As your business scales up, third party risk management tools or TPRM tools become increasingly essential. With so many vendors associated with your business, it may become difficult to track them all manually.
Having a scalable, automated platform for managing your vendors makes it a tad bit easier to track and monitor the inherent risks associated with dealing with third-party vendors. Some of the business risks arising out of a lapse in third-party risk assessment include:
- Loss of data or information
- Loss of intellectual property
- Insurance claims
- Legal liability
- Financial loss
- Cyber Risk
- Compliance issues
- Reputation risks
But it’s not always easy to find the right risk management tool for your needs. Since every organization is different in terms of its requirements, we have compiled a list of the 11 most popular third-party risk management solutions or TPRM tools available today. We hope that this post will help you make an informed decision about which TPRM tool suits your business best.
SignalX
SignalX is an end-to-end platform that allows users to perform a wide range of automated due diligence checks on entities across various industries. We offer a suite of services ranging from primary screening to advanced investigations. Our customers include banks, investment funds, private equity firms, law firms, hedge funds, venture capital firms, family offices, M&As, IPOs, and other businesses.
In addition, we also provide an effective third-party risk management solution to assess financial, legal, reputational, and compliance risks associated with new vendors, suppliers & business partners.
Onetrust
Onetrust boasts of being the 2020 Forrester Wave Leader for Third-Party Risk Management. The company offers comprehensive TPRM tools to manage your third-party risk program. Additionally, Onetrust also offers the following tools:
- Third-party risk exchange software which has a global list of done-for-you vendor risk assessments.
- Questionnaire response automation software to help your vendors autocomplete security questionnaires.
Aravo
Aravo has a proven record of providing third-party risk management programs for the world’s top brands, including Microsoft and Google. It has massive coverage across third-party management, IT vendor risk management, supplier risk, and performance. Their offerings are tailored to meet a wide range of business needs.
Metric Stream
MetricStream’s software offers an integrated and real-time view of all your vendors. The platform efficiently integrates every aspect of third-party management, from information collection, continuous monitoring, compliance, risk mitigation, and vendor onboarding. The reports are presented elegantly in a simple, intuitive dashboard ensuring you don’t become overwhelmed by data overload.
Coupa
Coupa is another platform that helps you lessen third-party risks and compliance costs. Coupa’s tool helps you look into your vendors’ business activities and make sure they are compliant with regulations. With accurate and timely data at your fingertips, you can mitigate risks and stay away from entities that may turn out to be a business liability.
Refinitiv
Refinitiv’s platform offers screening, monitoring, and risk assessment tools fed by a robust set of accurate and inter-connected risk data – a prerequisite for compliance with financial crimes like anti-bribery and anti-corruption. Here are some salient features:
- Structured world-check risk intelligence data accredited with ISAE standard
- Early detection of red flags
- Coverage of 100% of all sanctioned entities worldwide
Deloitte
With operations in over 60 countries, Deloitte has performed more than 175,000 risk assessment checks to date. Their Artificial Intelligence and Natural Language Processing powered platform analyzes data from over 600,000 data sources across 12 languages to get you actionable and reliable insights. What’s more? You can even plug in your current platform to create a customized and integrated TPRM tool.
Deloitte’s all-encompassing third-party risk management includes:
- Screening & background checks
- Vendor monitoring
- Third-party questionnaires
- Remediation
- Remote and onsite inspections
Prevalent
Prevalent addresses cyber security and privacy risks arising out of a third party’s vulnerabilities. Its unified and automated TPRM tool is cloud-based and has standardized vendor risk assessment and vendor risk monitoring. In addition, it also offers “remediation management across the entire vendor life cycle.” Moreover, the platform can be integrated into other security solutions through its Connector Marketplace.
IHS Markit
IHS Markit’s TPRM service is branded as KY3P which offers “end-to-end third party and vendor risk management.” KY3P’s core offerings include:
- Third-party due diligence and monitoring
- Onboarding and oversight
- Shared assessments
Thomson Reuters CLEAR
Thomson Reuters TPRM tool is an “investigative platform” that offers comprehensive data on your vendors. The tools in its arsenal include “Associative Analytics, Negative News, and World-Check” which leverage real-time data to present a wholesome picture of your third party relationships with potential suppliers, investors, vendors, and other targets.
Trace International
Trace International’s Third Party Management System (TPMS) offers due diligence on an unlimited number of third parties. The best part is that they do not charge a set-up fee to access its platform. Existing due diligence customers of TRACE can access their TPMS without an additional fee and consolidate their due diligence process. Their customizable suite allows you to:
- Monitor third-party relationships
- Track vendor onboarding decisions
- Assess third-party risk
If you are a compliance officer, aligning your company’s compliance policies will be a breeze with TRACE’s TPMS.
How to Choose the Right TPRM Tool or Software for Third-party Risk Assessment?
Not every third party risk management tool may be the right fit for your organization. Your requirement may depend on your risk appetite and the amount of time and money you want to spend on this exercise. Start with a simple approach if you do not have enough resources. As an example, Google’s search engine can be used to determine whether a supplier has been involved in any legal proceedings or regulatory investigations. For a thorough understanding of your company’s risks, you would need a third party risk management tool.
What Are Some Key Considerations when Choosing a Third Party Risk Management Tool?
There are many things to consider before you decide which TPRM tool to use. Here are some key considerations:
Costs
The cost of using a third-party risk assessment tool depends on what kind of services you require. A basic package may only cover screening and vetting, while a premium package may offer a lot more. Here are some questions to ask.
- How much does it cost?
- Is there a free trial version available?
- Are there discounts?
- Can you pay per month instead of upfront?
Data quality and availability
It is essential to understand the quality of the data being fed into the third party risk management tool. If the data is inaccurate or incomplete, then there could be false positives.
- Are the datasets being pulled from credible and reliable sources like government agencies and regulators?
- Are the data sources updated regularly?
- Does it offer integration with existing platforms?
Timeframe
It is also important to consider the amount of time it takes to complete an assessment on a target. Here are some key questions to ask.
- How long does it take to process the assessment?
- Will it require additional staff training?
- Do they provide ongoing support?
- Is it possible to automate the process so that it runs 24/7 without human intervention?
- Does the tool provide reports that help you monitor the progress of the tasks?
Ease of use
Another thing to consider is how easy it is to use the TPRM tool. Both user experience and interface need to be taken into account. Here are some key things to consider.
- Is the platform intuitive?
- How well does it integrate with your existing systems?
- How much documentation is provided?
- Does the tool come with user manuals?
- Does it allow customization?
Conclusion
Your company can gain better insight into third-party relationships using third party risk management tools. Having access to real-time information allows your team to make informed business decisions. Additionally, TPRM tools help you manage third-party risks proactively. By doing so, you can significantly reduce exposure to risky deals with third parties.
Frequently Asked Questions
What are TPRM tools?
TPRM stands for third-party risk management. These are tools that help companies identify and manage their exposure to third parties. They are used by business entities to assess their third-party relationships and mitigate associated risks.
Who uses TPRM tools?
Companies that deal with customers, partners, suppliers, and employees face significant challenges in managing third-party risk. A TPRM tool helps them understand these risks and mitigate them through proactive measures.
Why do I need a TPRM tool?
A TPRM tool provides visibility into the quality of your third-party relationships. It helps you monitor changes in your vendor base and detect emerging risks early. This allows you to proactively address issues before they escalate into more severe problems.
How is third-party risk different from internal risk?
Internal risks are risks arising from within your business. In contrast, third-party risks are risks arising from external factors such as associated vendors and suppliers.
Is third-party risk management just another compliance requirement?
In business, regulatory compliance is the adherence of organizations to laws, regulations, and guidelines. On the other hand, third-party risk management is a business strategy designed to help companies identify and manage their third-party risks.
Is third-party risk management really necessary?
Yes. A lot of businesses run into trouble because their vendors and suppliers unexpectedly turn rogue. It’s not uncommon for companies to suffer losses because of inadequate third-party risk management practices. An effective risk management process helps your organization steer clear of unforeseen adverse business situations.
How do you handle third-party risks?
There are three main ways to manage third-party risks:
1) Identify potential risks
2) Mitigate those risks
3) Monitor and report on the effectiveness of mitigation efforts
