Imagine your company is about to partner with a new software vendor to streamline operations. Everything looks promising—until a hidden vulnerability in the vendor’s system exposes your sensitive data to a cyberattack. This scenario is increasingly common, as 54% of companies have experienced third-party breach in the past year.
But what if there was a way to prevent or better minimize negative impacts before it happens?
This is where a Third-Party Risk Management (TPRM) company comes in. Their role is to identify, assess, and reduce risks associated with vendors, suppliers, and service providers. In fact, this can be from financial, operational, geographic, and cyber risk perspectives. We will focus on the cybersecurity risks. From spotting potential vulnerabilities that could lead to a data breach, to ensuring regulatory compliance, TPRM companies help businesses build safer, more secure external partnerships.
Let’s explore the definition, role, and key services offered by third-party risk management companies — especially why they’re essential for modern businesses as an extension of your team invested in reducing the risks that vendor service providers or third parties present to you.
What is a Third-Party Risk Management Company?
A third-party risk management company helps businesses identify, assess, and reduce risks posed by vendors, suppliers, and service providers. This can be from financial, operational, geographic, and cyber risk perspectives. We will focus on the cybersecurity risks. Basically, their role is to ensure external partnerships don’t compromise security, compliance, or operations.
These companies, like FortifyData, provide vendor assessments, real-time risk monitoring, and incident response support. Also, by using advanced tools and frameworks, they automate risk scoring, track vendor performance, and ensure timely remediation of vulnerabilities.
For a deeper understanding, explore our guide on What is Third-Party Risk Management? to see how proactive risk management can protect your business.
Examples of third-party risk management companies or GRC providers that have a third-party management capability are:
- Arava Solutions
- Bitsight
- Black Kite
- FortifyData
- OneTrust
- Panorays
- Prevalent
- ProcessUnity
- RiskRecon
- RSA Archer
- SecurityScorecard
- UpGuard
- Venminder
Role of a Third-Party Risk Management Company
The role of a third-party risk management company is to safeguard businesses from the risks posed by external vendors, suppliers, and service providers. In fact, these companies take on the responsibility of identifying, assessing, and mitigating third-party risks, ensuring that partnerships remain secure and compliant.
Indeed, key functions of third-party risk management companies include:
- Risk Assessment: Evaluating vendors before and during the partnership to identify potential vulnerabilities.
- Ongoing Monitoring: Continuously tracking vendor activity to detect and address risks in real time.
- Compliance Management: Ensuring vendors meet regulations like GDPR, DORA, and industry-specific compliance standards.
- Incident Response: Helping businesses respond quickly to vendor-related breaches of security incidents.
- Contract Enforcement: Ensuring vendors adhere to Service Level Agreements (SLAs) and security obligations.
By handling these tasks, a third-party risk management company allows businesses to focus on growth while minimizing exposure to vendor-related threats. For a closer look at accountability, explore our guide on Who Owns Third-Party Risk Management?.
Key Services Offered by Third-Party Risk Management Companies
Third-party risk management companies provide essential services to help businesses manage vendor-related risks. Basically, their expertise ensures better security, compliance, and operational continuity. Here are the key services they offer:
- Vendor Risk Assessments: Evaluate and rate third-party vendors based on their security posture, compliance, and overall risk level before and during partnerships.
- Continuous Monitoring: Provide ongoing oversight of vendor compliance and security, enabling real-time detection of threats or changes in vendor risk status.
- Compliance Support: Ensure vendor compliance with regulatory frameworks like GDPR, ISO 27001, and DORA, helping businesses meet global and industry-specific compliance standards.
- Incident Response: Offer support in managing and mitigating third-party-related breaches of security incidents, ensuring quick containment and minimal business disruption.
FortifyData assists organizations with monitoring their vendors, measuring compliance and enabling risk and remediation collaboration with vendor contacts directly in the FortifyData platform.
Benefits of Partnering with a Third-Party Risk Management Company
Partnering with a third-party risk management company provides businesses with the tools, insights, and support needed to handle vendor-related risks efficiently. Finally, here are the key advantages of working with these companies:
- Risk Reduction: Lower exposure to financial, operational, and compliance-related risks by identifying and mitigating vulnerabilities before they escalate. This proactive approach prevents costly breaches and supply chain disruptions.
- Regulatory Compliance: Ensure full alignment with industry regulations like GDPR, ISO 27001, and DORA, reducing the risk of fines and legal penalties. Third-party risk management companies help businesses maintain continuous compliance with evolving regulatory standards.
- Operational Efficiency: Automate vendor risk assessments, real-time monitoring, and compliance tracking, saving time and internal resources. Businesses can focus on core operations while risk management companies handle the heavy lifting.
Why Choose FortifyData?
FortifyData takes third-party risk management to the next level with real-time monitoring, automated risk assessments, and customizable compliance tracking. Also, its platform offers continuous visibility into vendor security, helping businesses detect vulnerabilities early and respond to them faster.
By streamlining vendor onboarding, tracking SLAs, and ensuring compliance with regulations that have a specific focus or callout for vendor / third-party risk management like NY DFS, NIST, GDPR, DORA and others, FortifyData enables organizations to reduce operational burdens and safeguard their vendor ecosystem with precision.
How to Choose the Right Third-Party Risk Management Company
Choosing the best third-party risk management company requires careful consideration. Here are the key factors to evaluate:
- Industry Experience: Do they have experience in your industry?
- Technology and Tools: Do they offer modern risk assessment tools?
- Compliance Capabilities: Can they support GDPR, DORA, and ISO 27001 compliance?
- Managed Service: If needed, do they have a services arm to fully manage or support your vendor reviews and outreach?
- Integrations and Workflows: Does the third-party risk management company have workflows to support your business processes for third-party review or integrations with your workflow solution?
- Customer Support: Do they provide timely support and assistance?
Third-party Risk Management Companies Are an Important Extension of Your Team
Partnering with a third-party risk management company gives businesses the support they need to manage vendor-related risks with confidence. These companies serve as an extension of your internal team, helping you reduce vulnerabilities, maintain compliance, and safeguard your operations.
Don’t wait until a breach puts your business at risk.
FortifyData offers automated risk assessments, real-time monitoring, and compliance tracking to help you stay ahead of third-party threats. Take action now to protect your business and secure your vendor ecosystem.
