Third Part Risk Management (TPRM)
15/06/2023Institutions and organizations outsource their operations nowadays, due to the increasing need for support in their businesses. The need for auditing third-party information risks is also emerging as a critical matter since outsourcing software development, knowledge systems procurement, and internet infrastructure are becoming more prominent.
Employees outsourced from third-party companies may have the same privileges as the officials of the institutions and organizations such as having the same physical access and remote connection authorization. Therefore, it is a matter of necessity to evaluate and analyze notable aspects with regard to information security while working with third parties. Security risks should be emphasized, and a third-party relations policy should be formulated to meet this necessity criterion.
Additionally, outsourcing third parties should be further analyzed and evaluated for the effective use of sources and security technologies within this framework.
What is TPRM and How it is Functioning?
Third-Party Risk Management (TPRM) is the process that analysis and minimizes the risks arising from third-party companies such as suppliers, vendors, partners, or service providers.
Organizations benefit from third-party companies to supply their needs for products and services outside their area of expertise. Consequently, private, and corporate data of organizations might be shared with third parties while. At this point, TPRM helps organizations to take the necessary safety measures for maintaining the security and privacy of corporate data in the context of information risks. Additionally, TPRM creates a reliable structure by assuring safety measures in third-party processes and applications.
Risks of information security which are arising due to the dependency of organizations on third parties in their operational and administrative processes are minimized due to the implementation of TPRM.
It is critically important to make an accurate and in-depth identification and designation of the processes, assets, data, and data access run by third parties under the same corporate structure to create a sustainable and reliable supply chain. Furthermore, detection of security vulnerabilities, identification of the solutions and remedies to these vulnerabilities, adjustment to the international standards of information security and supply chain management and finally avoiding network-based losses (such as data, service, operational, workforce, time, prestige, and money) are also critically important factors for the formation of reliable and sustainable third-party relation.
Why TPRM is Important?
TPRM is a critical process in avoiding disclosure of private information, loss of trust, and prestige of the organizations. TPRM, therefore, maintenance has become obligatory by some international and state-level regulations. The following regulations and laws are concerned with the protection of personal data.
Within the scope of the Personal Data Protection Law (KVKK in Turkish); data controllers must make sure that the data processors (in our case third parties) are maintaining the same security level as them regarding personal data protection while providing service for their organizations. Data processors and controllers are jointly responsible for protecting personal data according to the 12th article, 2nd sub-article of the concerned law.
Within the scope of the Presidency Digital Transformation Office Information and Communication Security Guide, organizations need to take some actions regarding TPRM that are by article 3.5.3 (Third-Party Security) of the Guide at the national level.
The other benefit of TPRM is that it facilitates the identification of existing or emerging situations in the third party that create risks in terms of information security and reliability of the organization.
Benefits of TPRM
Regulations and Standards Regarding TPRM
Author
Nazlı NALCI SÖLPÜKER
Security Analysis and Compliance Services Team Leader