Third-party risk
Definition
The information security, operational, legal, or reputational risk introduced to an organisation by its relationships with external parties including vendors, suppliers, cloud providers, and contractors. Third-party risk is not limited to data breaches; it includes service disruption, compliance exposure, and reputational harm arising from the vendor's conduct.
Related terms
- Due diligence questionnaire (DDQ)
- A structured questionnaire sent to a prospective vendor before onboarding, asking the vendor to describe its security controls, certifications, incident history, subprocessor...
- Offboarding controls
- The set of actions taken when a vendor relationship ends: revoking access credentials, recovering or destroying shared data, terminating network connectivity, and...
- Right-to-audit clause
- A contractual provision that gives the organisation the right to audit or assess the vendor's security controls, either directly or through a...
- Subprocessor
- A third party engaged by a vendor (the processor) to perform part of the service that involves the organisation's data. Under GDPR...
- Vendor tiering
- The classification of vendors into risk tiers, typically Tier 1 (critical), Tier 2 (significant), and Tier 3 (low), based on factors such...
Explained in
- Third-Party Risk Management ProgrammeThe information security, operational, legal, or reputational risk introduced to an organisation by its relationships with external parties including vendors,...