Third Party Risk Management - What is it?

What is Third Party Risk Management?

As per TPRM definition, it is a risk management strategy that deals with identifying and reducing the various risks that a company faces while dealing with third parties. All businesses must deal with third-party agencies like vendors, partners, service providers, suppliers, contractors, or others. When a company deals with an external party, there are certain risks involved which must be managed to prevent any untoward outcomes. 

The ambit and activities under TPRM can vary according to the domain, size of the company, regulatory guidelines, products and services, type of industry, and several other factors. Risk management, must be an integral part of supply chain management to ensure uninterrupted business.