As the new year unfolds, security and third-party risk management teams are navigating an increasingly complex risk landscape, with supplier due diligence and third-party risk management emerging as top priorities. A striking 94% of CISOs recently expressed significant concern about third-party cybersecurity threats, with those in larger enterprises—where reliance on numerous third-party services is greater—feeling particularly vulnerable. Although a comprehensive and multifaceted approach is necessary to address this complex challenge, CISOs acknowledge that there is no one-size-fits-all approach, but rather a combination of different cyber risk management tools is needed.
As a result, many organizations are turning to vendor risk management (VRM) platforms that streamline the process of assessing, monitoring, and mitigating risks associated with vendors and include a variety of vendor risk management tools. Selecting the right solution depends on a variety of factors, including industry-specific regulations, organization size, vendor ecosystem complexity, and security maturity, your organization’s level of risk tolerance, and of course, your budget.
In addition to these factors, your organization must ask itself: Which platform most effectively manages the growing risks posed by our third parties? From compliance management to risk scoring and vendor collaboration, we highlight the must-have features that distinguish top vendor risk management (VRM) platforms on the market today.
1) Comprehensive Risk Assessment and Scoring
With an increasingly complex supply chain that includes third, fourth, and fifth parties, many organizations find it difficult – if not impossible – to categorize the level of risk each of their vendors and third parties pose. The top vendor risk management platforms also offer a comprehensive risk assessment process, delivering risk scoring that helps to prioritize vendors based on their risk level. These scores take into account the levels of both residual and inherent risk an organization is willing to take on, which may evolve as the business relationship and other various internal and external factors.
The most advanced vendor risk management platforms such as Panorays also take into account the dynamic nature of third-party relationships, new vulnerabilities and breaches in your external attack surface, and the evolving business context of risks. With a Risk DNA score that relies on AI to gather data in real time, such as historical data about vendor performance, past security incidents, compliance records, and other metrics about third-party risk, it can also accurately forecast future third-party risks. With accurate risk scoring, organizations can be more proactive in onboarding vendors who pose a high level of risk, finding alternative vendors, or consider effective mitigation strategies that properly defend against it.
2) Continuous Monitoring and Real-Time Alerts
Ransomware attacks, cloud security misconfigurations, supply chain attacks, IoT device vulnerabilities, and AI-enhanced phishing and social engineering attacks are just a few of the types of emerging risks organizations continue to face as we march into 2025. Continuous cyber security monitoring and real-time alerts help enable organizations to stay on top of these types of emerging risks and react to them immediately, mitigating damage. When combined with threat intelligence, continuous monitoring also delivers insight into new attack vectors, actors, and tactics to keep you one step ahead of cybercriminals.
In addition, many types of unusual user behavior such as unauthorized access, privilege escalations, attempts at credential theft, exploitation of vulnerabilities, and DDos attacks can be detected through continuous monitoring. These types of attacks can lead to compliance violations or data breaches.
3) Compliance Management and Regulatory Support
During an audit, VRM platforms deliver regulators, external stakeholders the necessary documentation and evidence your organization needs to demonstrate compliance with specific industry standards. Cybersecurity questionnaires customized with templates according to frameworks and standards to ensure adherence to regulations such as DORA, GDPR, CCPA, PCI DSS, and other privacy regulations can also save time.
More advanced solutions leverage AI to continuously monitor vendors for compliance, delivering alerts in real-time at the earliest instance of non-compliance. They may also include compliance management that automates tracking and documentation for third-party compliance to ensure that the data is up-to-date and readily accessible for audits and reviews.
4) Vendor Onboarding and Offboarding Management
With the explosion in the number of SaaS services in an increasingly competitive space, organizations have the opportunity to quickly switch vendors far more easily than in the past. However, the typical vendor assessment process is fragmented and manual, making it difficult to scale and meet growing demand. Top vendor risk management platforms, on the other hand, provide a streamlined vendor onboarding process to ensure their vendors meet security and compliance requirements from the start.
Advanced platforms enable automatic onboarding at scale that includes evaluating how the third party manages both internal (e.g., policy, controls, and processes) and external security (internet facing). When the business relationship is taken into context during the vendor onboarding, it more accurately determines the level of due diligence needed in the other steps of onboarding.
At the same time, proper offboarding management should not be overlooked. Proper data handling, termination of access at the end of a vendor contract, and transferring of processes and knowledge to a new team or vendor help proactively mitigate risk even after a business relationship ends. The best VRM platforms facilitate risk management throughout the different stages of the vendor lifecycle.
5) Document and Evidence Collection
Managing vendor risk demands continually evaluating data found in different vendor documents, including policies or certifications related to compliance, storing and tracking contracts, and audit reports.
Having these documents in a centralized location also facilitates greater collaboration between your organization and vendor. It also ensures a smoother audit process and makes it easier for regulators to verify compliance. Since it includes incident response plans and security protocols, it can also enable relevant team members to take swift and immediate action, minimizing damage and downtime.
Advanced vendor risk management platforms such as Panorays include AI-powered document validation that gathers relevant data from documents provided by third parties, including questionnaires, certifications and attestations (SOC2, ISO, and others) to identify relevant answers for vendor assessment questionnaires. Besides saving time and resources, the ability to access and analyze this data at a moment’s notice allows for better decision making and reduced dependence on skilled manual reviewers.
6) Advanced Reporting and Analytics
The more complex your supply chain and reliance on third, fourth, and fifth party vendors, the more detailed and extensive your reports and analytics should be for the purpose of tracking the latest evolving cyber threats, issues with non-compliance, and which vendors completed their remediation plans or are pending approval.
It should also have the capability of tailoring different reports to different stakeholders. For example, executive-level reporting should both deliver a comprehensive view of your entire third-party portfolio while pinpointing potential regulatory and security gaps. Both your senior leadership and board members can then use the data to make the most informed decisions. Compliance teams, on the other hand, would benefit from being able to compare compliance of different potential vendors side-by-side to determine their adherence to organizational standards and regulatory requirements, and selecting which vendors should receive a request for proposal (RFP).
7) Risk Remediation and Task Management
It’s not enough to identify threats, you’ll want to remediate and prioritize them to proactively defend against third-party vulnerabilities. Task management should enable you to assign, track and close remediation tasks and delegate them to various security and IT team members, both internally and with your vendor. By integrating your vendor risk management platform into existing security and IT tools, you’ll allow for greater collaboration between your organization and vendors to close cyber gaps as soon as possible. Advanced vendor risk management platforms generate remediation plans based on your vendor’s business impact, your risk appetite, and the least number of steps and effort to reach the desired level of risk.
8) Vendor Collaboration and Communication Tools
Traditional vendor risk management relies on receiving manual responses to third vendor risk assessments from third-parties, which can be frustrating when the response doesn’t include the information your organization needs. A vendor risk management platform that scales and automates risk management with your vendors would include collaboration and communication tools such as shared dashboards, in-platform messaging, and secure document sharing. This encourages greater transparency, enabling vendor engagement to resolve issues and maintain a strong working relationship for the future.
Advanced vendor risk management platforms that leverage automation and AI take this a step further, gathering data autonomously from a combination of internal vendor documents, public information, and similar responses in past vendor questionnaires. These zero interaction assessments allow for vendor risk assessments without the need to rely on constant communication from vendors. Advanced platforms also include automated remediation steps that a vendor can take to proactively mitigate risk based on third-party criticality.
9) Integration with Existing Security and IT Systems
A vendor risk management platform can’t function in a silo; it must integrate with other systems to manage vendor risk effectively and comprehensively. Integration ensures real-time data is gathered and synchronized, allowing for more accurate risk scoring, monitoring and real-time alerts.
These systems include:
- Security Information and Event Management (SIEM) systems that monitor security events in real time and provide enhanced threat detection through correlating vendor activities with external security events. It also delivers a unified view of cyber risks across the vendor’s internal and external systems.
- Enterprise Resource Planning (ERP) systems that connect vendor risk management with procurement and financial workflows to align financial and operational risks with vendor assessments.
- Governance, Risk, and Compliance (GRC) platforms that align vendor risk management with enterprise-wide risk and compliance strategies.
- Identity and Access Management (IAM) Systems that limit vendors to access to only the data that they need and can automate provisioning and deprovisioning of accounts.
10) User-Friendly Interface and Customization Options
The easier a solution is for its users, the more likely it is to be used to its fullest capacity.
Customizing key features of your vendor risk management platform, such as dashboards, ensures usability and relevance for all stakeholders, including vendors.
These include:
- Tailored dashboards that present relevant data to the right team members. These dashboards not only enhance adoption but also facilitate informed decision-making, increasing buy-in for business-critical strategies. For example, it enables IT managers to view which vendors completed their remediation plan, need to update their questionnaire responses or are pending approval. Security team managers, however, may find an analysis of the vendor risk ratings of all vendors to be of more relevance.
- Adjustable alerts. Alerts can be configured to notify relevant team members and prioritized according to their criticality and your organization’s risk appetite. They could also be based on triggers such as notifying internal security teams as to when an ISO security certification has expired.
- Role-based access controls. Allow different users access to different data based on their responsibilities. For example, HR roles would be granted access to employee records while IT roles would be allowed access to system configurations.
How to Select the Best Top Vendor Risk Management Platform
After taking a look at these essential features, your security and third-party risk management team should select a vendor risk management platform that aligns with your organization’s specific needs and risk management goals. Since these needs can evolve rapidly, it’s crucial to regularly assess the platform’s effectiveness and ensure it continues to meet organizational goals. Your business relationship with each vendor is also a dynamic factor, effecting the prioritization and mitigation of cyber risks from each vendor.
Ideally, the right platform addresses both the evolving threats in cybersecurity as a whole, your specific industry, and complexities in the supply chain. At the same time, it also provides scalability, a friendly user experience, and customization so that your organization can develop the most robust vendor risk management program to effectively defend itself against vendor-related risks.
Want to learn more about how you can optimize your risk management strategy for each unique third-party relationship? Contact Panorays to learn more.
Top Vendor Risk Management Platform FAQs
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Implementing a vendor risk management platform can take anywhere from 4 weeks to 6 months depending on its complexity, objectives, and integration requirements. It involves an initial setup phase that consists of defining objectives and scope, establishing risk assessment criteria, and setting up policies and procedures and implementation steps that include vendor inventory creation, risk assessment framework development, workflow automation setup, staff training, and integration with existing systems.
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Small businesses in particular can benefit from vendor risk management platforms because they may rely on vendors in their supply chain who supply them with critical services. In addition, they may not have internal security teams to deal with these supply chain risks, yet they are subject to the same regulations, standards, and cybersecurity risks as larger enterprises.
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Vendor risk management platforms integrate with existing security platforms such as SIEM, threat detection solutions, compliance management platforms, Governance, Risk, and Compliance (GRC) Platforms and Identity and Access Management (IAM) Systems to gather real-time data and ensure more accurate detection, mitigation, and response to attacks. Integration with these security and IT systems allows for more accurate, effective, and comprehensive vendor risk management.