upon metrics, like SLAs for uptime or response times. Automated tools can flag anomalies, such as unusual activity that might indicate a cyber threat. Regular check-ins or audits help catch issues early, and I make sure to stay updated on any changes in a vendor’s operations or security posture. Communication is key—if something looks off, I report it to stakeholders with a clear analysis of potential impacts. Continuous monitoring has proven invaluable in my experience; it’s often the difference between catching a problem before it escalates and dealing with a full-blown crisis.
How do you see the role of technology evolving in third-party risk management over the next few years?
Technology is becoming the backbone of TPRM, and I expect that trend to accelerate. We’re already seeing platforms that automate risk assessments, monitor vendors in real-time, and integrate data across departments for better decision-making. Tools like software bills of materials (SBOMs) are game-changers for identifying vulnerabilities in third-party software. Looking ahead, I think artificial intelligence and machine learning will play a bigger role in predicting risks by analyzing patterns and anomalies faster than humans can. As businesses become more digital, integrating these technologies into TPRM programs will be essential to stay ahead of emerging threats and maintain resilience in a complex vendor ecosystem.
What’s your forecast for the future of third-party risk management, especially as businesses become more interconnected?
I see TPRM becoming even more central to business strategy as interconnectivity grows. With more companies relying on sprawling networks of vendors, including fourth-party partners, the risk landscape will only get more complex. I predict a shift toward more proactive, predictive risk management, driven by advanced analytics and AI to anticipate issues before they happen. Regulatory pressures will likely intensify, pushing organizations to adopt standardized frameworks and invest in robust governance. Ultimately, TPRM will evolve from a reactive compliance exercise into a competitive advantage—those who master it will build trust with customers and partners while avoiding costly disruptions. It’s an exciting, if challenging, space to watch.
