The Rising Tide of Third-Party Risk Management: Why Managed TPRM Services Are the Future

As businesses increasingly rely on third-party vendors to drive innovation, efficiency, and global reach, and extend the services they provide to their customers, the complexity of managing these relationships has skyrocketed. The Third-Party Risk Management (TPRM) market is booming, with projections estimating growth from USD 7.41 billion in 2024 to USD 27.84 billion by 2032, at a CAGR of 18.2%. This surge reflects a growing recognition that third-party relationships, while critical, can also introduce significant risks to your organization, including cybersecurity breaches, regulatory non-compliance, and operational disruptions.

At Vistrada, we’ve seen first-hand how mid-sized to large enterprises in regulated industries, like financial services and manufacturing, are grappling with these challenges. This article explores why the market is shifting toward managed TPRM services, the potential pitfalls of running an in-house program, and how Vistrada’s Managed TPRM model delivers unmatched value, backed by compelling Total Cost of Ownership (TCO) and Return on Investment (ROI) metrics. 

The Market Challenge: Navigating a Complex Risk Landscape 

Today’s business ecosystems are more interconnected than ever, with companies outsourcing critical functions like cloud services, IT solutions, and supply chain operations. However, this reliance comes with escalating risks:

• Rising Cyber Threats: Cyberattacks targeting third-party vendors have surged, with a 300% increase in incidents since the COVID-19 pandemic.
• Regulatory Pressures: Stringent regulations like GDPR, CCPA, and the SEC’s new rules on third-party financial transactions demand robust compliance frameworks. Non-compliance can result in fines up to 4% of global revenue, pushing organizations to prioritize TPRM.
• Global Supply Chain Complexity: As businesses expand globally, managing diverse vendor ecosystems across jurisdictions increases operational and compliance risks. The World Trade Organization notes a 6% annual growth in global trade services, amplifying these challenges.

These factors create a “perfect storm” of risks, as Gartner describes, driving rapid adoption of TPRM solutions to safeguard data, ensure compliance, and maintain operational resilience.

Why an ‘In-House’ Approach Could Fall Short 

Organizations tackling TPRM on their own may need to rely on the strength and reliance of their internal teams and manual processes. However, there are several factors that might introduce risk into this risk management approach.

• Resource Constraints: Building an in-house TPRM program requires significant investment—$400,000 to $500,000 annually for mid-sized enterprises, covering personnel, technology, and assessments. (Deloitte TPRM Survey (2023–2024): Benchmarks for TPRM program staffing, costs, and vendor management practices) Internal teams often lack the specialized expertise needed to manage complex vendor risks effectively.
• Lack of Scalability: Manual processes, such as spreadsheet-based tracking or periodic assessments, struggle to keep pace with dynamic vendor ecosystems. Only 9% of organizations achieve advanced TPRM maturity, leaving many exposed to gaps in real-time monitoring.
• Time and Complexity: Developing risk questionnaires, analyzing responses, and tracking remediation activity can be time-intensive. This diverts resources from core business priorities and risks delays in identifying critical vulnerabilities.

The Shift to Managed TPRM Services

Recognizing these challenges, businesses are increasingly turning to outsourced, managed TPRM services for their efficiency, expertise, and scalability. A managed services approach offers:

• Specialized Expertise and Focus: Providers like Vistrada bring niche knowledge in regulatory frameworks (e.g., NIST, CMMC, CRI, ISO) and cybersecurity, ensuring thorough risk assessments and compliance. By leveraging this specialized focus, Vistrada streamlines third-party risk management (TPRM) requirements, delivering customized strategies that enhance client security, compliance, and operational efficiency.
• Cost Efficiency: Outsourcing eliminates the need for in-house teams, training/enablement, and costly technology investments, offering predictable pricing at a fraction of the estimated TCO of $400,000–$500,000 for DIY programs.
• Proactive Risk Management: Managed services can leverage advanced analytics and continuous monitoring to identify and mitigate risks in real-time, unlike static DIY assessments.

The market reflects this shift, with the TPRM services segment expected to continue to grow significantly due to the complexity of managing third-party risks and the need for tailored solutions. Enterprises in regulated industries, such as FSI and healthcare, are particularly drawn to managed TPRM for its ability to deliver compliance and resilience without straining internal resources. 

Vistrada’s Managed TPRM Model: A High-Level Overview

Vistrada’s Managed TPRM program is designed to deliver end-to-end vendor risk management with minimal client effort, tailored to mid-sized and large enterprises. Our high-level program structure includes:

• Governance and Reporting – Vistrada and client stakeholders align to ensure accountability and continuous improvement by establishing the governance framework, including risk acceptance and approval workflows, reporting and communications, and annually reviewing and refining the program. Executive stakeholder sponsorship provides value by supporting audit and compliance needs, boosting stakeholder confidence, and driving ongoing program optimization.
• Vendor Discovery and Onboarding - Vistrada establishes a robust vendor risk foundation by inventorying and classifying vendors, assessing their business criticality and impact, and streamlining onboarding processes, including guidance and advisory on vendor contract reviews. The value delivered includes eliminating oversight gaps, aligning with operational priorities, and enabling tailored risk assessments to ensure a solid starting point for vendor management.
• Risk Assessment and Due Diligence – Vistrada identifies and evaluates vendor risks through deploying customized risk questionnaires, analyzing responses alongside external data, and scoring and ranking vendor risks. This process delivers value by prioritizing critical risks, ensuring regulatory compliance, and providing actionable insights for effective risk management.
• Risk Remediation and Mitigation - Vistrada focuses on mitigating risks and enhancing vendor performance by tracking remediation plans, monitoring vendor actions and improvements, and collecting evidence of progress. The value includes reducing operational and reputational risks, strengthening vendor partnerships, and ensuring audit-ready documentation for accountability.
• Ongoing Monitoring and Management - Aimed at maintaining continuous vendor risk oversight, this phase involves monitoring program performance and risk indicators, periodically reassessing high-risk vendors, and providing TPRM dashboards and reports. The value delivered includes proactively identifying emerging risks, adapting to regulatory changes, and enhancing decision-making transparency.

This model, refined through our decades of risk management experience, directly supports compliance with frameworks like NIT, CMMC, CRI, and ISO while addressing operational, financial, and reputational risks. 

Total Cost of Ownership: The Value of Managed TPRM

Vistrada’s Managed TPRM program offers a compelling TCO compared to an in-house approach:

• Total Cost of Ownership (TCO): At ~$120,000 annually (for up to 50 vendors), our service is significantly lower than the average $400,000–$500,000 annual cost for an in-house program (including staff, training, technology platform, and tools).
• Scalability and Speed: Our program accelerates vendor onboarding and delivery of a TPRM risk register, enabling faster compliance and risk reduction. Our program is also designed to seamlessly scale as your business supplier ecosystem scales.

We’ve designed our managed service to be a cost-effective option, delivering measurable value without the overhead of hiring and managing an internal program.

Vistrada’s Value Differentiators

What sets Vistrada’s Managed TPRM apart in a competitive market?

• Industry-Tailored Expertise: Our deep experience in regulated sectors like financial services and manufacturing ensures compliance with standards like GDPR, SOX, and CMMC, addressing unique risk profiles.
• Agile, Client-Centric Delivery: We prioritize rapid onboarding and iterative improvements, minimizing client effort while accelerating the delivery of a mature third party and supply chain risk management program. Our governance framework aligns stakeholders for seamless execution.
• Proactive Risk Mitigation: Our service focuses on continuous monitoring and real-time insights, reducing residual risks through prioritized remediation (e.g., addressing MFA gaps in high-risk vendors).
• Competitive Positioning: Compared to larger firms, Vistrada offers agile, tech-driven solutions at lower costs, leveraging standardized tools for scalability and transparency. 

Conclusion: Partner with Vistrada for TPRM Success

The rapid growth of third-party risk management services reflects an undeniable truth: third-party risks are becoming increasingly more complex and critical to manage internally. As regulatory scrutiny intensifies and cyber threats evolve, businesses need a partner that delivers expertise, efficiency, and measurable value.

Vistrada’s Managed TPRM program offers a proven solution, combining industry-tailored governance, streamlined assessments, and continuous monitoring to safeguard your operations. At a fraction of the cost of in-house programs, we deliver compliance, resilience, and peace of mind in weeks, not months.

Ready to transform your third-party risk management? Contact Vistrada today to learn how our managed services can protect your business and drive long-term success.