Third Party Risk Management (TPRM): How to Protect Your Business from Supply Chain Risk

Introduction

Nowadays, businesses rely heavily on third-party vendors for a variety of services. While this can enhance efficiency and reduce costs, it also opens the door to significant cybersecurity risks. A 2024 study reported that the number of data breaches involving a third party or supplier has increased by 68% from the previous year. As companies continue to expand their supply chains globally, they expose themselves to multiple attack vectors, making vendors potential gateways for cyber-attacks.?

Section 1. Understanding Third Party Risks?

What Are Third-Party Cybersecurity Risks and Why Should You Care???

Third-party cybersecurity risks refer to potential vulnerabilities that arise from external vendors like suppliers, service providers and contractors who have access to your organization’s systems and data. If your vendor suffers a data breach, your data is also at risk.?If your vendor is hacked, your system is also put in?danger. As businesses grow more reliant on third-party vendors, the risks become more complex and harder to detect. Essentially, your vendor’s security weaknesses become your weaknesses, and that’s a big deal.?

Types of Threats Originating from Third Parties?

• Malicious Code Insertion: Hackers can inject harmful code into vendor software, leaving you vulnerable to cyberattacks.?
• Counterfeit Products: In a global supply chain, counterfeit or unauthorized products of lower quality can compromise your security and operational efficiency.?
• Supply Chain Disruptions: If attackers target a critical vendor, it could disrupt your entire operation, leading to potential revenue loss.?

According to NIST, supply chain cybersecurity threats have become a significant concern, as seen in numerous case studies where businesses were severely impacted by vendor-related disruptions like ransomware attacks.?

The Impact of Third-Party Risks?

A third party data breach can have devastating consequences that go beyond financial loss; it can severely tarnish your corporate reputation. Imagine the fallout from a compliance issue or operational disruption caused by your vendor. Take Target’s infamous data breach which stemmed from a compromised HVAC vendor- this incident not only costed the company over $61 million in total but also significantly damaged customer trust.?

?? Learn More about Third Party Data Breaches

To safeguard your business, implementing a robust Third Party Risk Management (TPRM) strategy is crucial.?

Section 2. Third Party Risk Management (TPRM)?

What Is TPRM??

Third Party Risk Management (TPRM) is your safety net for identifying, assessing, and mitigating risks from third-party vendors. With TPRM in place, you gain visibility into your vendors’ cybersecurity practices and ensure they align with your security policies.?

Why Do You Need TPRM??

TPRM isn’t just a “nice-to-have” — it’s essential for any organization that works with third-party vendors. Implementing an effective TPRM strategy is crucial for several reasons:?

• Proactive Risk Identification: Identify potential vulnerabilities in third party vendors before they can be exploited, reducing the likelihood of data breaches.
• Real-Time Monitoring: Utilize TPRM tools like Alliance TPRM for continuous, real-time monitoring of vendor security, enabling quick responses to suspicious activities.
• Enhanced Security Posture: By actively monitoring third-party practices, organizations can strengthen their overall security framework.?
• Regulatory Compliance: Meet industry-specific compliance requirements and avoid costly fines.?
• Cost Efficiency: Manually conducting vendor risk management is expensive. Automating the TPRM process reduces costs while also providing a more thorough risk assessment.??

Why spend hours manually assessing your vendors when you can automate the entire process? Tools like Alliance Third Party Risk Management continuously monitor vendor security in real time, issuing real time alerts for suspicious activity. This approach enhances security while cutting down on labor costs.?

How Can Alliance Help You???

Alliance Third Party Risk Management (TPRM) provides powerful features, including automated risk assessments and vendor security ratings. Powered by YODA AI, it continuously monitors for emerging threats, identifying vulnerabilities in real time to keep you ahead of potential risks. No more scrambling to respond to breaches—Alliance helps you stay prepared and proactive, ensuring your supply chain is always secure.?

Don’t leave your supply chain vulnerable.?Discover?Alliance?TPRM and find out how our features can protect your business.?

Section 3. TPRM Best Practices

To effectively manage third-party access to your systems, consider these best practices:?

• Conduct Thorough Due Diligence: Before engaging with a vendor, assess their security policies, past breaches, and compliance history.?
• Establish Clear Contracts: A solid contract is your first line of defense. Ensure contracts include clauses that clearly?outline the security measures your vendors must meet?(security requirements, reporting protocols, incident response plans, penalties for noncompliance), and regularly review them.?
• Regularly Monitor Third-Party Vendor Activities: Don’t wait for a breach to happen—regularly audit your vendors’ cybersecurity practices.?Automated tools like Alliance continuously monitor vendor networks, ensuring timely detection of threats.?
• Implement Access Controls: Limit access to your systems based on necessity, reducing the potential attack surface.?
• Develop an Incident Response Plan: Prepare for potential breaches by having a clear response strategy in place that includes third-party involvement.?
• Training and Awareness: All employees—from IT to procurement—should understand third-party risks. Regular training on cybersecurity best practices and third-party risk management ensures that everyone in your organization is equipped to spot potential issues before they escalate.?

Conclusion

Don’t Wait for a Breach—Act Now with Alliance TPRM?

As cyber threats grow in complexity, Third Party Risk Management (TPRM) is no longer optional. From automated risk assessments to continuous monitoring, TPRM ensures that your business stays secure. Automated tools like Alliance TPRM not only enhance security but also save time and money, making them an essential investment for all businesses.?

Protect your supply chain, Protect your data. Invest in TPRM today. ?