Introduction
In an increasingly digitized and globally interconnected business environment, third-party risk management (TPRM) has emerged as a critical pillar of enterprise resilience. The COVID-19 pandemic accelerated a seismic shift toward remote work, making distributed workforces a permanent fixture rather than a temporary adjustment. As organizations continue to embrace hybrid and remote-first operating models in 2025, the structure of third-party relationships — and the risks they introduce — has evolved dramatically.
Traditional models of TPRM, often reliant on in-person audits, fixed-location data centers, and centralized IT governance, are no longer sufficient. Vendors and partners now operate across geographies, devices, and networks — many of which fall outside the direct control of the contracting organization. These changes have introduced new risks, exposed old vulnerabilities, and made the task of vendor oversight exponentially more complex.
This article explores how remote work is reshaping third-party risk landscapes, what organizations can do to future-proof their TPRM strategies, and how to adopt best practices that account for this decentralized reality. We’ll analyze key risk domains, provide a strategic framework, examine relevant regulatory expectations, and recommend tools that support remote oversight. By adapting TPRM practices to suit the remote work era, organizations can ensure continuity, compliance, and trust in their vendor ecosystems — even when teams are dispersed across time zones and continents. For foundational principles, see our Vendor Risk Management Guide.
The Evolution of Third-Party Risk in a Remote-First World
Before the global pivot to remote work, third-party risk management frameworks were largely designed around physical controls, periodic assessments, and centralized IT environments. Organizations relied on fixed infrastructure, in-person vendor audits, and on-site data center security to mitigate risks introduced by suppliers, consultants, managed service providers, and other external entities. This model worked reasonably well when most corporate activities were confined to controlled premises.
However, the advent of large-scale remote work disrupted this balance. As employees, vendors, and contractors began accessing systems from a multitude of locations — often personal devices and unsecured networks — the perimeter that once defined organizational control effectively dissolved. This shift exposed several cracks in legacy TPRM practices:
- Periodic Assessments Became Obsolete: Annual or biannual vendor reviews no longer provided real-time visibility into vendor behavior or control effectiveness.
- Physical Controls Were Eroded: Security protocols that depended on physical access controls, like biometric scanners or restricted server rooms, became irrelevant.
- Shadow IT and Unauthorized Apps Proliferated: Remote workers began leveraging unsanctioned tools to stay productive, increasing exposure to unmanaged vendor risks.
In response, leading organizations began modernizing their TPRM programs with a focus on adaptability, automation, and continuous monitoring. Cloud-based solutions replaced static assessments, while virtual risk workshops and remote compliance reviews took the place of in-person site visits. Risk management professionals also started collaborating more closely with IT and security teams to ensure consistent governance across both internal and vendor environments.
Critically, the shift also demanded cultural change. Vendor risk was no longer just a compliance checkbox; it became an operational imperative tied directly to organizational resilience and brand trust. This evolution was particularly visible in highly regulated sectors like finance and healthcare, where remote vendor access to sensitive data introduced not only security risks but also regulatory scrutiny. In sectors subject to GDPR, HIPAA, or APRA CPS 230, failure to adjust TPRM practices to the remote landscape could lead to material penalties or reputational damage.
As 2025 unfolds, it’s clear that TPRM must continue evolving in tandem with the remote work paradigm. Organizations that cling to legacy models risk falling behind — or worse, falling victim to increasingly sophisticated third-party attacks.
Key Risk Domains Impacted by Remote Work
The transition to remote work has dramatically reshaped how organizations manage third-party relationships, with a direct impact on several high-risk domains. Understanding these areas is crucial for building a resilient and context-aware third-party risk management (TPRM) strategy. Each domain presents unique challenges that require both strategic adjustments and technical safeguards.
1. Data Access and Identity Risks
Remote work often necessitates granting third parties access to sensitive systems and data repositories from offsite locations. Without robust identity and access management (IAM) controls, organizations expose themselves to credential misuse, privilege escalation, and unauthorized lateral movement. A single compromised third-party account can lead to broad internal access — a vector often exploited in supply chain breaches such as the infamous SolarWinds attack.
Multi-factor authentication (MFA), just-in-time access, and role-based permissions are essential, but not always implemented consistently across third-party relationships. Vendor IAM must be integrated with internal systems to provide unified visibility and enforceable controls.
2. Endpoint Security
With third parties accessing resources from personal or unmanaged devices, endpoint security becomes a critical concern. Unlike corporate-issued hardware, external contractor devices often lack enterprise-grade antivirus, endpoint detection and response (EDR), or disk encryption solutions.
To mitigate these risks, many organizations adopt bring-your-own-device (BYOD) policies with conditional access or use virtual desktop infrastructure (VDI) to isolate vendor activity.
3. Cloud and SaaS Exposure
Remote ecosystems are heavily reliant on cloud and SaaS platforms, many of which are administered or configured by third parties. Misconfigured storage buckets, overly permissive APIs, or unmanaged SaaS accounts are now common causes of vendor-related breaches. Organizations must extend their cloud security posture management (CSPM) frameworks to include vendors and subcontractors.
To understand how shadow SaaS adds complexity to this issue, see our Shadow SaaS Risk Management article.
4. Compliance and Regulatory Risk
Regulators increasingly expect that third-party access controls, audit trails, and data handling practices are equivalent to internal standards. A vendor storing personal data in the wrong jurisdiction, for instance, could result in violations of frameworks like ISO 27001 or regional data protection laws.
5. Operational Resilience
Remote vendors may operate in geographies affected by power outages, political unrest, or limited broadband reliability. These factors introduce availability risks that can cascade into business disruptions. A weak vendor business continuity plan (BCP) or lack of tested incident response protocols can amplify downtime.
Framework for Remote-Compatible Third-Party Risk Management
In a remote-first ecosystem, traditional third-party risk management approaches require significant adaptation. Organizations must transition from static assessments and office-centric assumptions to dynamic, distributed, and technology-enabled frameworks.
1. Tiered Vendor Classification
Segment vendors based on criticality, access, geography, and data exposure. Assign risk tiers and tailor controls accordingly.
2. Virtual Onboarding and Due Diligence
Use digital portals, video walkthroughs, and policy attestations. Validate certifications and remote access protocols. Reference our Vendor Risk Assessment Guide for checklist criteria.
3. Contractual Safeguards
Embed clauses on remote access, SLA escalation, breach notifications, and geographic limits.
4. Continuous Monitoring
Leverage vendor security scores, behavior analytics, and vulnerability scanning. For strategic trends, review Gartner's Cybersecurity Trends.
5. Remote Incident Integration
Include vendors in IR playbooks, define clear escalation paths, and conduct joint response exercises.
Technology and Automation: Tools for Remote Risk Oversight
TPRM in distributed environments depends on automation and cloud-native tools:
- Platforms: OneTrust, ProcessUnity, RSA Archer
- Security Ratings: BitSight, SecurityScorecard
- Collaboration: Teams, ShareFile, secure portals
- Automation: Power Automate, ServiceNow workflows
These tools reduce manual workload, maintain visibility, and streamline incident response across geographies and time zones.
Case Study: Adapting TPRM During Global Disruption
A global pharmaceutical firm adapted its TPRM program during pandemic lockdowns by shifting to virtual audits, re-segmenting vendors, and using endpoint telemetry. The organization strengthened contracts, tested remote IR, and maintained uptime during geopolitical events — a model of adaptive risk governance.
Regulatory Expectations and Governance in 2025
Updated guidelines from EBA, FFIEC, MAS, and APRA (e.g., CPS 230) mandate remote vendor oversight. ISO 27036-3 outlines best practices for supplier security in distributed settings. Boards must ensure that vendor risk is documented, monitored, and governed with the same rigor as internal operations.
Best Practices for Building Resilient TPRM Programs
Key recommendations include: maintaining a real-time vendor inventory, embedding risk into procurement, automating assessments, enabling cross-functional ownership, and conducting remote resilience tests. Risk maturity is no longer about intent — it’s about evidence.
Conclusion: Rethinking the Future of TPRM in Distributed Work Environments
As hybrid and remote models continue, organizations must modernize third-party risk practices. Success depends on embracing automation, enforcing accountability, and aligning with global expectations. Your vendors are your extended enterprise — secure them accordingly.
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