Vendor Risk Management (VRM) involves monitoring potential risks that could arise from third-party vendors of Information Technology (IT) products and services. The process ensures that the use of such products and services doesn’t create unacceptable problems for business disruption or leave a negative impact on business performance.
VRM solutions involve a comprehensive plan for identifying and reducing business uncertainties, legal liabilities, and reputational damage. As businesses grow and increase their use of outsourcing, VRM programs become an increasingly crucial part of their risk management framework.
These programs efficiently manage data security, information security, cybersecurity, and many more important parameters. We have gathered some of the best risk vendor management software programs that take care of the latest threats and security architectures so you can focus on what you do best.
Did you know?
The average organization has 11 third-party vendors. In 2023, about 51% of organizations experienced a data breach caused by one of their vendors.
Table of Contents
9. LogicGate
Ratings: 4.8/5 from 300+ customers
Best for: Fintech, banking, hospitals, and health systems
LogicGate allows you to centralize your network and create vendor risk management processes that are robust and flexible enough to grow with your business.
It provides various Risk Cloud applications to effectively manage your third-party relationships with templates. The ISO 2001 application, for example, ensures your intellectual property and financial data are protected when working with vendors.
Pros
- Collect vendor responses and data in one location for visibility and reporting
- Automate tasks like inherent risk scoring and vendor email notifications
- Instantly create plans to mitigate risks associated with each vendor
Cons
- Initial set-up and application modifications can be time-consuming
The third-party compromise assessment application helps you proactively manage risk by determining the potential impact of external vulnerabilities or incidents. It provides a central register of third-party relationships and detailed information on any detected external vulnerabilities.
8. Panorays
Ratings: 4.6/5 from 450+ customers
Best for: Banking, insurance, financial services, and healthcare industry
With Panorays, you can speed up your third-party security evaluation process and gain continuous visibility while ensuring compliance with regulations such as NYDFS and GDPR.
Its automated technology gives you an overview of your suppliers’ cyber posture immediately, helping you decide whether to do business with a supplier or not. It provides reports through an intuitive dashboard and instantly alerts you of any changes to your vendors’ cyber posture.
Most companies depend on third-party vendors, making them vulnerable to a variety of risks.
Third-party risk management software helps manage those risks faster >> https://t.co/ueOanzSMOc#tpsrm #tprm #vrm pic.twitter.com/nHdmKSNOHE
— Panorays (@panorays) January 2, 2023
Pros
- Innovative security ratings based on the supplier’s responses to the smart questionnaire
- Automatically detects when suppliers do not adhere to your security requirements
- Excellent customer support
Cons
- User interface can be improved
The platform makes it easy for you to interact with your vendors and resolve issues without phone calls, emails, or spreadsheets. By putting less time and effort into security evaluations, you can focus more on scaling your business.
7. Prevalent
Ratings: 4.9/5 from 100+ customers
Best for: Services, finance, and healthcare industry
Prevalent can efficiently handle your vendor risk assessment and monitoring needs. It provides on-demand risk intelligence for more than 10,000 vendors and delivers real-time insights into both cyber and business risks from over 500,000 sources.
The platform unifies risk assessment, third-party management, and threat monitoring to provide a complete 360-degree view of risk. It makes it easy to onboard vendors, evaluate them against custom questionnaires, map assessments with external threat data, create detailed reports of all types of risk, and facilitate the remediation process.
Pros
- Instant access to thousands of industry-standard vendor risk profiles
- Exceptional performance metrics and predictive Analytics
- Flexible licensing options
Cons
- Report functionalities are limited in the portal
Prevalent also helps you maintain accuracy and visibility with regular health checks and program reviews. Their solutions are backed by expert professional services and managed services, so you can get the most of your third-party risk management program.
6. ProcessUnity VRM
Ratings: 4.9/5 from 900+ customers
Best for: Finance, services, and healthcare industry
ProcessUnity’s VRM tools protect companies by mitigating risk from third parties, vendors, and suppliers. It allows customers to effectively monitor and evaluate every aspect of vendors, from initial onboarding to ongoing due diligence and monitoring.
The platform is integrated with simple, standardized questionnaires that help companies determine whether or not the vendor or supplier requires deeper due diligence. It contains a few internal yes/no questions, and affirmative answers add certain points to the risk score.
Overall, ProcessUnity’s automation and standardization make it easy for customers to deploy risk management tools, streamline regulatory reporting, and improve overall visibility into vendor performance.
Pros
- Provides a framework for categorizing and prioritizing risks
- Captures important contract metadata
- Interactive dashboards & reports
- Countless configuration and flexible deployment options
Cons
- Steep Learning Curve
The platform is suitable for both startups (that have just started with vendor risk) and large companies (that have the most complex program requirements).
5. Venminder
Ratings: 4.8/5 from 950+ customers
Best for: Financial services
Venminder combines software and the human element to review vendor artifacts, questionnaires or documentation, and provide detailed assessments. Using these assessments, you can ensure that you have no weak link vendors.
The platform continuously monitors your vendors and notifies you when it detects cybersecurity vulnerabilities and financial viability risks. Its evaluation methods have been designed to meet the strictest regulatory guidelines and achieve industry best practices.
More specifically, Venminder assesses the vendor’s SOC reports, financial data, cybersecurity risks, consumer-impacting practices against regulatory requirements, and business continuity risks.
Pros
- Provides an overall risk rating and informed next steps
- Configurable to fit your model
- Robust custom reporting tool
- Unlimited custom vendor data points
Cons
- No way to request documentation collection through the dashboard
It also provides a ranking on your vendor’s preparedness for data protection laws in 6 key areas to ensure you meet the law’s requirements for risk management and consumer rights.
4. OneTrust Vendorpedia
Ratings: 4.8/5 from 900+ customers
Best for: Finance, services, and manufacturing industry
OneTrust Vendorpedia simplifies third-party risk management for everyone involved. It automates your workflows to streamline the vendor or supplier lifecycle, from onboarding to risk reduction and offboarding.
The platform offers support for control frameworks, laws, and standards, such as CSA, ISO, HIPAA, NIST, CCPA, PCI, and many more. It allows you to evaluate any kind of third-party using any standard — all of this can be done from a single dashboard, where you can discover and monitor granular risks.
You can make regulator-ready risk reports to streamline audits and demonstrate compliance. Draw diagrams to illustrate the flow of data and the components involved. Integrate with business intelligence software programs to extract more granular detail from data and identify trends.
Pros
- Streamline vendor onboarding with workflow automation
- Access assessments on 70,000+ vendors
- Create automation rules and adjust risk scores
- Automated cloud-based questionnaires
- Generate audit-ready reports
Cons
- Some modules lack pre-configured workflows
- UX is pretty clunky
The Standard version of Vendorpedia (with limited features) costs $500 per month and goes all the way up to $4000 per month.
3. SecurityScorecard
Ratings: 4.7/5 from 1100+ customers
Best for: Banking, finance, retail, insurance, finance, and healthcare enterprises
SecurityScorecard helps businesses quickly understand, rate, and continuously monitor potential security threads, non-intrusively and from an outside-in perspective. It uses an A-F rating scale so that companies easily understand and enhance their cybersecurity infrastructure.
The platform comes with a security intelligence engine that gathers and analyzes various cybersecurity signals. Its high-level dashboard displays the most critical risk issues for your vendors. You can drill down into issues and discover patterns based on millions of data points sorted by severity.
SecurityScorecard’s proprietary rating technology is used by more than 1,000 organizations for self-monitoring and third-party risk management.
Pros
- Offer A-F ratings across 10 groups of risk factors
- Uses advanced machine learning algorithms to reliably predict risk
- Automated cloud-based questionnaires
- Lets you create an easy-to-understand reporting framework
Cons
- Takes a cookie-cutter approach, which provides surface-level findings
- User interface can be improved
Plus, it is the only vendor assessment solution that leverages machine learning to align questionnaire responses with SecurityScorecard Ratings, providing a complete 360-degree view of risk and allowing companies to objectively pinpoint risk.
2. BitSight
Ratings: 4.7/5 from 1000+ customers
Best for: Finance, service, government agencies, and educational institutions
BitSight aims to change the way businesses address cyber risk. It has extensive visibility into key areas of cyber risk that are associated with breaches, such as open ports, desktop and mobile applications, file sharing, and compromised systems.
BitSight continuously monitors large pools of objective and independently verified data to deliver important cyber risk metrics, actionable security ratings, and security benchmarks. This helps businesses improve their cybersecurity and manage risk efficiently and effectively.
It also has a robust community of cyber risk professionals. The platform allows customers to collaborate internally, as well as externally with third parties, to resolve the most severe or common risk.
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— Bitsight (@Bitsight) January 4, 2024
Pros
- Provides high-level summation of vendor risk
- Provides geographic and company-specific data
- Lets you prioritize resources to drive efficient risk reduction
- Active community of cyber risk professionals
Cons
- Suitable for large companies with massive budgets
As per their official website, 20% of global governments use BitSight data to protect national security, and 50% of global insurance premiums are created by BitSight customers.
1. UpGuard Vendor Risk
Ratings: 4.8/5 from 600+ customers
Best for: Finance and services
UpGuard is a fully integrated platform that is always up-to-date and constantly improved. It makes it easy to monitor and evaluate your vendor’s security posture.
The security platform smartly categorizes risks into six groups: network security, email security, phishing and malware, website risks, reputation risk, and brand protection. It provides real-time insight into the vendors’ misconfigurations, security performance, and risk profile.
It comes with powerful questionnaire tools, which means you don’t have to create questionnaires from scratch. You can choose from 12 industry-standard questionnaires, set deadlines, send reminders, and track the status of each outgoing questionnaire.
The basic plan (with limited features) starts at $5,249 per year and goes all the way up to $83,999 per year.
Pros
- Easy to understand for non-technical stakeholders
- Intelligent risk categories
- Real-time risk insights
- Pre-built questionnaire tools
- Prebuilt reporting for your third-party risk management program
Cons
- The administration interface is somewhat complex
You can rely on UpGuard’s security engine, as it is already scanning millions of businesses and billions of data points every day for security issues and misconfigurations. More specifically, UpGuard is responsible for securing about 2 billion records from companies like GoDaddy, Verizon, Facebook, and Amazon Web Services.
Frequently Asked Questions
Who are third-party vendors?
A third-party vendor can be anyone who provides products or services to your company. You pay for those products and services as vendors do not work at your company. Common vendors include:
- Services providers such as consultants and advisors
- Manufacturers and suppliers of various items, ranging from groceries to Integrated circuits
- Short and long-term contractors who do specific jobs for your company for a specific period of time.
How to establish a vendor risk management program?
A lot of time and effort goes into establishing a successful vendor risk management program. The overall process can be divided into six stages:
- Create governance documentation appropriate to your company.
- Compare all vendors and select the one that meets your company’s requirements
- Finalize a contract draft (include every minor term and condition in the draft)
- Monitor continuously and perform due diligence on a periodic basis
- Internally audit vendor risk management program
- Create detailed reports describing vendor portfolio and risk assessments, along with new regulations and ongoing due diligence.
What are the benefits of using vendor risk management software?
A good VRM software more than pays for itself by making the risk management process more efficient and precise while minimizing vendor risk and stress. It makes the due diligence process more diligent and helps you expand the availability of your services.
Furthermore, it allows you to access all the information (related to vendors, procurements, contracts, and reviews) in one place. You can easily track your important vendor documents and analyze the effects of vendor relationships on your company’s risk index.
What’s the future of third-party risk management software?
According to the FutureMarketInsights report, the global third-party risk management market size will reach $19.7 billion by 2032, growing at a CAGR of 14.7%.
The increasing number of third-party suppliers, rapidly changing regulations across different regions, and the need to regularly monitor and analyze vendor performance are key factors driving the demand for third-party risk management solutions.
North America is expected to be the most mature region in this market, as many of the major vendors are located in the United States and Canada.
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