March 1, 2024
Internet, Management Tools

Upcoming Trends in Third-Party Risk Management

Businesses will significantly witness the growing threats associated with third-party partnerships, irrespective of whether they are prepared or not. Reportedly, there had been around 1802 data breaches exposing more than 422 million people in the US alone. Although the numbers scare any company, reports show that they will continue rising throughout 2024.

With the expansion of the supply chain and the number of risks increasing, one main thing that stays unchanged is the need for your business to become aggressive and diligent regarding third-party risk management or TPRM. Robust third-party risk management systems exist that can thwart devastating data breaches, while also being adaptable enough to protect an organization from newly arising threats.

Upcoming TPRM Trends in 2024

Continue scrolling through to discover the latest trends of TPRM your company should look into this year and learn the way to adjust the TPRM program in the right way.

1. Holistic and Cross-Functional Programs

If your business has a robust third-party management program under its belt or confines the program coverage across a single risk domain, then it is the right time to consider the things majorly. Programs are becoming cross-functional and holistic. Instead of operating across departments that do not collaborate, companies are in search of developing a cross-functional way of monitoring and managing their third-party relationships.

The segregation of teams is getting broken down, leading to them being in a greater risk exposure. Programs are monitoring several risk domains, including cybersecurity, data privacy, ESG, quality, and more. Programs are going deeper into the supply chain, addressing these risks, and include third and fourth party risk management, fifth parties, and more.

2. Attack Surfaces Will Expand

The growth of the use of the Internet of Things or IoT technology leads to the expansion of the attack surface. The expansion rises tenfold when the companies manage the greater supply chain of the third-party vendors with the growth of the vendor attack surface.

Research indicates that the global count of Internet of Things (IoT) devices is expected to increase from 15.1 billion in 2020 to over 29 billion IoT devices in 2030, effectively doubling the number of connected devices worldwide.

3. Vendor Network Complexity

Companies today are outsourcing their key functionalities to third-party vendors, which leads to the growing potential for vulnerabilities. It becomes tough for the companies to conduct an extensive risk assessment, which creates challenges for the management while companies try to track and manage the activities of several vendors.

The growing vendor network makes the companies encounter greater risks for data breaches if the single vendor gets compromises that lead to the exposure of sensitive data for every vendor within the network.

4. Inadequate Due Diligence

In several instances, the companies often need to conduct a complete assessment of the vendor before they enter into a contract. It would lead to signing the contracts with vendors who need to be qualified or can meet the needs of the company resulting in greater risks and expensive failure of services.

Numerous companies need the appropriate processes in place for monitoring the vendors ongoingly, making it difficult to identify the threats timely.

5. ESG Focus Will Rise

The growing consumer commitment to sustainability, ethical business practices, and human rights, ESG or environmental, social, and governance (ESG) frameworks continues receiving more TPRM.

The companies start looking mainly at the managed third party risk with the vendors throughout 2024 and the future that aligns with the internal values. These days, there is yet to be a universally accepted framework that has evolved with the standard for ESG evaluation.

6. Rise of Automation

Although a few companies are using manual strategies for vendor risk management, the cybersecurity industry will no longer accept manual reporting or spreadsheets as the best practice.

Automation has continued dominating the conversations for years, with every stage of the TPRM having greater complexities with manual tracking. The constant rise of automation tactics like artificial intelligence and machine learning reflects the commitment of the industry to outpace proficient cybercriminals.

Companies that have yet to implement automation into their TPRM programs get blindsided by the hidden data risks, considering the inefficiencies and ineffectiveness of the risk prevention strategies.

7. Privacy Laws Will Take Center Stage

The dangerous and unstable environment where modern enterprises should contend is the thing that the regulatory bodies and the government should have an awareness of. However, the legislative progress mainly proceeds at a slow pace. This year, it will change. The law finally initiated catching up with the technology and third-party risk management trends this year.

A real tsunami of regulatory and legislative reforms is foresighted. Criminals are growingly aiming for the infrastructure of the nation with privacy and security becoming the hot political issues. Consequently, several areas have the chance of going through a phase of overregulation and overcorrection.

In the end, Gartner is set to predict that by the next year, there will be at least one set of privacy laws applicable to 75% of the total population of the world. Therefore, you should instantly start to establish the foundation to adapt to the new environment, starting with the framework for the trends of third-party risk management.

8. Rise of the Zero-Day

As the criminals are set to develop their new strategies, the zero-day assaults are predicted to grow strongly. Shades of these were evident back in 2021 when the attacks on supply day and zero-day risks were the two most common ransomware attacks.

Businesses should reevaluate how they are conducting their businesses to respond to third-party risk management trends to help build better security and resilience across different aspects of their operations. Several decision-makers appear to have ideas on this. For instance, 52% of the companies intend to investigate or pilot the zeo-trust technology.

A stronger emphasis on safe software development and lifecycle management is anticipated along with the introduction of zero trust. At the initiation of every new project, the developers start considering the risks. Additionally, while the businesses search to curtail sprawl and reduce the challenges around their ecosystem, it will help in the greater adoption of the API-first strategy with a focus on security by design.

Final Words

Third-party risk management is dynamic however there is one thing that stays constant and it involves the continued expectation by the global regulators for a strong third-party risk management program. These programs should be adaptable to the velocity and volume of changes. Understanding the trends will impact how the third-party risks get managed to help you prepare for the future building greater business resilience.

Zayne

Zayne is an SEO expert and Content Manager at Wan.io, harnessing three years of expertise in the digital realm. Renowned for his strategic prowess, he navigates the complexities of search engine optimization with finesse, driving Wan.io's online visibility to new heights. He leads Wan.io's SEO endeavors, meticulously conducting keyword research and in-depth competition analysis to inform strategic decision-making.