In recent years, vendor risk management (VRM) has become a complicated practice as businesses aim to scale and manage potentially hundreds or thousands of vendors. With more vendors, cybersecurity risk is introduced, necessitating software and other digital solutions to adequately manage these vendors. The role of software in vendor risk management products is more important than ever now and moving forward.

Recent events, including the 2020 COVID-19 pandemic, shifts in demand, and labor shortages have shone a spotlight on supply chain resilience – or lack thereof. In response, business leaders recognize that becoming more resilient is a necessity and are looking at strategies for doing so. As a best practice, Gartner recommends that companies diversify their manufacturing networks, utilize regional or local supply chains, add buffer capacity, and more.

Repairing a weakness in your IT environment is always easier than dealing with the consequences of that weakness — like, say, a massive data breach — sometime later. This means your security team must be proficient at finding those weaknesses and assessing your IT environment’s vulnerabilities. Those vulnerabilities can include weak passwords, poor patch management, and lax security training.

Thanks to globalization and rapidly developing technology, enterprise involves more connections than ever before, and more connections means more risk in the supply chain. Supply chain risk extends past those suppliers with whom you’re doing business directly. Beyond your third-party suppliers are their suppliers, and the supply chain continues branching out from there. In today's connected world, organizations must not isolate their supply chain risk management.

Whenever an organization outsources part of its business process to an outside party, it introduces various risks to the primary organization. Third-party risk management refers to how organizations address and mitigate security risks across their entire library of vendors and suppliers. Unfortunately, third-party risk exposure can be difficult to manage and comes with many challenges organizations must address for an effective third-party risk management program.

The concept of ratings has been the accepted standard for making investment decisions. The first commercial credit reporting agency, the Mercantile Agency, was founded in 1841. While this relied on largely subjective methods of evaluation, it wasn’t until the 1960s, when credit reporting became computerized, that the industry consolidated and took off. Since then, credit and financial ratings models have progressed to become objective and trustworthy data points that inform lending decisions.

In today's interconnected and digital world, businesses face increasing risks, particularly in the realm of cybersecurity. To address these risks and ensure the operational resilience of financial institutions, industries and governments push for regulatory frameworks. Two prominent examples are the EU's Digital Operational Resilience Act (“DORA”) and the UK's Prudential Standard PS21/3 (“PS21/3”).

In an era of escalating financial crimes, the spotlight shines brightly on the rising concerns in the realm of cybersecurity. According to a recent survey, a staggering 68% of UK risk experts anticipate a surge in financial crime risks over the next year. These apprehensions echo globally, with 69% of executives and risk professionals worldwide foreseeing an upswing in financial crime risks, predominantly fueled by cybersecurity threats and data breaches.

The increasing sophistication and frequency of cyber threats have exposed companies to significant risks, including data breaches, financial losses, and reputational damage. Investors have become deeply concerned that these risks can negatively impact their investment decisions. As we have previously discussed, companies and their shareholders must tackle the significant and constantly changing challenge of understanding cybersecurity risk.