Top 10 Predictions for Third-Party Risk Management in 2025

The third-party risk management (TPRM) landscape is in a state of rapid transformation. With mounting regulatory demands, technological advancements, and a growing need for resilience, businesses are rethinking how they monitor, manage, and mitigate risks from third-party vendors.

The TPRM landscape of 2025 will demand more agility, foresight, and collaboration from organizations worldwide. At Supply Wisdom, we are committed to empowering businesses with continuous monitoring solutions that keep them ahead of the curve.

As a global leader in TPRM solutions, Supply Wisdom has identified ten critical trends that will reshape the way organizations approach TPRM in 2025. By embracing AI-driven insights, predictive analytics, and proactive risk management, companies can turn TPRM from a regulatory requirement into a strategic advantage through the next year and beyond.

1. AI-Driven Insights Begin to Replace Static Risk Assessments

Quickly departing are the days of static, questionnaire-based vendor assessments.  While foundational assessments will still be required, AI-driven insights will become the norm for subsequent assessments in 2025, powering real-time analysis across thousands of third-party relationships. Automation—including a move to consolidate governance, risk, and compliance; procurement; and monitoring tools into one platform—will allow organizations to go well beyond compliance checklists. This will result in continuous, contextualized risk intelligence on everything from financial health to geopolitical threats. The shift from manual to automated insights will accelerate decision-making, reduce human error, and provide a more accurate view of the third-party landscape.

2. The Rise of Predictive Risk Modeling

2025 will mark a leap in predictive risk modeling, enabling companies to anticipate third-party risks before they materialize with increasing accuracy. Advanced machine learning algorithms will analyze historical data, industry trends, and external factors to predict potential risk events. Organizations will leverage these predictive insights to proactively mitigate risks and strengthen their supply chains, so they can more swiftly adapt to market changes or disruptions.

3. Location-Specific Risk Monitoring Gains Momentum

Geopolitical instability, natural disasters, and economic shifts across various regions can severely impact vendors, and by extension, the companies they service. As businesses increasingly operate across global networks, location-specific risk monitoring will become indispensable. This localized approach allows organizations to assess risks that vary by geography, from natural disaster probabilities to political conflicts and upheavals, enabling more targeted and effective risk management strategies.

4. Global Expansion of Regulatory Frameworks

As regulatory bodies worldwide introduce new guidelines, the TPRM landscape will become increasingly complex. In the European Union, for instance, the Digital Operational Resilience Act (DORA) mandates stringent compliance standards for financial institutions and their vendors. We anticipate similar regulations to emerge in other regions by 2025, pressuring companies to adopt comprehensive, globalized compliance practices. TPRM teams will need to navigate this complexity by investing in adaptable, agile monitoring solutions that can align with a range of regulatory frameworks.

5. Increased Focus on Operational Resilience

As operational resilience becomes a key priority for regulators and boards, third-party resilience will serve as a critical component of overall business health. By 2025, TPRM strategies will align even more closely with operational resilience frameworks, requiring companies to manage risk across financial, operational, and reputational domains. This shift will drive greater collaboration between risk management, procurement, and operations teams, creating a holistic approach to resilience.

6. Nth-Party Risk Management Becomes Non-Negotiable

In 2025, merely monitoring direct suppliers will no longer be enough. Businesses will need to look deeper into their supply chains, understanding risks posed by fourth, fifth, and Nth-party relationships. As recent disruptions have shown, an organization’s resilience is only as strong as its most remote suppliers. Supply Wisdom expects businesses to prioritize Nth-party risk monitoring solutions, thereby extending their visibility across their ecosystem and ensuring true supply chain resilience.

7. Real-Time Alerts Become Essential

In a world of constant disruptions, real-time risk alerts will evolve from a “nice-to-have” feature to a non-negotiable one. Continuous monitoring platforms will provide organizations with real-time alerts on events impacting their suppliers, such as cyber incidents, financial downturns, or natural disasters. Companies that lack these real-time capabilities in 2025 will struggle to respond to crises effectively, underscoring the need for agile monitoring solutions that keep pace with global events.

8. Integration of ESG Criteria as a Core Component of TPRM

With environmental, social, and governance (ESG) considerations gaining traction, ESG risk will become a foundational element in third-party risk assessments. As companies and regulators continue to revise ESG guidelines, ongoing awareness of up-to-date changes is essential to all monitoring programs. In 2025, companies will be expected to track their vendors’ ESG practices actively, ensuring alignment with their own sustainability goals. Organizations will face growing pressure to meet ESG standards across their entire supply chain, and those who fail to incorporate ESG factors may face reputational and regulatory risks.

9. Shifting from Reactive to Proactive Risk Management

By 2025, the shift from reactive to proactive risk management will be in full swing. Companies will leverage continuous monitoring, predictive analytics, and real-time alerts to identify and mitigate risks before they escalate. This proactive approach minimizes disruptions, protects brand reputation, and enables companies to respond to risks as they emerge, strengthening resilience at every point in the supply chain.

10. Non-Cyber Risk Monitoring Gains Major Traction Among CISOs

The evolution of cyber threats means data privacy and cybersecurity will remain paramount in third-party risk management (TPRM). And while cybersecurity risk monitoring platforms will gain prominence in 2025, a new focus will emerge: non-cyber risk monitoring. Businesses will demand more stringent data protection measures from vendors, including best practices adherence and timely incident disclosure. An increased focus on non-cyber risk monitoring will allow CISOs to proactively assess how operational, geopolitical, environmental, and other factors impact overall security postures, enabling a more comprehensive and resilient defense strategy.

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