What is TPRM?
TPRM is the process of identifying, assessing, and monitoring security risks from vendors and third-party partners.
TL;DR
- Third-Party Risk Management (TPRM) is the framework for handling security, privacy, and compliance risks introduced by vendors and partners.
- It covers the vendor lifecycle: due diligence, contract requirements, continuous monitoring, and offboarding.
- Security ratings and continuous monitoring give TPRM programmes objective, ongoing evidence.
Short definition
Third-Party Risk Management (TPRM) is a risk management framework for handling the security, privacy, and compliance risks introduced by vendors, service providers, and third-party business partners.
Why does third-party risk matter?
Most major security incidents in recent years entered through the vendor channel — connected third-party systems, leaked partner credentials, or compromised supply-chain software. TPRM keeps those risks visible, measurable, and managed throughout the relationship lifecycle.
A good TPRM program covers pre-contract due diligence, periodic security assessments, continuous monitoring, and clear contractual clauses. In Indonesia, TPRM is increasingly important given regulations such as the PDP Law and OJK guidance for the financial sector.
What are some practical examples?
- A bank assesses its core banking provider's security before an outsourcing engagement.
- A hospital monitors its medical records storage vendor for patient data leaks.
- A retail company re-reviews payment vendor security ratings every quarter.
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