KPMG on the strategic imperative of Third-Party Risk Management (TPRM)

One of the central themes of the webinar was the importance of creating an operating model that can scale with the growing volume and complexity of third-party relationships.

Leading organizations are moving away from manual, fragmented processes by:

• embedding TPRM into enterprise risk management and business processes.
• establishing clear governance and ownership across the three lines of defense.
• applying risk-based tiering to focus resources on critical suppliers.
• improving data quality and integrating technology platforms.
• leveraging managed services where appropriate to increase efficiency while maintaining oversight.

Rather than performing more assessments, mature organizations redesign their operating model to ensure risk management remains effective as their supplier landscape evolves.

Operational resilience cannot be achieved through periodic vendor assessments alone. Business continuity and resilience considerations should be embedded throughout the entire third-party lifecycle; from planning and due diligence to contracting, ongoing monitoring, renewal, and eventual exit.

Organizations should ensure that resilience requirements are translated into contractual obligations, continuously monitored through governance processes, and supported by regular testing and clear ownership across business, procurement, risk, IT, and compliance functions.

By adopting this lifecycle approach, organizations are better positioned to maintain critical services, respond effectively to disruptions, and meet increasing regulatory expectations.

Artificial intelligence offers significant opportunities to improve the efficiency and effectiveness of TPRM programs. While many organizations are already exploring AI, the webinar highlighted that successful implementation depends on strong governance and high-quality data.

AI can support activities such as:

• document and contract review.
• automated questionnaire processing.
• risk scoring and monitoring.
• identification of subcontractor dependencies.
• continuous monitoring of external risk signals.

However, AI should augment and not replace human judgement. Critical risk decisions continue to require appropriate oversight and accountability.

Reliable data remains one of the biggest differentiators between mature and less mature TPRM programs. Organizations with complete, consistent, and well-governed third-party data are significantly better positioned to make informed risk decisions, support regulatory reporting, and leverage automation effectively.

Improving data quality is therefore not simply a technology initiative, it is a prerequisite for scalable risk management and future AI adoption.

Whether your organization is establishing a new TPRM framework or enhancing an existing program, KPMG can support every stage of your TPRM journey.

Our multidisciplinary teams help organizations:

• assess the maturity of their TPRM capabilities and identify improvement opportunities.
• design and implement fit-for-purpose governance frameworks and operating models.
• strengthen operational resilience and business continuity across the third-party lifecycle.
• implement technology solutions and AI-enabled capabilities to improve efficiency.
• offer managed services that cover the entire TPRM lifecycle, or targeted support for due diligence, ongoing monitoring, and third-party assessments.
• prepare for evolving regulatory requirements, including DORA, NIS2, and other sector-specific expectations.

By combining deep regulatory knowledge, industry experience, and technology expertise, KPMG helps organizations transform TPRM into a strategic capability that supports resilience, regulatory compliance, and long-term business value.