AI Revolutionizes Third Party Risk Management Strategies

Businesses are increasingly turning to AI to manage third-party risks in a volatile environment, according to the 2025 EY Third-Party Risk Management (TPRM) survey. The report highlights three critical actions to accelerate TPRM transformation and maximize the benefits of AI adoption.

1. Focus on the Enterprise

TPRM is often siloed across different business units, each tracking distinct metrics. Procurement monitors vendor performance, cybersecurity tracks breach costs, and supply chain focuses on supplier resilience. However, AI and centralization require an enterprise-wide view of obligations—such as regulatory requirements and investor expectations—to optimize decision-making. The concept of a "risk steward" is emphasized—a role dedicated to aligning risk management across organizational silos and fostering a proactive approach.

2. Invest in AI Readiness

While AI adoption in TPRM remains low, organizations aim to scale up in the coming years. Bridging this gap requires:

• Assessing existing TPRM processes and data management.
• Improving data quality and governance.
• Upskilling the workforce to handle AI integration.
• Monitoring emerging trends in AI and TPRM best practices.

3. Question Assumptions and Accelerate Tipping Points

Kawther Haciane, EY MENA Digital Risk Leader, compares AI adoption to the shift from cloud skepticism to "cloud-first" policies. Similarly, the rise of ChatGPT and the pandemic-driven remote work surge forced rapid TPRM tech adoption. As third-party relationships grow in complexity, manual risk assessments become costly, making AI adoption financially compelling. Breakthroughs in agentic AI, multimodal AI, and reasoning AI could further accelerate this shift.

The report concludes that anticipating tipping points—rather than reacting to them—can position organizations for success. By aligning incentives, investing in AI readiness, and adopting an enterprise-wide perspective, businesses can future-proof their TPRM strategies.