The Evolution of Third-Party Vendor Risk Management: Trends to Watch in 2024

As the global business ecosystem becomes increasingly interconnected, the complexity and importance of third-party vendor risk management (VRM) continue to grow. This evolution is driven by rapid technological advancements, changing regulatory landscapes, and shifting market conditions. The objective of this blog post is to explore key trends in VRM that businesses need to watch and prepare for in 2024, highlighting the criticality of adapting VRM practices to maintain competitive advantages, ensure compliance, and mitigate risks.

The Importance of Adapting to VRM Trends

Staying ahead in VRM practices is not just about mitigating risks—it’s also about seizing opportunities to enhance efficiency, resilience, and strategic partnerships. Emerging trends in VRM can offer businesses new ways to approach risk management, making it an integral part of their growth and innovation strategies.

Trend 1: Increasing Reliance on AI and Machine Learning

AI and machine learning technologies are set to play a pivotal role in automating risk assessments, monitoring, and mitigation processes. These technologies can provide predictive insights into vendor risks, enabling businesses to adopt more proactive risk management strategies. The potential for AI to streamline and enhance VRM processes is immense, offering a more efficient and accurate approach to identifying and managing third-party risks.

Trend 2: Enhanced Focus on Cybersecurity Threats

The cybersecurity threat landscape is escalating, impacting VRM significantly. There’s a growing need for advanced cybersecurity measures, including the integration of cybersecurity frameworks and standards into vendor assessments. Cybersecurity insurance is also becoming a critical consideration, underscoring the importance of continuous monitoring and robust cybersecurity defenses in managing vendor risks.

Trend 3: Regulatory Changes and Compliance Pressures

Anticipated regulatory changes and increasing compliance pressures, particularly in sectors like finance, healthcare, and technology, are affecting VRM practices. The global nature of regulations, including the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), necessitates a comprehensive approach to compliance in international vendor relationships. Staying ahead of regulatory changes is crucial for maintaining compliance and avoiding potential penalties.

Trend 4: The Rise of ESG Considerations

Environmental, social, and governance (ESG) factors are becoming increasingly important in vendor selection and management. Businesses are incorporating ESG criteria into their VRM processes to align with corporate values and meet stakeholder expectations. This trend reflects a broader shift towards sustainability and ethical business practices, influencing how companies assess and manage vendor risks.

Trend 5: Blockchain for Enhanced Transparency and Security

Blockchain technology has the potential to revolutionize VRM by offering secure, transparent transactions and real-time risk monitoring capabilities. Blockchain can improve trust and efficiency in vendor relationships, providing a clear, immutable record of transactions and interactions. Its application in VRM can lead to more secure and transparent supply chains and partnerships.

Trend 6: The Shift Towards Vendor Collaboration and Partnership

There’s a noticeable shift from traditional vendor relationships to strategic partnerships that focus on collaboration to manage risks jointly. This trend impacts VRM strategies by promoting shared responsibilities and joint risk mitigation efforts, fostering a more collaborative approach to managing third-party risks.

Preparing for the Future of VRM

Adapting to these trends requires businesses to invest in technology, update their risk management frameworks, and foster a culture of continuous improvement. Flexibility and resilience are key to navigating the evolving VRM landscape, allowing businesses to respond effectively to new challenges and opportunities.


The VRM landscape in 2024 will be shaped by technological advancements, regulatory changes, and a growing emphasis on cybersecurity, ESG considerations, and strategic partnerships. Businesses must stay informed and agile in their VRM strategies to effectively navigate these trends, ensuring they can mitigate risks while seizing new opportunities for growth and innovation.