What is the meaning TPRM? Why is it so important? How can you implement an effective third party risk management process for your business? In this post, we explain everything you need to know about TPRM and give you some useful tips on how to carry it out!
TRPM stands for Third Party Risk Management. TRPM is a type of risk management that focuses on the risk that third parties can represent for a business, and how to reduce it.
As a business, you probably rely on third parties to carry on certain activities on your behalf. Third parties are the contractors you may have hired (consultants, developers, a social media manager, etc.), but also services you use for your business (cloud services, analytics, web hosting companies). Since these third parties will have access to the data your business collects and processes, you need to make sure they’re reliable.
Without a third-party risk management process in place, your organization may face major repercussions.
A TPRM helps you identify different kinds of potential risks — compliance, cyber, financial, strategic, technological, as well as reputational — and assess whether it’s worth working with a specific third party.
Moreover, a thorough TPRM can help you reduce the risk of data breaches.
📌 Did you know that a cyberattack happens every 39 seconds?
And if one of the third parties you rely on is breached, then you’re exposed to the same risk too!
There’s another type of risk assessment you may need to carry out. If you’re processing personal data, you may need to perform a “Data Protection Impact Assessment (DPIA)”.
Unlike the TPRM, the DPIA is directly mentioned under laws like the GDPR and is meant to help you mitigate the risk of fines, sanctions, and reputation damage that might affect your organization.
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