As businesses increasingly rely on vendors, contractors, and service providers, each connection introduces potential entry points for cyber threats. While internal cybersecurity measures like firewalls and employee training are essential, they often overlook the risks posed by external partners and the governance challenges they create. According to a report by Imprivata and the Ponemon Institute, The state of third-party access in cybersecurity, 47% of organizations experienced a data breach or cyberattack in 2024 that involved a third party. The breaches resulted in the loss or theft of sensitive information (53%), regulatory fines (50%), and severed relationships with the affected third party or vendor (49%). These aren’t just security failures — they’re governance and compliance risks. Unpatched systems, shared credentials, and unsecured APIs among third parties become gateways for attackers. Regulatory frameworks such as the U.S. Securities and Exchange Commission’s (SEC) cybersecurity disclosure rules and the EU’s Digital Operational Resilience Act (DORA) now hold organizations accountable for both their own security and that of their third-party vendors. Effective cybersecurity is no longer just about securing your own systems. You must embed third-party oversight into your broader governance, risk, and compliance (GRC) strategy. Internal Cyber Programs Aren’t Enough While critical, focusing solely on securing your own perimeter with firewalls, user awareness training, and incident response protocols creates a false sense of security when not paired with a structured approach to external risk. Most third-party cyber threats build quietly, through outdated vendor systems, insecure remote access, or overly permissive data sharing. Without visibility into these risks, internal controls are left blind to one of the fastest-growing threat vectors. Most organizations don’t know what they don’t know. Three quick questions that can help reveal hidden gaps: Which vendors currently have access to your systems or data? Can you categorize or tier vendors based on their risk level? How often do you reassess these vendors as systems evolve or threats change? If any of these questions give you pause, your current approach to third-party risk management may be leaving your organization exposed and out of alignment with today’s regulatory expectations. A Framework for Strengthening Third-Party Cyber Risk Management Building a mature third-party cyber risk management (TPRM) strategy requires a proactive, repeatable process that’s fully embedded within your GRC program. Here’s a five-part framework that can help teams move from reactive oversight to resilient, enterprise-level risk governance. Start with visibility You can’t manage what you can’t see. Start by creating a comprehensive inventory of all third-party vendors, contractors, and service providers with digital access to your systems, data, or facilities. Don’t overlook cloud platforms, SaaS tools, or subcontractors embedded deeper in your supply chain. Dig a little deeper and map data flows and system access by vendor. Tier vendors based on risk Not all vendor risk is equal. Use a tiering framework to classify vendors based on their potential impact on your organization. Key factors to consider include: Access to sensitive or regulated data Integration with critical systems Financial and operational impact if compromised Tiering vendors allows for intelligent risk management, with high-risk vendors warranting deeper assessments, more frequent reviews, and stronger controls. Standardize the assessment process Once vendors are categorized, develop standardized onboarding and assessment processes for each tier. Every vendor should follow a documented, audit-ready process that includes: Cybersecurity questionnaires Evidence of third-party certifications Review of incident response plans Validation of cyber insurance coverage Assessment of data handling, retention, and deletion policies Clear assessment templates and scoring rubrics allow teams to compare vendors more effectively, reduce subjective decision-making, and demonstrate due diligence to stakeholders. Monitor continuously Passing onboarding isn’t a guarantee that a vendor will remain compliant. Systems fall out of date, certifications lapse, and new vulnerabilities emerge. Rather than relying on point-in-time reviews, organizations should set up automated reassessment reminders based on risk tier, track the status of remediation activities, and flag issues like expired certifications. For high-risk vendors, integrating real-time threat intelligence or external risk scores brings new concerns as they arise. Use technology to scale and mature Managing third-party risk manually through spreadsheets, email chains, or disparate tools is unsustainable. As vendor ecosystems grow and regulations tighten, technology becomes essential for scaling your program, maintaining consistency, and achieving real-time visibility across your third-party landscape. A modern vendor risk management platform can ensure assessments happen on schedule, control gaps are flagged early, and documentation stays audit-ready. Third-party cyber risk may no longer be a niche IT concern, but embedding technology into your TPRM program empowers your teams to act proactively rather than reactively. The result is a stronger, more mature cybersecurity posture that can meet today’s regulatory expectations and build long-term resilience against the rising tide of third-party threats.