Third party risk management

This is the most commonly cited third-party risk because vendors often hold sensitive data—customer records, intellectual property, financial information—or maintain direct network connectivity to your environment. Given the complexity of third-party data sharing, a well-rounded, professional solution is crucial. Key aspects include making sure that contracts include critical provisions such as confidentiality clauses, NDAs, data protection agreements and service level agreements (SLAs). Continuous monitoring is used to identify events that might alter the risk profile, such as data breaches or regulatory changes.

Here, we’ll take a look at the statistics surrounding Nth party risks, highlighting how far the chain of risk extends and why it’s a growing concern in 2026. There’s a long and storied history of companies suffering data breaches, reputational damage, and other operational snafus — or worse — due to their relationships with third parties and vendors. AI used by third parties can include sensitive data, automate decisions that have wide-ranging impacts and introduce dependencies that may be difficult to audit or govern. Furthermore, the breadth and complexity of TPRM makes integrating AI solutions into existing TPRM processes and https://fu-fu-nikki.com/2020/12/page/3/ workflows a difficult undertaking. The key benefits reported from this maturation include a better user experience (56%), increased understanding of risks during the decision-making process (52%), completeness and accuracy of data (51%) and standardization (51%). The complexity of the third-party ecosystem is further complicated by the increased reliance on non-traditional third parties (NTTPs), such as strategic partnerships, resellers, broker-dealers, legal third parties, and others.

• Conducting thorough risk assessments, adopting protective measures, and maintaining ongoing supervision ensures your company remains secure against vendor-related breaches.
• Maintaining a standard security framework has become increasingly crucial for businesses in today’s digital age…
• Cyber threats, like supply chain attacks or data breaches, often target weak links in vendor security.
• Understanding how these cyber risks can impact your organization is crucial for developing a plan that effectively mitigates threats and protects your business.
• This includes continuous monitoring, regular audits, and setting contractual obligations for third-party vendors.

DeepStrike helps organizations validate third-party risk through web application, API, and cloud penetration testing, red team assessments, continuous penetration testing, dark web monitoring, weekly vulnerability scanning, attack surface management, and remediation retesting. A vendor security assessment is the structured review of a third party’s security posture, access model, integration design, compliance evidence, incident responsibilities, and remediation maturity. TPRM cannot rely on questionnaires, certificates, and security ratings alone when vendors touch production systems, sensitive data, APIs, cloud roles, software pipelines, or identity systems.

Top Third-Party Risk Statistics for 2026

She underscores that this awareness should extend beyond traditional risk-focused departments such as compliance, legal, and finance, to include any function interacting with third parties. Sherry Rodriguez, vice president of Global Assurance at a leading financial institution, emphasizes that an organization’s reputation can be adversely impacted by a third party’s cybersecurity, operational, financial, compliance, or legal vulnerabilities. According to the Verizon 2025 Data Breach Investigations Report, 30% of recent data breaches were linked to third-party involvement, double last year’s percentage. This is critical when an organization is engaged in longer-term process outsourcing or technology support contracts, Gulvadi says. That includes assessing controls for inventorying and identifying all critical vendors that have access to customer information.

• With the challenges of increased regulations, complexity of the supply chain, and lack of internal resources to verify access controls, third-party risk assessments must be a simple and standardized method for organizations to manage third-party risk.
• Under the GDPR, you’re accountable not only for how you handle personal data, but for how your vendors share, process, and secure it as well.
• This guide explains GDPR third-party risk management, including key legal obligations and practical strategies to keep your organization compliant and protected.
• As organizations increasingly outsource critical services and embrace migration to the cloud, it’s becoming more crucial that they verify that their third party is using proper access controls – especially when they share sensitive data with that third party.
• Mitigation strategies might include developing better security controls, adjusting the third party’s internal policies to align with your organization’s risk management, and including a penalty for non-compliance in third-party contracts.
• Performing a PIA helps the privacy team understand where the organization may be placing customers’ sensitive data at risk and create a strategy to mitigate that risk.

Build an accurate, comprehensive, up-to-date inventory of third parties

“The number of third-party relationships managed by a typical company has risen sharply in recent years, as has the complexity of these relationships,” says Kapish Vanvaria, EY Global Risk Consulting Leader. Conducted in collaboration with Oxford Economics, the survey seeks to understand how organizations handle TPRM, including best practices, challenges and outlook. Continuous monitoring uses automated external scans, threat intelligence feeds, and API integrations to track vendor security posture, compliance status, and breach disclosures in real time, eliminating the labor of manually chasing vendor questionnaire responses, reviewing documents, or scheduling annual audits for every vendor relationship. This created a fourth-party breach affecting organizations multiple hops removed from the initially compromised vendor—security teams can’t just map direct vendors, they also have to understand critical sub-processors and service providers used by those vendors.

What Does a Third-Party Risk Assessment Include?

The ascendance of these specialized service providers hasn’t just increased https://ru-patent.info/the-role-of-legal-protection-in-the-digital-age-privacy-cybersecurity-and-beyond/ the number of third-party relationships; it has also increased their complexity. Today’s financial services companies, for instance, partner with a host of fintech service providers, including payment processors, loan providers and investment platforms. The end result is that companies rely more than ever on large numbers of specialized service providers. While companies have always dealt with third parties, the number and complexity of such relationships has grown in recent years.

As a legacy industry, healthcare organizations often rely on outdated, manual processes that introduce high levels of human error and can negatively impact data security. Ongoing monitoring and continual risk assessments for your third-party vendors are the best ways to stay on top of your risk levels, ensure TPRM SLAs are being met, and maintain a healthy and safe vendor relationship. It’s vital to ensure a solid understanding of the workflows and responsibilities shared between you and your vendors when working to implement or improve risk mitigation processes. When this happens, it’s important to have a remediation plan and begin the process quickly to reduce the risk of vulnerabilities for your data. Solid TPRM processes will also ensure sensitive data shared with third parties is kept secure.

We Researched Four AI Evidence Analysis Tools for TPRM. Here’s What We Found.

Contractors, partners, MSPs, SaaS integrations, API keys, OAuth grants, service accounts, support portals, and remote-access tools create persistent access paths that outlive onboarding packets. This article uses publicly available 2024–2026 data and labels each statistic by data type so third-party-specific evidence is not mixed carelessly with broader breach, cloud, SaaS, API, or supply chain benchmarks. These third parties often have access to sensitive data, internal systems, and critical operations, making them potential entry points for cyberattacks, data breaches, or compliance violations. Whatever industry you’re in, if you’re dealing with customer and employee data, it’s time to study the long-term benefits of investing in a thorough, streamlined, and heavily automated third-party risk management solution.

Companies can’t always take care of every business operation in-house, and third parties are often cost-effective solutions. Many modern organizations rely on third-party vendors and outsourced service providers for their infrastructure, software supply chain, and various operations. By teaming with KPMG, you'll be able to focus on your strategic imperatives and opportunities while we help you navigate the complex risk and regulatory landscape with AI-driven solutions. We recognize that new, complex third-party security challenges can no longer be managed effectively with traditional processes.