The promise of AI is clear. Generative AI in combination with Machine Learning can synthesize massive amounts of data, automate rote or manual processes, liberate top talent for business-critical activity, and help identify and seize opportunities to innovate.

All of these AI benefits also apply to third-party risk management (TPRM). It’s possible to automate your vendor assessments to make smarter purchasing and adoption decisions, assess more vendors in greater detail with the same resources, and see return on your investment faster.

We are certainly believers in an AI-first approach to TPRM, but we also understand the importance of weighing the benefits against the risk—that’s the entire purpose of assessing your vendors in the first place. This can be a challenge with AI, because it is still perceived as a bit of a “black box”—and not without some merit. This can make a risk-based approach to AI adoption tricky.

Understanding AI Value for TPRM

But it’s still possible to build a risk-based framework for understanding the value of AI in your TPRM processes. Let’s take a look at the known benefits and known risks associated with AI-powered vendor risk management.

Benefit 1: In-depth vendor risk assessments

In our annual survey of more than 500 cybersecurity and risk leaders, we found that 93% of organizations would choose to assess more of their vendors than they currently do; 96% also reported that they’d like to perform more in-depth assessments than they do.

So, why is this the case? The primary answer was resource constraints. The time and energy necessary to complete a traditional assessment of every vendor is simply too great when compared to the demand for new solutions, software, or services. But the upshot of all this is that companies are taking on more risk than they need to.

AI expands your organizational capacity by automating the vendor assessment process, allowing you to assess more vendors with the same headcount—so you take on less risk and actually deliver business value faster. AI allows you to:

Get proactive with vendor security analysis—Many vendors make security information available through public trust centers on their websites or through marketplaces like G2 and Whistic’s own Trust Catalog. AI makes it possible to use this information very early in the vendor selection process to get an early snapshot of possible risks.

This isn’t a substitute for a full vendor assessment, but it does make it possible to eliminate obvious risks during selection, reduces the amount of information left to collect from a vendor, and expedites the procurement process.
Utilize your preferred questionnaires and standards with self-service: Look, the challenges of TPRM are also felt on the vendor side; they receive hundreds of questionnaire requests and their limited resources make it impossible to respond to everyone with the necessary detail.

As a result, many vendors simply send over their documentation (like a SOC 2 report) rather than fill out your questionnaire—leaving you to parse through the documents line-by-line on the hunt for answers. But AI can quickly summarize this documentation and generate answers to your questionnaires, whether that’s a standard like HECVAT for higher education or a customized questionnaire of your own design. This makes it possible to generate the lion’s share of responses in a fraction of the time.
Increase response rates from vendors: But what about those questions that AI can’t answer automatically? AI isn’t perfect; there may be a subset of questions that require a response or clarification from the vendor.

AI-automated responses will reduce that number of questions from hundreds (in some cases) to just a handful. This is a significantly lighter lift on the vendor side, making it much easier to respond to your request. It also accelerates the sales’ cycle on the vendor side—that’s even more motivation to get back to you quickly. When combined with self-service capabilities, AI can improve your response rate to 100%.

Benefit 2: Risk detection and continuous monitoring

The vendor security assessment is just one part of the TPRM process. It’s essential, but it only happens periodically, leading to gaps that must be filled with risk monitoring and mitigation activity. AI can be a big help with these, as well.

AI can be proactive in analyzing patterns in vendor activity, like changes in data access or unusual network traffic. This kind of anomalous behavior could indicate a cyber threat or vulnerability. Early detection can help your team:

Defend against the threat before it becomes a breach
Minimize downtime from security incidents
Prevent data loss
Protect business-critical infrastructure

Your own security needs may also change. While this is a perfect time to reassess your vendors, AI can make it simpler to understand exactly which vendors need the highest touch given your new requirements. AI can automatically review existing vendor documentation to verify compliance, send alerts for high-risk vendors or overdue assessments, and create summaries of the overall risk levels inherent in your vendor catalog. By automating such tasks, you also reduce the risk of human error or a lapse in oversight.

Benefit 3: Redeploy Your Resources

Whistic research shows that it takes an average of 12 days to receive a completed questionnaire from a vendor. That’s 12 days of back and forth, emailing, wading through documents and spreadsheets—everything short of begging to get the info you need. With AI, that process can be reduced to as little as two minutes. What could your team accomplish with those time savings?

As we’ve mentioned, the core opportunity value of time savings through AI is the capacity to assess all the vendors you want in at as great a level of detail as you require with the resources you already have. That means not accepting risk just because you need a vendor solution.

But there are lots of other things TPRM teams can do to redeploy their time savings, as well, including:

Consulting with InfoSec on risk ranking criteria to refine overall risk management
Understand patterns in vendor vulnerabilities to adjust long-term security strategies
More closely monitor high-risk vendors between assessments to prevent incidents
Receive additional training to increase the overall capacity of the InfoSec team

Understanding the Risks of AI in TPRM

We’ve taken a look at the potential value of AI to your TPRM team, but no cost/benefit analysis would be complete without looking into the possible risks. Let’s take a look at the most common AI risks impacting its use in TPRM.

Challenge 1: Data Quality

The accuracy of AI’s risk detection capabilities hinges on the quality of the data it processes. One of the key concerns in utilizing AI is that it will provide incorrect or false information that can negate some of the benefits of automation. If you have to check every single answer, you may as well conduct the assessment yourself.

That’s why it’s so important that the AI in your TPRM solution or process is only applied to data you have and trust—with additional assurances that the AI won’t invent an answer to a question it doesn’t have the data to support.

If you are using an AI solution in your assessment process, be sure you select a tool that allows your InfoSec team to maintain control of the data the system has access to. Whistic, for example, allows users to create a dynamic Knowledge Base for pre-approved kinds of documentation. The AI in our platform queries only that approved documentation to source answers. We also give users the option to approve or reject each AI response. To increase confidence, we provide an assurance score for each answer, along with specific citations for the response so you can check for yourself.

Challenge 2: Transparency

Many organizations instinctively distrust the use of AI because it can be difficult to understand and explain how it derives its conclusions. The nature of this challenge is similar to the data-quality problem: how can you be certain that you are getting outputs you trust if you don’t understand the process at which they were derived?

We touched a bit on this in regard to data quality, but it’s critical to select an AI solution that can show its work. This means delivering not just an automated response to a security query, but also providing context for the answer, citations to the data from which the answer was drawn, and the ability to accept or reject the answer (ideally, your AI can also learn from these, too, to make future assessments more accurate).

Lastly, we suggest solutions that can provide risk summaries and reporting that are digestible for senior leadership, key stakeholders, and strategic decision-makers. This makes it easier to communicate with and get buy-in from across the organization.

Challenge 3: Security Risks Inherent to AI

Any new technology can become a target for cybercriminals. In this regard, AI is not unique from other types of cloud-based, connected technologies. But it does require a specific focus that may not currently be a core competency of your security team.

One of the best ways to safeguard against these threats when introducing AI-based technologies is to assure your vendors are transparent in the way they use AI. During the assessment and onboarding process, be sure your vendors can answer and document these questions:

What are you using AI for? This can include functionality, automation, or as part of the software development of the solution itself.
What controls do you have in place for your own use of AI?
How is your AI using my data?
What control do I have over AI usage with your solution?

Having answers to these questions can give you a framework for dealing with AI risk and help you align these risks with your overall risk tolerance as a business.

Best Practices for Implementing AI in TPRM

At the risk of repeating ourselves, let’s review a few things you can do to get your AI-first TPRM program off to a secure start:

Utilize data you trust: When it comes to performing a vendor assessment, there are lots of data types you might lean on for intel—public trust centers, documentation, old quetsionnaires, etc. Some of these are more robust and trustworthy than others, so select only those data types that you can trust.
Maintain high levels of human control: Your solution shouldn’t replace the oversight of a trained expert. Really, AI should just augment that person’s or team’s expertise to make them faster and more effective. Be wary of solutions that seek to replace the assessment process and the pros that make it effective.
Prioritize the security of AI systems: You probably work with lots of vendors that you categorize as “high risk.” It doesn’t mean you can’t get tons of value out of these vendors; it simply means that you need to dedicate the right resources to monitoring. AI systems should be viewed in the same way if your AI adoption will include access to sensitive data or business-critical systems.

Learn more about AI-First TPRM

As you probably guessed, we have a pretty strong point of view when it comes to the game-changing impact AI can have on your TPRM process. Whistic puts AI first so that you can procure all the solutions you need without skimping on security—all in a fraction of the time and resources you currently devote to the process.

But we’re also not naive about the risks that still linger in the AI space. Whistic AI takes these concerns seriously by:

Helping you achieve 100% response rates for your vendor questionnaires, actually reducing risk to make you safer
Giving you total control over AI—you decide when (or if) AI is used, what data it has access to, and which responses you use to complete an assessment
Leading with transparency through confidence scores and full citations for every response
Achieving a 91% accuracy rate for our AI responses, dramatically reducing the info you need from a vendor and cutting assessment times from days or weeks to minutes

If you’ve made it this far, it’s safe to say you’re interested in what AI can do to transform your TPRM program. We’d love to show you the Whistic Platform firsthand so you can see our AI in action and find out if it’s a fit for your business. Schedule some time with our team of experts, and we’ll show you the future of AI-first TPRM.