Vendor operations rank high among concerns in risk assessment, according to a study's findings
**Transforming Third-Party Risk Management with AI and Continuous Monitoring**
The landscape of Third-Party Risk Management (TPRM) is undergoing a significant transformation as companies increasingly rely on third-party vendors and face escalating cyber threats. Recent trends indicate a shift towards continuous monitoring, the integration of real-time threat intelligence, and the harnessing of artificial intelligence (AI) to streamline processes and enhance risk management capabilities.
In a bid to address evolving threats and ensure compliance, organisations are moving away from one-time vendor assessments and embracing continuous monitoring. The integration of real-time threat intelligence tools is becoming increasingly crucial for proactive risk identification and mitigation.
Artificial intelligence is playing a pivotal role in this transformation. AI can automate document review processes, reduce timelines, and enhance efficiency in risk management decision-making. AI-powered risk sensing allows for proactive risk identification and mitigation, leveraging diverse data sources and historical trends. AI also enables real-time risk assessment and predictive analytics, helping organisations stay ahead of emerging threats.
The development of AI-driven platforms, such as the EY.ai agentic platform, is further enhancing risk management strategies by streamlining processes and providing data-informed decision support.
Financial, cybersecurity, privacy, and regulatory risks are the top four concerns about third parties, as cited by executives in a recent survey. The EY report, capturing sentiments among corporate leaders in a diverse array of industries and countries, highlights these concerns as they grapple with these threats. Many high-profile cyberattacks have involved third-party compromises, which have heightened these worries.
In response, companies are turning to third-party service providers for various functions, including human resources, business intelligence, and supply chain logistics. This function-focused approach to risk management has grown more important as companies have outsourced more of their operations to subcontractors.
The EY report also advises understanding the benefits and limitations of artificial intelligence in the context of TPRM. It recommends preparing for technological "tipping points" that could change how risk analysis is done in TPRM.
A recent EY survey of 500 executives at major companies found operational risk to be the most common concern in TPRM. As a result, the number of business functions relying on third parties and exposed to third-party risks has greatly increased.
In conclusion, the integration of AI and continuous monitoring is revolutionising TPRM by providing advanced analytics, automation, and predictive capabilities that help organisations manage risks more effectively and maintain resilience in an increasingly complex landscape.
- To proactively manage escalating cyber threats in Third-Party Risk Management (TPRM), companies are adopting continuous monitoring and integrating real-time threat intelligence tools.
- Artificial Intelligence (AI) is central to the transformation of TPRM, enabling proactive risk identification, automating document review processes, and providing real-time risk assessment.
- Financial, cybersecurity, privacy, and regulatory risks are critical concerns in TPRM for many executives, driven by high-profile cyberattacks involving third-party compromises.
- Companies are turning to third-party service providers for various functions, such as human resources, business intelligence, and supply chain logistics, as part of a function-focused approach to risk management in a landscape of increased outsourcing.
