How Organizations and Vendors Use a Third-Party Risk Exchange

A third-party risk exchange is a transformative concept designed to make third-party risk management (TPRM) more efficient, more effective and to allow teams to manage an increasing regulatory and risk burden without cutting corners or burning out their analysts. Essentially, an exchange operates as a centralized hub where businesses and their third parties can share and access standardized TPRM data in real-time. By employing a standardized assessment that’s validated by leading audit firms, an exchange makes it easier than ever to gather and compare vendor data.  

The exchange process has two primary users: there’s the customer organization looking to obtain third-party risk assessments and there’s the third party responding to the questionnaire. Customers fund the assessment validation process. Third parties can share their assessment results and supporting documentation with the customers of their choice, significantly reducing their assessment response workload and granting TPRM analysts access to high-quality, validated data. Though both users come to the third-party risk exchange from opposite angles, both can benefit greatly from effective utilization of the exchange model. 

How Customer Organizations Use the Risk Exchange 

Upon joining the exchange, TPRM teams gain real-time access to a wealth of comprehensive, standardized TPRM data and complete, validated assessments. The constant flow of updated risk data ensures that organizations have the most current risk profiles of their third-party vendors at their fingertips, empowering them to make informed decisions swiftly. By connecting to a risk exchange, businesses not only streamline their third-party risk management processes but also foster a collaborative environment where risk data and insights are shared, greatly enhancing the overall efficiency and effectiveness of vendor due diligence. 

Additionally, with the power of advanced analytics, they can swiftly evaluate the risk profiles of potential or existing third-party vendors. The exchange allows users to conduct routine risk assessments, monitor changes in a vendor’s risk profile continuously, and receive instant notifications of any significant risk escalations. This wealth of information enables rapid response to emerging risks. Moreover, the risk exchange’s data-first approach eliminates the need for repetitive assessments, streamlining TPRM processes and reducing workloads. 

Exchange customers get a host of benefits: 

1. Real-Time Risk Monitoring: Analysts gain instant access to updated risk profiles, facilitating continuous monitoring of third-party vendors. This enables swift response to emerging risks, safeguarding business operations. 

2. Efficiency: The automated processes reduce the time spent on manual data collection and analysis, significantly improving the efficiency of the third-party risk management process. 

3. Reduced Workload: By eliminating the need for repetitive assessments, the exchange reduces the burden on TPRM teams, freeing them up to focus on other critical tasks. 

4. Data-Driven Decision Making: The wealth of standardized TPRM data enables users to analyze both an individual vendor’s security posture and the broader industry context, meaning teams can take action based on comprehensive risk visibility.  

5. Collaboration: The exchange fosters a collaborative environment, encouraging the sharing of risk data and insights among organizations, enhancing the overall effectiveness of third-party risk management. 

6. Regulatory Compliance: The exchange aids in ensuring compliance with evolving regulatory requirements by providing comprehensive and up-to-date assessment data specific to a regulation’s provisions. 

7. Risk Mitigation: With instant notifications of significant risk escalations, TPRM teams can proactively manage risks, preventing potential crises. 

8. Scalability: The exchange can scale to accommodate the growing demands of contemporary third-party risk management, making it a sustainable solution for businesses of all sizes. 

9. Hard-to-assess vendors: Because large vendors only need to fill out the exchange assessment once, it’s much easier to get assessment data from hard-to-assess suppliers using an exchange. 

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How Third Parties Use the Risk Exchange 

As stated above, the exchange makes it easier than ever for third parties to share their risk data and prove compliance with validated responses. By participating in the exchange, third parties agree to regular audits and assessments, which can be shared with any connected organization of the third party’s choice. (The third party ultimately determines which information is shared with which user organizations.) Not only does this standardized, validated assessment data help third parties prove compliance, it also eliminates the redundant work of filling out individual assessments for each of their customers. Additionally, third parties can use the data provided by the exchange to identify gaps in their risk management practices and make improvements. 

Third-party members of an exchange also reap several compelling benefits: 

1. Transparency and Credibility: By sharing their risk data, third parties can demonstrate their commitment to efficient risk management and adherence to accepted standards, enhancing their reputation among prospective and existing users. 

2. Efficiency: Participating in the exchange precludes the need for multiple, individual audits from their customers, simplifying the due diligence process greatly. 

3. Insight and Improvement: The data provided by the exchange can help third parties identify potential areas of improvement in their own risk management strategies, enabling them to build robust and resilient programs. 

4. Business Opportunities: Demonstrating compliance and proactive risk management can attract more business opportunities, as it positions the third-party as a trusted and reliable partner. 

5. Regulatory Compliance: Regular audits and assessments help ensure that third parties stay compliant with pertinent regulatory requirements. 

6. Control Over Data Sharing: Third parties can choose which organizations have access to their data, maintaining control over their sensitive information. 

7. Risk Prediction and Mitigation: Access to shared risk data and insights can help third parties anticipate and mitigate risks before they escalate. 

Conclusion 

The strategic use of a third-party risk exchange can significantly enhance your organization’s risk management capabilities and provide your third parties with a quicker, more streamlined assessment experience. Choosing an exchange with high vendor coverage, standardized questionnaires, reputable validation, AI technology and seamless integration with your TPRM platform can provide a comprehensive, dynamic approach to managing third-party risk. 

With ProcessUnity, you can easily import assessment data from over 15,000 attested risk assessments in the Global Risk Exchange, map it to your internal risk framework and automatically prioritize third parties based on their risk profiles. This automation saves time and ensures consistent, objective risk scoring. The platform’s automated reminders for review cycles also allow for the maintenance of up-to-date risk perspectives and quickly responding to changes in a vendor’s risk status, resulting in an up-to 85% reduction in onboarding cycle time and a 50% reduction in oversight time. 

Get started on your journey to a more resilient, data-driven, and proactive third-party risk management process with ProcessUnity’s Third-Party Risk Management platform. Explore the comprehensive benefits it brings to your organization and see how seamlessly it integrates with the Global Risk Exchange. Don’t hesitate – take the next step in revolutionizing your risk management approach today. Contact us to schedule a demo or to learn more about how ProcessUnity can empower your organization. 

Learn more about the ProcessUnity Global Risk Exchange with our white paper, How the Assessment Exchange Model Revolutionizes Vendor Due Diligence.