Discover why traditional third-party risk management falls short amid rising global volatility. Learn how organisations can shift from siloed, compliance-driven approaches to proactive, collaborative, and intelligence-led TPRM in this new article by Risk Ledger CEO Haydn Brooks.
Today’s third-party risk management (TPRM) programmes often fall short because of a fundamental disconnect between people, technology and processes. While a study from EY showed that a growing number of organisations are using enterprise-wide TPRM programmes, internal teams still often work in silos, cross-department collaboration is patchy, and external information sharing is limited. At the same time, many organisations rely on more traditional tools and solutions that offer little real-time visibility beyond the first tier of the supply chain. Processes remain rooted in static, compliance-driven models that are designed to check boxes rather than uncover risk.
This fragmentation creates a dangerous ecosystem of blind spots. Without aligned teams, scalable processes and platforms, and continuous monitoring, modern threats – especially those emanating from fourth parties and shared dependencies – go unnoticed. The result is not just operational inefficiency but strategic vulnerability. Resources are wasted chasing outdated information, and risk management efforts become reactive rather than preventative. To succeed, TPRM must evolve into a collaborative, intelligence-led function that brings people, platforms and processes into lockstep, turning fragmented oversight into a much more resilient, end-to-end strategy. TPRM thus needs to transition from a mainly reactive and compliance-driven exercise into an active-cyber defence discipline.
Technology alone won’t fix third-party risk management. Despite significant investment in tools and systems, many TPRM programmes struggle to deliver because they fail to address the fundamental human dynamics at play. The urgency to get it right is growing too. With the financial fallout of the MOVEit Transfer breach in 2023 estimated to have amounted to almost $10 billion, the business case for a more holistic, people-and-process-driven approach has never been clearer.
Too many TPRM efforts are isolated – run in silos, disconnected from other teams, and lacking the internal and external collaboration needed to be truly effective. When departments like security, compliance, and procurement don’t align, the result is delayed supplier onboarding, inconsistent due diligence, and, ultimately, heightened risk exposure. This internal disconnect leads to missed signals and allows vendors with inadequate controls to slip through unchecked.
The traditional approach to third-party risk management is no longer fit for purpose. Supplier assessments are frequently treated as mere compliance checkboxes, rather than as part of a dynamic, ongoing security practice.
The problem extends beyond the organisation. Limited collaboration with suppliers creates a reactive risk posture. Without access to the security teams at suppliers and clear communication protocols, and without shared visibility into third-party security practices, organisations struggle to respond swiftly when incidents occur. However, perhaps the greatest missed opportunity lies at the industry level. Without stronger sector-wide collaboration, we fail to pool intelligence, hold shared suppliers to higher standards, and elevate our collective security posture.
To move forward, we must reframe how we think about risk—not just as a technology issue, but as a human challenge. The future of TPRM depends on breaking down barriers and building a culture of strategic collaboration between security teams.
Too many organisations still rely on spreadsheets or basic SaaS tools that serve primarily as digital versions of static questionnaires. While these may check the compliance tick-box, they offer little in terms of actionable intelligence and critically, they don’t support information sharing across organisations.
One of the most pressing issues is the lack of real-time visibility. Most TPRM tools rely on point-in-time assessments that can be outdated almost as soon as they are completed. In a threat environment that evolves rapidly, this leaves organisations exposed to emerging risks that remain undetected until the next review cycle, when it could already be too late.
Beyond visibility, the limitations of current tools make scalability a serious challenge. Many platforms lack the flexibility and automation required to support increasingly complex supplier ecosystems. As third-party and fourth-party relationships multiply, so does the volume of work – much of which remains manual, inefficient and prone to error. Without the right technology in place, scaling a TPRM programme becomes increasingly unsustainable.
A significant blind spot lies in the inability to map and monitor fourth parties and hidden concentration risks – where multiple suppliers rely on the same underlying provider. These dependencies can create systemic risks that could disrupt entire supply chains when a single point of failure is triggered. Even when alerts surface, poor contextual intelligence leaves security teams overwhelmed by noise, wasting time on low-priority issues while real threats go unchecked.
The traditional approach to third-party risk management is no longer fit for purpose. Supplier assessments are frequently treated as mere compliance checkboxes, rather than as part of a dynamic, ongoing security practice. As a result, they create a false sense of confidence and leave organisations vulnerable to risks that emerge between review cycles.
This process problem is further exacerbated by a lack of thorough verification. Many organisations rely solely on data from suppliers, which may be outdated, incomplete or overly optimistic. With little validation or follow-up, risk decisions are made on shaky ground, increasing the likelihood of exposure to unseen threats.
Across some sectors, this checkbox mentality has become deeply embedded. TPRM is seen as a necessary formality, not a critical line of defence. The consequence of this view has meant the assessments have become superficial and fail to capture real risk.
Reactive security leaves organisations constantly on the defensive, scrambling after the threats have already hit. The UK’s Cyber Security and Resilience Bill will bring this into sharper focus, introducing stricter requirements around supply chain security and reinforcing the urgency for a more robust approach to third- and fourth-party risk management. It signals a clear shift: traditional, compliance-driven models are no longer sufficient. What’s needed now is a smarter, faster model that is proactive and intelligence-led. That means real-time verification, tighter collaboration, and a strategy built for what’s next, not just what is happening now. Effective TPRM is not just an upgrade, it’s a necessity.
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