What is TPRM in Cybersecurity? A Complete Guide to Vendor Risk Management

Third-party risk management (TPRM) in cybersecurity refers to identifying, assessing, monitoring, and controlling third-party risks. Third-party risks are risks introduced by external entities such as vendors, suppliers, cloud providers, and contractors with access to your systems, processes, or data. It ensures your partners don’t become the weak link that compromises your organization’s security posture. 

Third-party connections are now among the most targeted weak points in enterprise security. Even with robust internal defenses, a single vendor with weak security controls can make you vulnerable to attacks. As organizations expand their digital ecosystems, the attack surface grows exponentially. This makes managing third-party risk a compliance requirement and a core pillar of enterprise cyber resilience. 

What does TPRM mean in cybersecurity? 

TPRM in cybersecurity means managing the risks that external vendors, suppliers, cloud providers, and partners bring into an enterprise’s security environment. While you can manage internal IT risks, third-party risks are more complex to govern because they extend beyond the enterprise ecosystem. 

In practice, TPRM covers risks introduced by a wide range of third parties, including vendors and suppliers for business-critical functions, contractors, and consultants, cloud and SaaS providers and strategic partners. 

But TPRM does not exist in isolation; it is a key pillar of the broader Governance, Risk and Compliance (GRC) framework. While GRC sets the tone for enterprise-wide accountability, security, risk, and regulatory alignment, TPRM ensures that the same principles are extended across the vendor and partner ecosystem. 

Why is TRPM important in cybersecurity? 

Third-party risk is not abstract. It’s behind some of the most impactful attacks in the recent past. 

TPRM is crucial in cybersecurity as it helps safeguard organizations against risks introduced by vendors, suppliers, and partners. It ensures that external access never undermines data security, compliance, or business continuity. 

For instance, the Target breach in 2013 started with a compromised HVAC vendor, leading to 40 million stolen payment card records. More recently, the 2021 Kaseya ransomware attack spread through remote monitoring software, impacting over 1500 businesses. 

These attacks highlight an apparent reality: attackers often target third parties because they are easier targets. Third-party risk Management (TPRM) is crucial for safeguarding data, operations, and trust. 

In fact, industry research shows that 59% of data breaches happen due to third parties or vendors with whom they have shared sensitive information. The attack surface grows larger if you rely on SaaS tools, cloud providers, and supply chain partners. 

In addition, regulatory frameworks like SOC 2, ISO 27001, and HIPAA require vendors to adhere to the same security standards as the enterprise itself. Failure to manage third-party risks increases the chances of a breach and exposes organizations to fines, legal costs, and reputational damage. 

Third-party Risk Management (TPRM) is critical to modern cybersecurity. It ensures external partners don’t become the weakest link, helping enterprises protect their data, operations, compliance standing, and brand trust.

Types of third-party risks in cybersecurity

Every third-party relationship comes with benefits, but it also carries risks. Identifying the type of risks you could be exposed to helps you stay one step ahead, always. Here are the most common types of third-party risks you need to be aware of: 

Cybersecurity risk

Vendors and partners with security controls can expose you to data breaches. With vulnerabilities in a third party’s system, hackers can access sensitive internal information and customer data. Weak defenses can also leave you vulnerable to ransomware and phishing attacks. 

Compliance risk

Compliance with laws and regulations doesn’t just apply to you; it also extends to your vendors. If your vendors fail to comply, mishandle sensitive data, or violate labor or environmental laws, your company will face fines, blocked deals, or failed audits. 

Reputational risk 

Reputational risk occurs when a third party’s actions damage your company’s perception. This could stem from a data breach, regulatory violation, or behavior that doesn’t align with your standards. Trust takes years to build and seconds to lose, so due diligence and ongoing monitoring of vendors are essential. 

Financial risk 

Third-party failures can hit your bottom line in various ways, like penalties, remediation costs, or even lost customers. Critical services may be disrupted if a partner lacks resources or goes out of business. 

Operational risk 

Operational risk arises from disruptions in an organization’s regular operations. For instance, a vendor facing downtime or failing to deliver will directly impact your operations. If a cloud provider faces an outage, your customer-facing apps go offline too. As a result, the operational impact can be immediate and costly. 

The earlier you recognize these risks, the better prepared you’ll be. A straightforward TPRM program helps you strengthen protection when it matters most. 

TPRM in cybersecurity framework 

A practical TPRM in cybersecurity framework will vary according to your organization. However, the most effective frameworks share a few core elements that ensure risk assessment and oversight throughout your relationship. Here are the main elements of TPRM in cybersecurity: 

Risk identification & classification 

Not all vendors pose the same level of risk. Identify every vendor, partner, cloud service provider, and supplier you work with and categorize them by criticality and potential impact. A high-risk vendor should ideally undergo deeper, more frequent reviews, while low-risk partners can be monitored with lighter-touch controls. 

Vendor due diligence and onboarding assessments

Due diligence provides a baseline view of a vendor’s security posture before you engage with them. This includes security questionnaires, certifications, or audits, and ensures contracts reflect requirements like breach notifications or audit rights. 

Continuous risk monitoring 

The dynamic nature of vendor risk makes you susceptible to new threats, technologies, or business shifts. Continuous monitoring of controls and risk reviews through scans, reviews, or threat intelligence helps you stay ahead of vulnerabilities. Critical vendors should undergo deeper, more frequent reviews than low-risk partners. 

Alignment with industry frameworks 

Anchoring your TPRM program to standards like NIST and ISO 27036 adds structure and credibility. The NIST cybersecurity framework provides guidance for managing risk across suppliers, while ISO 27036 specifically addresses information security in supplier relationships.

Reporting and remediation 

Effective TPRM programs don’t stop at identifying and monitoring risks. They track, report, and drive action. Clear reporting lines help escalate issues to leadership. To hold vendors accountable, you must also implement a structured remediation process. This process creates visibility across the supply chain and strengthens enterprise-wide risk management. 

The TPRM process for cybersecurity

Step 1: Vendor inventory and classification 

Start by identifying every third party your business engages with, including SaaS providers, IT contractors, cloud platforms, logistics partners, etc. Once you have a complete picture, group vendors by their risk level. 

After building an inventory, classify vendors along the type of data they access, the inherent risk they pose, and the criticality of their service. High-risk vendors deserve deeper oversight, while lower-risk ones can be reviewed with lighter checks. 

Step 2: Due diligence & risk assessment 

Are your vendors safe enough to engage with? Before vendors gain access to your system, they should meet your data protection, compliance, and reliability standards. You can’t leave risk assessment to guesswork. 

To perform due diligence and assess risks accurately, you can use techniques like security questionnaires and review certifications such as ISO 27001 and SOC. 

Step 3: Risk scoring & prioritization 

In the next step, you must translate those assessments into risk scores. Risk scoring weighs the likelihood of a risk-related incident and its potential business impact. 

A reliable TPRM tool like Sprinto AI can help you score vendor risk with precision. Following this, prioritization ensures your team spends the most effort on the vendors that carry the most significant risk, like those storing sensitive customer data, rather than spreading resources evenly across all third parties. 

Step 4: Control implementation & monitoring 

Put the right controls in place based on the vendor’s risk profile. This includes implementing stricter access policies in contracts and deploying encryption and/or MFA. 

However, ensuring vendor oversight with frameworks like SOC 2, HIPAA, GDPR, or ISO 27001 is the most crucial part. Mapping to the framework strengthens your security oversight and provides a deeper, framework-driven perspective on vendor risks. 

Step 5: Third-party incident response & remediation 

Every response plan should include action plans for GRC incident management. Sometimes risks come to light before an actual incident, for instance, during onboarding or routine assessments. 

If a vendor shows significant gaps, you shouldn’t wait for them to resolve everything independently. Raise the concerns, agree on a plan to fix them, and update contracts with clear security obligations where needed. You can also increase monitoring to keep a closer watch. If the vendor risk is too severe, relying on a backup vendor may be prudent. 

Step 6: Continuous reporting & updates 

Regularly inform your stakeholders and leadership about vendor risks, compliance, and progress on fixes. Feed these into your broader GRC framework to provide a complete picture of enterprise risk. 

Here, vendor oversight isn’t treated as a one-off project but an ongoing discipline that becomes a part of your daily operations. 

Challenges in TPRM for cybersecurity 

Even with a straightforward process, third-party risk management for cybersecurity comes with its own share of challenges. Knowing these challenges upfront helps you tackle them more effectively: 

Manual vendor risk assessments 

Manual steps like long questionnaires and spreadsheets make vendor reviews inconsistent. It is time-consuming and prone to error. Often, the results are too late and outdated. Automation can help you remove these roadblocks and do the heavy lifting for your business. 

Lack of visibility into vendor security practices

Even after onboarding a vendor, many organizations lack complete insight into how their security posture evolves. New risks can build up unnoticed without continuous monitoring until they surface as breaches or compliance failures. 

Resource-heavy compliance checks 

Compliance frameworks like SOC 2, HIPAA, GDPR, and ISO 27001 require proof of vendor compliance. For teams with limited bandwidth, these checks take up significant time and effort, pulling focus away from the real problem. 

Vendors holding back security data 

Vendors are often not transparent about their security posture. They may hesitate to share details on controls, vulnerabilities, or past incidents due to reputational risk or lack of mature reporting practices. Partial or outdated data makes evaluating risks accurately, negotiating stronger contracts, or preparing for potential incidents difficult.

Best practices for TPRM in cybersecurity 

Despite the challenges, TPRM can be made practical and effective. The key is to adopt consistent best practices that simplify vendor risk management and strengthen your broader security posture. Here are the best practices to follow: 

1. Standardize vendor onboarding questionnaire 

Use uniform security questionnaires to collect the correct information from all vendors. Risks become easier to compare when all vendors are assessed along the same criteria. 

2. Establish clear SLAs and compliance requirements 

Share security and compliance expectations before contracts are signed. SLAs and compliance clauses clarify obligations, accountability, and reporting duties from the outset.   

3. Automate vendor monitoring and risk alerts 

Threats evolve faster than manual reviews can keep up. Automation provides continuous visibility and, with real-time alerts, helps you stay on top of a vendor’s security posture. This ensures you can take action before issues escalate.  

4. Perform regular assessments 

A vendor evaluated as ‘safe’ during onboarding may not stay that way. Regular and periodic assessments tailored to vendor risk tiers help identify potential vulnerabilities. At the same time, they ensure ongoing compliance before they cause any problems. 

5. Build vendor compliance into contracts

Include precise contract requirements, such as audit rights, regulatory standards, and breach reporting. This helps keep vendors accountable and gives you leverage if they fall short. 

With these practices, TPRM becomes a more proactive function than a reactive function, driving resilience and customer trust. 

Role of automation in TPRM for cybersecurity 

As vendor ecosystems expand, manual TPRM processes become redundant. Automation helps organizations stay audit-ready always by streamlining core activities such as: 

• Continuous monitoring: Manual vendor risk assessment and monitoring can never keep up with real threats. Automation helps track vendor risks in real-time and alerts you when your vendors’ security posture changes. 
• Centralized dashboards: Automation pulls data from multiple vendors into a single dashboard. Security teams get a clear view of third-party risks across the ecosystem with all this data on a single, centralized dashboard. 
• Automated evidence collection: No more chasing vendors for documents. Automated systems collect and map evidence against compliance requirements, saving time and reducing errors. 
• Faster audit preparation: Audits no longer have to scramble for documents. Automation keeps evidence continuously updated, mapped to relevant frameworks, and stored in one place. 

How Sprinto simplifies TPRM in cybersecurity 

Vendor risk management is one of the most resource-intensive parts of cybersecurity for many organizations. Spreadsheets, scattered assessments, and back-and-forth with vendors often slow down the process and leave teams with blind spots. 

Sprinto helps simplify the complexity by making TPRM structured, continuous, and compliance-ready. 

• Pre-mapped vendor compliance checks: Sprinto links vendor risk controls directly to frameworks like SOC 2, ISO 27001, PCI DSS, and GDPR. This means vendor oversight is directly tied to compliance requirements, reducing audit gaps and making reporting more straightforward. 
• Automated vendor risk assessments: With Sprinto, risk assessment is quick, consistent, and structured. Instead of ad-hoc questionnaires, Sprinto uses tailored assessments and AI-based scoring to categorize vendors by risk. 
• Continuous monitoring and reporting: Sprinto tracks vendor activity in real-time and flags incidents like breaches within 48 hours through alerts. This ensures teams can act quickly, stay informed, and reduce impact before issues escalate. 
• Audit-ready reporting: Regarding the most painful part of TPRM, Sprinto automates evidence collection and keeps it tied to the right frameworks. In the process, it makes audits faster, smoother, and less disruptive. 

This approach has already helped companies like Mesmerise Group, which struggled to manage vendors while scaling rapidly. With Sprinto, they built a centralized vendor inventory, automated assessments, and cut down vendor management efforts by 90%. What once took days now takes half an hour a month, while achieving SOC 2, ISO 27011, and HIPAA compliance in under eight weeks. 

Ready to strengthen your TPRM framework?

Third-party risk isn’t just a compliance checkbox; it’s one of modern cybersecurity’s most active threat vectors. From data breaches to regulatory fines, vendor-related risks can disrupt operations, erode trust, and harm a brand’s reputation. A strong TPRM framework covers vendor due diligence, continuous monitoring, and vendor compliance automation, aligning with compliance requirements.  

With Sprinto, vendor risk management becomes seamless. It automates assessments, monitors risks, and ensures compliance at scale. 

Book a demo to see how Sprinto automates TPRM in cybersecurity.