Closing the Gaps: 8 Third-Party Risk Challenges Impacting Financial Institutions in 2025

3 minute read

May 2025

by Kaitlyn Frank

Third-party relationships are a double-edged sword: opportunity and business functionality on one side, but an abundance of risk on the other. In the financial sector where the average cost of a data breach has reached $6.08 million — and reputational fallout is even harder to recover from — third-party risk management (TPRM) has never been more critical.

The question is: can TPRM teams in the financial sector keep up with today’s evolving risk landscape?

Why Traditional TPRM Strategy Falls Short

Legacy TPRM programs weren’t built for today’s breakneck speed, digital sprawl, and mounting regulatory pressures. Financial institutions now work with hundreds — or even thousands — of third parties, but many risk teams are still managing them manually, and with outdated tools.

This operational misalignment creates a critical vulnerability gap: exposure to third-party risk grows faster than your ability to assess, monitor, and respond to that risk.

To close that gap, it’s critical to address the top eight TPRM challenges financial institutions are facing today — and how to solve them.

The Top 8 TPRM Challenges in Financial Services

  1. TPRM teams causing bottlenecksLong assessment cycles and fragmented workflows slow procurement and innovation, frustrating internal stakeholders and delaying critical business engagements, ultimately impacting customer relationships.
    Pro tip: Turn third-party risk management into a business enabler. Automate third-party evidence collection to eliminate assessment delays and fast-track approvals without sacrificing oversight.
  2. Long onboarding cyclesTraditional onboarding timelines can stretch for weeks or months depending on third-party responses and number of follow-ups needed, discouraging third parties and slowing down internal strategic initiatives.
    Pro tip: Accelerate onboarding without sacrificing risk control. Use intelligent TPRM platforms that automate assessments, use generative AI to speed up document review, and dynamically tier vendors by criticality.
  3. Hard-to-assess third partiesLarge vendors (think Google, Amazon, ADP) can be difficult to get a hold of, while generally unresponsive third parties can grind your risk assessment process to a halt.
    Pro tip: Speed up assessment cycles with a third-party risk exchange. Tap into a shared library of pre-completed, attested assessments, like the Global Risk Exchange from ProcessUnity, for faster onboarding and greater visibility into previously inaccessible third parties.
  4. Inconsistent inherent risk assessmentsWithout a consistent method for assessing a third party’s inherent risk level, teams waste time and resources assessing low-risk third parties — while potentially missing red flags among high-risk ones.
    Pro tip: Prioritize high-impact third parties with automated risk scoring. Standardize and implement automated inherent risk assessments to focus your resources where they matter most.
  5. Due diligence backlogsMany TPRM teams are overwhelmed by high volumes of assessments, document reviews, and evidence requests, leading to due diligence delays and regulatory blind spots.
    Pro tip: Cut through due diligence overload. Smart workflows and assessment tools give you a real-time prioritized view of third-party risks, so nothing falls through the cracks.
  6. Delayed response to emerging threats and vulnerabilitiesA third party that’s secure today could still be a liability tomorrow. Without continuous monitoring, threats can escalate undetected.
    Pro tip: Move from reactive to proactive risk management. Layer continuous monitoring, real-time threat intelligence, and automated risk alerts into your TPRM program to identify and respond to vulnerabilities before they escalate.
  7. Manual policy and documentation reviewsTraditional policy and evidence reviews are slow, error-prone, and drain critical resources — delaying onboarding and compliance reporting, and straining third-party relationships.
    Pro tip: Streamline evidence reviews with automation. AI-powered intake and verification ensures every vendor meets your internal and regulatory standards faster and more reliably.
  8. Complex global third-party risk regulationsGlobal third-party risk mandates like DORA and CSDDD continue to evolve — creating a moving target that many institutions struggle to adapt to.
    Pro tip: Always be audit-ready. Implement an agile, centralized compliance framework with real-time evidence collection and automated reporting to stay ahead of evolving mandates.

The Path Forward for TPRM in Financial Services

Manual, fragmented approaches can’t keep pace with today’s third-party volume, velocity, and regulatory demands. Leading financial institutions are pivoting to proactive, tech-driven TPRM strategies — and ProcessUnity is at the forefront, helping you close risk gaps before they widen.

ProcessUnity empowers TPRM teams to overcome each of these eight challenges with solutions built for the financial services environment of today. With the right combination of automated workflows, standardized risk assessments, and real-time risk intelligence, you can streamline your entire third-party lifecycle – while staying fully aligned to evolving global regulatory standards.

Don’t leave your institution exposed.
Download the full guide to unlock expert strategies for building a scalable, audit-ready third-party risk program.

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About Us

ProcessUnity is a leading provider of cloud-based applications for risk and compliance management. The company’s software as a service (SaaS) platform gives organizations the control to assess, measure, and mitigate risk and to ensure the optimal performance of key business processes. ProcessUnity’s flagship solution, ProcessUnity Vendor Risk Management, protects companies and their brands by reducing risks from third-party vendors and suppliers. ProcessUnity helps customers effectively and efficiently assess and monitor both new and existing vendors – from initial due diligence and onboarding through termination. Headquartered outside of Boston, Massachusetts, ProcessUnity is used by the world’s leading financial service firms and commercial enterprises. For more information, visit www.processunity.com.