Automating Third-Party Risk Management in Cloud

72% of UK financial services firms have faced operational disruptions, financial losses, or reputational harm due to third-party incidents in the last three years. With cyberattack-related losses quadrupling since 2017, managing third-party risks in cloud environments is no longer optional. Here's why automation is the solution:

• Manual processes are failing: 59% of organisations lack the visibility to manage third-party risks effectively.
• Automation saves time and money: It can reduce compliance costs by 40% and cut routine risk assessment times in half.
• AI-driven monitoring: Real-time insights and predictive analytics flag vulnerabilities before they escalate.
• Regulatory demands: UK laws like GDPR and DORA require meticulous oversight of third-party relationships.

Key benefits of automation:

• Faster vendor onboarding (from 2 days to 15 minutes in some cases).
• Proactive risk detection with AI.
• Centralised data management for audits and compliance.

Automation isn’t just about efficiency - it’s essential for managing risks in today’s interconnected, cloud-first world. The future of third-party risk management lies in combining automated tools with human oversight to stay ahead of emerging threats.

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Key Components of Automated Third-Party Risk Management

Creating an effective automated third-party risk management (TPRM) system requires several interconnected elements working in harmony. These components play a critical role in helping UK businesses efficiently oversee their third-party relationships, from onboarding to continuous monitoring. Together, they reshape TPRM for a cloud-first world.

Automated Supplier Onboarding and Due Diligence

A strong TPRM system begins with a streamlined approach to vendor onboarding. Traditional processes often involve lengthy email exchanges, manual reviews, and disjointed approval workflows. Automation removes these inefficiencies by introducing standardised workflows that simplify vendor onboarding.

Modern platforms gather vendor information using digital questionnaires and verify the data through external sources. They can assign risk scores during the initial screening, automatically determining the level of due diligence required. For instance, vendors flagged as high-risk might undergo detailed security assessments, while low-risk suppliers can follow a quicker approval process.

Venminder’s platform is a great example of this in action. It offers features like side-by-side vendor comparisons, centralised management of vendor requests, and automated risk assessments during onboarding. Once contracts are signed, all documentation is stored in a centralised repository, ensuring a complete audit trail from day one [2].

Automation also simplifies document collection and review. Instead of chasing vendors for missing certificates or compliance documents, the system sends automated reminders, keeping things on track without manual intervention.

AI-Driven Risk Assessments and Monitoring

Artificial intelligence takes TPRM to the next level by shifting from a reactive to a proactive approach. AI algorithms continuously scan vast datasets to flag potential issues before they escalate. This includes monitoring factors like financial instability, compliance breaches, cybersecurity risks, and operational inefficiencies across a vendor portfolio [4].

AI analyses unstructured data from sources such as news, regulatory filings, social media, and industry reports to create detailed risk profiles. When unusual patterns are detected, the system generates real-time alerts, enabling risk teams to act quickly.

For example, Baptist Health uses platforms like Censinet RiskOps to automate and synchronise IT risk management efforts across multiple vendors [3].

Machine learning plays a key role here, allowing systems to improve over time. As AI processes more vendor data and learns from outcomes, it becomes better at predicting risks. This adaptability ensures risk scoring aligns with a company’s specific needs and industry standards.

Many AI-powered platforms also integrate threat intelligence from global sources, offering early warnings about vulnerabilities that could impact vendor networks [3]. These insights further enhance automated TPRM strategies, enabling organisations to stay ahead of emerging risks.

Centralised Data Collection and Workflow Management

A unified platform is another cornerstone of automated TPRM. Centralising vendor-related data, workflows, and processes addresses one of the biggest challenges in traditional systems: scattered information across spreadsheets, emails, and disconnected tools.

These platforms cover the entire vendor lifecycle, from initial screening to contract management [6].

Aravo is an excellent tool for managing end-to-end processes, with tailored workflows, emails, and chase cycles built into the automated system capability. Aravo's strength for me lies in its traceability and high level of automation.
– Social Accountability Manager, Global Manufacturing Firm [5]

Modern solutions often feature no-code workflow technology, allowing businesses to customise processes without needing advanced technical skills [6]. This flexibility is especially important for UK businesses navigating diverse vendor types and regulatory requirements.

Contract lifecycle management is another key feature. Automated systems can track contract renewal dates, compliance deadlines, and prompt necessary reviews. This avoids the risk of contracts auto-renewing under unfavourable terms or lapsing unexpectedly.

Seamless integration with existing systems is crucial [6]. Whether connecting to ERP platforms, financial tools, or security systems, a centralised platform acts as the coordination hub for information flow. For example, one manufacturing firm successfully integrated Aravo with their SAP ERP system to handle complex global screening requirements across multiple risk areas [5].

These platforms also offer advanced reporting tools, with customisable dashboards and role-based access. Risk managers can view high-level summaries of vendor portfolios, while procurement teams dive into detailed performance metrics. This ensures each stakeholder gets the information they need without unnecessary clutter.

When it comes to audits, centralised platforms make life much easier. Storing all vendor documentation, risk assessments, and compliance evidence in a searchable repository allows regulatory auditors to quickly access the necessary files. This demonstrates the organisation’s commitment to strong third-party oversight.

How to Implement Automation: Steps and Best Practices

To effectively implement automation in third-party risk management (TPRM), it’s essential to build on your organisation's existing strengths while addressing specific needs. This process can be broken into three key phases: assessment, tool selection, and workflow design. By following these steps, you can create an automated system that delivers tangible results instead of becoming an underused investment.

Assessing Current TPRM Maturity

Before diving into automation, take a step back and evaluate your current TPRM practices. This is a crucial step to understand where automation can make the most impact. Without this groundwork, automation efforts may fail to deliver value.

A 2021 AuditBoard survey found that nearly 37% of respondents rated their TPRM maturity as either nonexistent or reactive [8]. This highlights a common pitfall: organisations often try to automate immature processes without first creating a solid foundation.

A maturity assessment should cover key areas such as organisational structure, policies, risk assessment methods, third-party oversight, supporting technologies, regulatory readiness, and alignment with standards. Using a maturity framework can help identify gaps and prioritise resources, especially for higher-risk vendors.

Regular benchmarking against industry practices can help identify where automation could close capability gaps. For instance, organisations struggling with vendor visibility might benefit from tools that enable continuous monitoring.

But the key thing is to start with an honest assessment of where you are and where you'd like to go. [7]

Once you’ve assessed your current state, the next step is selecting the right automation tools.

Selecting and Configuring Automation Tools

After evaluating your maturity level, focus on choosing an automation platform that addresses your identified gaps. This requires a clear understanding of your organisation’s needs, existing technology, and growth plans. Involve stakeholders from IT, security, compliance, and legal teams to ensure all perspectives are considered.

When selecting a tool, keep these factors in mind:

• Compatibility with your current tech stack and ability to scale with vendor growth.
• User-friendly interfaces and customisable dashboards.
• Support for industry-specific requirements and regulatory obligations.
• Full cost evaluation, including licensing, maintenance, training, and integration.

Once you’ve chosen a tool, proper configuration is key. Regularly updating configurations, policies, and criteria ensures the tool stays relevant as your vendor landscape evolves. Clear communication with vendors is also essential for promptly addressing security concerns.

With the tools in place, the focus shifts to creating workflows that enhance risk management processes.

Building Scalable and Customisable Workflows

Workflows should simplify repetitive tasks while leaving room for human oversight in more complex scenarios. The goal is to standardise processes without sacrificing flexibility.

For example, vendor onboarding workflows can systematise the collection of information and integrate risk assessments, ensuring consistent evaluations. Risk-tiering is another critical component, allowing organisations to allocate resources based on vendor risk levels. High-risk vendors might require detailed security assessments and frequent monitoring, while low-risk vendors can follow simpler processes.

In April 2025, Built Technologies improved their risk management by using UpGuard to streamline vendor assessments. They combined automated ratings with additional evidence and insights, scheduling third-party risk reviews based on UpGuard's Vendor Tiering feature [9].

Continuous monitoring is another essential workflow element. Incorporating threat intelligence feeds and compliance tracking enables real-time issue detection. Data-driven insights can guide risk decisions and refine workflows over time. Integration with existing systems ensures smooth data flow and avoids information silos.

Workflows should also include regulatory tracking and risk-tiering to maintain compliance and oversight. Automating compliance reporting can save time and reduce the risk of errors. Finally, workflows must remain adaptable to address emerging risks and incorporate new assessment methods as needed.

Benefits and Limitations of Automated TPRM

Automation in third-party risk management (TPRM) offers a mix of opportunities and challenges. Understanding both sides allows organisations to make smarter decisions about adopting and implementing these systems.

Benefits and Trade-Offs in Automation

The advantages of automating TPRM are clear and measurable. With human error responsible for over 90% of cyber breaches [10], automation's precision plays a critical role in reducing risks. This is especially important as 82% of companies grant third parties access to their cloud data [10], making error reduction essential for security.

Automation also drives efficiency. Automated vendor risk assessments can cut operational costs by up to 80% [10], and 76% of IT leaders believe automation boosts the productivity of their security teams [10]. By removing repetitive tasks, skilled professionals can focus on higher-level, strategic responsibilities.

But automation isn't without its challenges. Here’s a closer look at the benefits and limitations:

While the benefits are compelling, challenges like cultural resistance and lack of standardisation can hinder automation’s effectiveness. For instance, 43% of organisations don’t have standardised methods to assess vendor cybersecurity, limiting the impact of automation [13]. Additionally, 69% of enterprises still manage TPRM manually [14], often due to resistance to change or reliance on familiar processes.

Transparency is another key issue. AI algorithms can operate as black boxes, which complicates audits and makes it difficult to explain certain risk decisions [12]. Cost is also a factor - beyond the initial investment, organisations must consider expenses related to licensing, integration, training, and ongoing maintenance.

Despite these challenges, automation can deliver strong results when thoughtfully implemented. For example, small-to-mid-sized vendors, which account for 60% of data breaches [14], often lack the resources for robust security. Automated systems can help monitor these vendors effectively, ensuring they don’t fall through the cracks.

The best approach combines automation with human oversight. Routine tasks like assessments and monitoring can be automated, while more nuanced decisions and strategic vendor relationships should involve human judgment. This hybrid model not only maximises efficiency but also ensures that complex risks are managed with the necessary insight and care.

A centralised approach to TPRM allows an organisation to connect dots across verticals and see the big picture. – Rohit Mathur, EY Global Risk Consulting Strategy Leader and EMEIA Risk Consulting Leader [11]

Before diving into automation, organisations need to assess their current processes. A maturity assessment can help identify gaps, ensuring that automation enhances rather than exacerbates existing issues.

Use Cases and Metrics

Real-world applications clearly demonstrate how automation is reshaping Third-Party Risk Management (TPRM) metrics. Across the UK, organisations are seeing tangible improvements in vendor management by incorporating strategic automation into their processes.

Faster Vendor Onboarding

In the UK, traditional vendor onboarding processes often take up to two days, bogged down by paperwork, multiple approval layers, and repetitive data entry. However, Maextro's Business Partner Portal (BPP) solution has slashed onboarding times to just 15 minutes - a staggering 88% time reduction.

Traditional manual onboarding procedures consume up to two days and are susceptible to errors due to manual data entry. However, with the automation expertise of BPP, the onboarding process becomes remarkably efficient, taking as little as 15 minutes to complete, ensuring swift, error-free integration. [15]

For businesses managing hundreds of vendors annually, this efficiency isn't just about saving time - it also boosts vendor satisfaction and ensures quicker compliance and operational readiness.

Enhanced Compliance and Audit Preparedness

Compliance has become a growing concern for UK organisations, with vendor vulnerabilities responsible for over 50% of data breaches [16]. Automated TPRM systems tackle this issue by enabling continuous monitoring and standardised assessments. For example, the HITRUST certification framework has proven its value, with fewer than 1% of certified environments experiencing breaches in 2022–2023, compared to double-digit rates across the industry [16].

A notable success story comes from Certa's deployment at a P&C Financial Service Firm in the UK, which reduced regulatory risk in customer onboarding and compliance processes [17]. While manual processes typically address about 10% of vulnerabilities each month [16], automation ensures critical vulnerabilities are prioritised and resolved, delivering consistent audit readiness. This proactive approach not only strengthens compliance but also yields significant cost savings over time.

Lower Costs Through Process Optimisation

The financial benefits of automating TPRM processes are both striking and measurable. According to ProcessUnity Vendor Risk Management, automation can cut vendor risk management costs by up to 85% by reducing manual intervention and streamlining workflows [18]. For instance, one financial services firm reduced its review time from 40 hours to just 10 hours - a 75% time saving that translates into potential annual savings of hundreds of thousands of pounds in labour costs [19].

The broader financial picture also supports these efficiencies. Deloitte's post-COVID analysis highlighted increased TPRM spending as a critical factor in economic recovery during uncertain times [18]. Organisations with centralised TPRM structures have reported significant benefits: 47% achieved cost savings, and 92% reinvested in programme improvements [11].

These savings stem from reduced manual labour, fewer compliance breaches, faster onboarding, and better risk detection. With the IMF reporting that cyberattack losses have more than doubled since the pandemic [11], the case for automated TPRM becomes even stronger.

Hokstad Consulting is at the forefront of this transformation, using cloud automation to help UK organisations optimise their TPRM processes. Their tailored solutions ensure robust compliance and deliver substantial cost efficiencies, making them a trusted partner for businesses navigating today's complex risk landscape.

Conclusion

This guide highlights how automation plays a crucial role for UK businesses in managing third-party risks within cloud environments. With 53% of organisations reporting data breaches linked to third parties and the average cost of such breaches reaching £7.5 million [22], automated Third-Party Risk Management (TPRM) systems offer tangible benefits. These include cutting compliance costs by 40%, reducing routine assessment times by half, and improving resource use by 30% [1].

Yet, only 13% of companies have fully embraced technology and automation in their TPRM programmes [21]. This leaves a clear opportunity for forward-thinking UK businesses to gain an edge by implementing strategic automation solutions.

To bridge this gap, organisations need a structured, step-by-step approach. Start by creating a comprehensive register of critical vendors, reviewing contracts and service level agreements (SLAs), and establishing key performance indicators (KPIs) that align with security standards [20]. Prioritising enterprise-wide visibility over siloed methods is essential - centralised TPRM systems consistently deliver better maturity and effectiveness compared to hybrid models [11].

As cyber threats grow more sophisticated and supply chains expand at an annual rate of 11.2%, manual processes simply can't keep up [10]. Companies that adopt automation now will be better equipped to manage tomorrow’s complex risk landscape while maintaining the flexibility needed to support business growth.

For UK organisations looking to strengthen their TPRM capabilities, expert guidance can make all the difference. Hokstad Consulting provides the expertise to deliver tailored, cost-efficient automation solutions. Their approach ensures businesses meet regulatory demands while achieving the operational efficiencies necessary for long-term success in today’s interconnected world.

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