Organizations rely heavily on third parties vendors, suppliers, contractors, and service providers to deliver essential services and support growth. However, this increased reliance introduces new risks, from data breaches and regulatory violations to reputational damage and operational disruptions. That’s why ongoing monitoring is a crucial component of an effective third-party risk management (TPRM) program.

Unlike one-time due diligence during onboarding, ongoing monitoring ensures that vendors remain compliant, secure, and aligned with your business standards throughout the relationship. Here are 12 best practices to help you strengthen your ongoing monitoring strategy and safeguard your organization from third-party risks.

1. Establish a Risk-Based Monitoring Framework

Not all vendors pose the same level of risk. Start by categorizing third parties based on their risk level such as critical, high, medium, or low depending on factors like data access, regulatory exposure, and business impact.
This allows you to allocate monitoring resources effectively, focusing more attention on high-risk vendors while still maintaining appropriate oversight of lower-risk ones.

2. Define Clear Monitoring Objectives and Metrics

Set clear goals for what your ongoing monitoring aims to achieve. These could include ensuring regulatory compliance, maintaining cybersecurity standards, or tracking service performance.
Then, establish key performance indicators (KPIs) and key risk indicators (KRIs), such as incident frequency, audit findings, SLA adherence, or data breach notifications. Consistent metrics make it easier to identify trends and detect potential issues early.

3. Automate Monitoring with Technology Solutions

Manual monitoring is time-consuming and prone to human error. Leverage third-party risk management platforms or automated tools that continuously track vendor activities, scan for security incidents, and flag anomalies in real time.
Automation also enables continuous data collection from public sources, cybersecurity databases, and regulatory watchlists, providing deeper visibility into potential threats.

4. Monitor Regulatory and Compliance Changes

Laws and regulations evolve rapidly, and non-compliance by a vendor can put your organization at risk. Make sure to track regulatory changes relevant to your industry and geographic locations such as GDPR, HIPAA, or CCPA and assess how they affect your third parties.
Regular compliance checks and certifications help ensure vendors remain aligned with new requirements over time.

5. Conduct Periodic Risk Assessments

Even after onboarding, vendors’ risk profiles can change due to mergers, leadership changes, cybersecurity incidents, or financial instability. Conduct regular reassessments quarterly, biannually, or annually, depending on the vendor’s risk level.
These assessments should include updated questionnaires, security audits, and reviews of financial health to detect shifts in their risk posture.

6. Continuously Monitor Cybersecurity Posture

Cyber threats are one of the most significant third-party risks. Implement tools that continuously monitor vendors’ security ratings, vulnerability reports, and breach histories.
Also, request regular evidence of security controls, penetration testing, and incident response plans. Proactive monitoring helps ensure that your partners maintain robust defenses against evolving cyber risks.

7. Establish Strong Communication Channels

Ongoing monitoring is a collaborative effort. Build clear communication channels with vendors to share updates, raise concerns, and resolve issues promptly.
Regular check-ins, quarterly business reviews, and security briefings help maintain transparency and foster a stronger, more resilient partnership.

8. Monitor Performance Against SLAs

Third-party risk isn’t limited to security or compliance operational performance matters too. Continuously track how vendors perform against their service-level agreements (SLAs) and key deliverables.
Early detection of performance issues allows you to intervene before they escalate into business disruptions.

9. Leverage External Intelligence Sources

Don’t rely solely on self-reported information from vendors. Incorporate external data sources such as news feeds, sanction lists, legal filings, and cybersecurity threat intelligence.
This helps you identify red flags like lawsuits, data breaches, or negative press that could indicate elevated risk levels.

10. Document and Centralize Monitoring Activities

Proper documentation is essential for visibility, accountability, and audit readiness. Maintain a centralized repository of all monitoring activities, reports, assessments, and communications.
This not only streamlines internal reviews but also demonstrates due diligence to regulators and stakeholders.

11. Create Clear Escalation and Remediation Procedures

When issues arise whether it’s a security breach or a compliance gap you need a structured plan for responding quickly and effectively. Define escalation paths, roles, and timelines for addressing risks.
Collaborate with vendors on remediation plans and monitor progress until the issue is resolved. This proactive approach reduces potential damage and strengthens trust.

12. Continuously Improve Your Monitoring Program

Third-party risk management is not static. Continuously review and update your monitoring strategy based on new threats, lessons learned, and industry best practices.
Solicit feedback from internal stakeholders, analyze incident trends, and incorporate new technologies to keep your program adaptive and effective.

As third-party ecosystems become more complex, ongoing monitoring is no longer optional it’s essential. By implementing these 12 best practices, organizations can gain deeper visibility into their vendor landscape, detect emerging risks earlier, and respond more effectively to potential threats.

Remember: third-party risk doesn’t end after onboarding. Continuous oversight is the key to safeguarding your organization’s data, reputation, and operations while maintaining strong, secure, and compliant vendor relationships.

Sky BlackBox

Sky BlackBox is AI-empowered Vendor Risk Management that maximizes security while minimizing effort. With a suite of three integrated apps, it addresses VRM challenges for clients, vendors, and service providers. Offering 470x more accuracy, 6x lower operational costs, and 9x faster results compared to traditional methods.

Sky BlackBox © L5, 100 Market St, Sydney, NSW 2000