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Collaboratively building effective third-party risk management processes

Veronica Pickens (vpickens@inovalon.com) is an Associate Vice President of Compliance and Delegation for Inovalon in Bowie, Maryland, USA.

Although the financial sector has been the leader in implementing third-party risk management processes, other sectors have understood its importance and followed suit. In the financial industry, the importance of third-party management was elevated in 2013 when the U.S. Office of the Comptroller of the Currency mandated that all regulated banks were required to manage the risk of their third parties.[1] The healthcare industry also has several regulations that led to the need for third-party management; the Health Insurance Portability and Accountability Act[2] sets the standard for protecting private patient data. Another example is the Health Information Technology for Economic and Clinical Health Act of 2009, which required increased privacy and security obligations and extended them to vendors who were classified as business associates of health insurance companies.[3]

However, for sectors without industry-specific regulations to drive a need for third-party management, effective practices had to be established. This article provides an introduction to the role of a third-party management program within an organization and an overview of best practices, emphasizing the importance of the program responsibilities being shared across departments.

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