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How AI Fits Into Your Vendor Risk Management Process

If you’ve taken a look across the SaaS landscape recently, you know that AI is having a zeitgeist moment right now. At least, the letters “AI” are everywhere you look…even if it’s not exactly clear what those letters mean or what they refer to, specifically. 

Hey, we make no secret of the fact that AI is a huge part of what we do at Whistic to support the third-party risk management (TPRM) process. But that’s why it’s so important that we don’t just slap a label on an old technology and call it AI. We view artificial intelligence as a tool to:

  • Maximize talent and resources to assess every vendor you want, any way you need
  • Shift finite resources away from manual administrative tasks and toward risk mitigation
  • Support better, faster business results with data-centric decision making

How does AI help deliver these TPRM outcomes? 

The short answer is AI works in TPRM by increasing your speed to insight.

Before you roll your eyes at my egregious use of a marketing word like “insight,” let me explain! 

Insight comes from having lots of raw data that you can synthesize to create a new piece of information. That new piece of information allows you to change the direction or velocity of your business—in the case of TPRM, this means choosing the right vendor to help you do MORE business with GREATER security.  

AI delivers insight to the TPRM process by helping you collect and analyze data from myriad sources without the manual step of questionnaire-based data collection (and without begging your vendors for it). This changes the direction of your business in several ways:

  • More resources for security: The time your TPRM team once spent on manual data collection and analysis can now be reallocated to business-critical tasks. You still have the insight you need, but you also effectively have extra headcount.
  • Less risk: The vendors you couldn’t assess because you didn’t have the time or resources? That thorough questionnaire you couldn’t get the vendor to respond to? Those are the kinds of risks you simply don’t have to take anymore.
  • Smarter vendor decisions: Look, when a business unit needs a solution, they need it fast. AI accelerates the procurement process by removing the choke point of a single questionnaire from your security assessment. But it also helps you generate better reporting, and that gives you a richer picture of your third parties, so you can make the best choice to meet your business requirements.

Mapping AI to your TPRM program

There’s no magic AI button for TPRM. AI must be integrated into the entirety of your TPRM process so that it can:

  • Understand your specific risk factors and business context
  • Apply your unique compliance and control requirements to meaningful vendor security data
  • Respond to your oversight to generate better and better results over time
  • Yield usable, actionable data that can be easily shared with stakeholders and executive leadership

If you’ll indulge another pesky IT buzzword, “integrate” doesn’t mean some kind of arduous technical onboarding. AI can—and should—work with your existing processes and commonly used systems. So as long as you have a sound foundation for your TPRM program, AI can work the way you already work. Here’s what that looks like in practice. 

Step 1: Vendor profiles and inventory

Vendor profiles give you all the information you need to perform the right security on every third-party, and a vendor inventory catalogs each of your vendor profiles. A vendor profile should include:

  • Any security documentation you’ve collected from the vendor; this could include reports and audits like a SOC 2, any trust centers the vendor has shared, or results from previous assessments
  • Information on the types and volumes of data the vendor can access
  • Contracts, terms of service, and overall spend

Where AI fits

Vendor profiles and catalogs should live within a single, centralized system of record. This functions as the home base for the various types of security data you’ll need to assess your vendors. With the right system, AI can query the information in your catalog and draw responses to security questions from the documentation housed there. AI-powered platforms like Whistic help you customize your vendor repository to drive automated responses and maintain high levels of control. 

Step 2: Risk ranking

You need a clear, consistent system in place to understand the level or risk inherent in a given vendor. There are a number of factors that go in to qualifying the risk level of a vendor, including:

  • Types of data the vendor will have access to
  • Data volumes exchanged between you and the vendor
  • Systems and networks the vendor can access
  • Specific regulatory/compliance requirements
  • Criticality of the vendor to your business

These elements can be used to generate a ranking criteria that can be applied equally to all of your vendors. We recommend keeping it simple: create specific thresholds that denote High, Medium, or Low risk for every vendor. This information can then be added to vendor profiles, allowing you to organize your vendors into tiers of risk.

Risk ranking can help you select the right type of assessment or the right data sources for the right level of risk. You may not need your 200-question assessment for a low risk vendor if you already have their public trust center or a RiskRecon score.  

Where AI fits

These weighted rankings will help you to train the AI to understand your unique risk tolerances and which data sources are necessary for the proper level of assessment. To use Whistic as an example, our AI engine uses Large Language Models (LLMs) trained on your risk criteria to identify the right security documentation to source for your assessment queries. 

Generative AI is then used to produce plain-text responses. AI can also cite documentation sources for its responses and provide a “confidence score” so you can do a quick audit and maintain a high level of control.

Step 3: Vendor security assessments

Since this is the whole engine of TPRM, we won’t go into much detail about what an assessment actually is. It’s worth noting, however, that time and resource savings are possible (with or without AI) by carefully calibrating the level of vendor risk to the right assessment. 

According to our 2024 TPRM Impact survey, 79% of organizations use a standardized questionnaire to assess their vendors. There’s lots of good reasons to leverage a customized questionnaire: it synthesizes all your security needs in a single assessment tool; it helps to organize data consistently for resource-strapped TPRM teams; and (when it’s complete) it’s an excellent source for making smart, risk-based decisions about a vendor. 

The challenge of a questionnaire is that it is manually maintained and HIGHLY manual and time-consuming for a vendor to fill out. That means you often don’t get a full response to your questionnaire the first time you ask for one (and you may never get everything you need).

Vendors are much more likely to share a trust center or an audit report like a SOC 2 or ISO 27001, but adherence to a customized questionnaire means you end up doing the manual work of poring through hundreds of pages of documents to find answers to specific questions. That’s what we mean by the “questionnaire choke point”—you either wait for the vendor or do all the work yourself. 

Where AI fits

You need a way to more quickly and effectively access the right information from a number of different data sources automatically. Forgive me for using the Whistic example again, but let me illustrate how AI works in our platform to automate assessments in just that way. 

By building careful vendor profiles and incorporating consistent risk ranking methodology, you have a living repository for vendor documentation. This repository can house a vendor trust center, continuous monitoring scores, vendor security documentation (ya know, the stuff they shared that WASN’T an answer to your questionnaire), and yes, even past questionnaire responses in the case of a reassessment. 

Our AI capability, Assessment Copilot, then takes your security questions and sources this library of information automatically. What this effectively means is that you can use any type of assessment tool you choose: if you love your questionnaire, use it! If you prefer a compliance-related standard framework, use that, too. Whistic AI simply uses all data sources available to answer your questions, so it doesn’t matter what form the questions are in. You have the data you need to make fast decisions and stay compliant. 

Step 4: Mitigate risk

Here’s what’s supposed to happen after you assess a vendor: you evaluate the risks you uncover during assessment, develop a management plan for those risks that includes oversight and follow-up, properly allocate resources based on that plan, and collaborate with business stakeholders to continuously monitor your environment based on their needs. 

What often does happen? You may never know…because you're sending manual questionnaires, digging through old shared drives for documents, or reading a SOC 2 report to find the SINGLE piece of information you need from it. Actually managing risk becomes an afterthought all too often. 

Where AI fits

I’m being slightly tongue-in-cheek for this section of the article. Whether you really have time or resources, you’re going to deal with risk one way or another. AI can just help ensure that you’re dealing with it proactively yourself…rather than dealing with it as a costly breach. 

By automating the response process, you create more time resources for your team to dedicate to mitigation and remediation. Because AI collects and synthesizes so many security data sources, you gain new visibility into risks, helping you to more carefully calibrate your procedures and policies. You can be more dynamic and responsive to change in the threat landscape and allocate resources more effectively because you have a plan—instead of just a fire extinguisher. 

AI-powered workflows can also automate the reassessment process. While this also used to be a time-consuming chore, AI makes it possible to reassess based only on exceptions or changes—saving you tons of time and helping better manage risks. 

Whistic AI integrates with every stage of the TPRM process

Excellent processes and talent help your business effectively evaluate risk—if you have the time and resources to do the job. Whistic’s AI-driven platform accelerates the speed to insight for your business by:

  • Centralizing multiple data sources of vendor security info in vendor profiles and inventories
  • Automating vendor intake, risk ranking, and assessment management
  • Leveraging Assessment Copilot—with automated SOC 2 summaries, context-rich Smart Response, and vendor insights—to generate responses to any kind of questionnaire or standard you choose
  • Giving you the time and foresight you need to properly manage risk and keep your business secure

You’ve done the hard work of building a world-class TPRM program. Now it’s time to make sure that TPRM program works hard for you. Whistic’s Assessment Copilot can help, and we’d love to show you how it works. Schedule a quick 30-minute consultation with our team of experts today.

Vendor Assessments Third-Party Risk Management