Third Party Risk Management
Third party risk management is the process of identifying, assessing and mitigating risks that may arise from interactions with external parties. It includes the identification of potential risks, the assessment of those risks and the implementation of controls to mitigate or eliminate those risks.
Third party risk management is a critical component of any organization’s overall risk management strategy. By identifying and assessing risks associated with third parties, organizations can ensure that they are taking appropriate steps to mitigate those risks.
There are a number of factors to consider when assessing third party risk, including:·
- The nature of the relationship between the organization and the third party
- The level of control that the organization has over the third party
- The degree to which the third party is integrated into the organization’s business processes
- The geographic location(s) of the third party.