Fixing Third-Party Risk Before It Fails an Audit

The average global bank relies on thousands of third-party vendors — from cloud providers to offshore developers, to regtech and data services. And with regulators raising expectations on third-party oversight (TPRM), banks that rely on spreadsheets or informal controls are exposed to unnecessary audit and compliance risk.

🔍 A 2023 EY study found that 58% of banks failed to maintain real-time risk visibility across their critical vendors.

The Root of the Problem

Most institutions struggle because their vendor oversight models are fragmented or outdated. Common issues include:

• Tiering vendors by intuition instead of exposure
• Missing or outdated onboarding checklists
• Poor control testing documentation
• Inconsistent SLAs and contract reviews
• No dashboard or system of record
• Limited linkage to risk, compliance, or IA teams
• This leaves the institution vulnerable — not only to exam findings but also operational disruptions.

What a Scalable TPRM Framework Looks Like

At PGMP, we help financial institutions build integrated, scalable third-party risk programs. Key elements include:

📌 Tiering Models — Based on data access, operational criticality, and regulatory exposure

📝 Onboarding Kits — Standardized by risk tier with required documentation

🔁 Review Cycles — Annual and event-based assessments by tier

⏱️ SLA Language — Structured wording on breach reporting, issue response, and penalties

📊 Dashboards — Real-time reporting on due diligence, renewals, and audit-readiness

🧩 According to ISACA, firms with integrated TPRM programs are 35% more likely to pass regulator and internal audit reviews without escalations.