Why Third-Party Risk Management is Critical in Saudi’s Digital Economy

Saudi Arabia is undergoing a digital revolution — powered by Vision 2030, cloud migration, fintech, and public-private partnerships. As organizations rapidly scale, many rely on third-party vendors for cloud hosting, payment gateways, software development, logistics, and more.

But with greater reliance comes greater risk.

In 2025, third-party risk management (TPRM) is no longer optional. Regulators, including SAMA, NCA, and CITC, demand it. Customers expect it. And businesses need it to prevent data breaches, financial losses, and reputational fallout.

2. What is Third-Party Risk Management (TPRM)?

TPRM is the process of identifying, assessing, monitoring, and mitigating risks introduced by vendors, contractors, partners, and service providers who have access to your data, systems, or processes.

Risks can include:

• Cybersecurity vulnerabilities
  
  
• Compliance failures
  
  
• Operational breakdowns
  
  
• Data privacy violations
  
  
• Reputational damage
  
  

3. Why It Matters in Saudi Arabia (2025 Context)

With the explosion of cloud-first and fintech-led business models, many Saudi organizations rely on:

• Third-party SaaS tools
  
  
• Payment processors
  
  
• BPOs and call centers
  
  
• IT consultants and system integrators
  
  
• Cloud infrastructure providers
  
  

But if these partners get breached, misuse data, or fail to deliver, your organization still bears the consequences.

Example: In 2023, a Saudi e-commerce startup suffered a major data breach when a third-party marketing tool was compromised — exposing over 100,000 user records.

4. Regulatory Expectations in KSA

✅ SAMA Cybersecurity Framework

Mandates that regulated entities (banks, fintechs) must:

• Assess third-party security posture
  
  
• Define roles/responsibilities in contracts
  
  
• Monitor and audit vendors periodically
  
  

✅ NCA ECC

Applies to public entities and critical infrastructure. Requires:

• Supplier risk assessments
  
  
• SLA-based controls
  
  
• Incident handling procedures with partners
  
  

✅ PDPL (UAE) and Global Equivalents

If your third-party handles personal data, you’re legally responsible for:

• Ensuring data processors follow PDPL or GDPR
  
  
• Establishing Data Protection Agreements (DPAs)
  
  
• Managing international data transfer risks
  
  

5. Types of Third-Party Risks

6. TPRM Framework: How to Build It

✅ Step 1: Create an Inventory of Third Parties

Maintain a list of all vendors, including:

• What data/systems they access
  
  
• Contract value and renewal date
  
  
• Their geographic location and compliance obligations
  
  

Use TPRM software or even spreadsheets to start.

✅ Step 2: Conduct Risk-Based Assessments

Categorize vendors by risk level:

• High (e.g., payment gateway, cloud provider)
  
  
• Medium (e.g., HR software, payroll service)
  
  
• Low (e.g., office supply vendor)
  
  

High-risk vendors need detailed security due diligence.

✅ Step 3: Standardize Vendor Evaluation

Use a vendor assessment checklist covering:

• ISO 27001 / SOC 2 certification
  
  
• PDPL/GDPR readiness
  
  
• Penetration testing and patching frequency
  
  
• Business continuity and incident response plans
  
  

Request supporting documents — don’t rely on promises.

✅ Step 4: Define Contractual Obligations

Include clauses on:

• Data ownership and breach notification
  
  
• Subcontractor disclosure
  
  
• SLA for uptime and response
  
  
• Audit rights
  
  
• Termination for non-compliance
  
  

Work with your legal team to align with local laws.

✅ Step 5: Monitor and Reassess Vendors

• Use dashboards or tools to track risks and performance
  
  
• Reassess high-risk vendors annually
  
  
• Review contracts regularly
  
  
• Conduct site visits or third-party audits if necessary
  
  

✅ Step 6: Establish Exit & Contingency Plans

• Plan for vendor failure or contract termination
  
  
• Ensure data portability and secure deletion
  
  
• Have a backup provider for key services
  
  

7. Common Mistakes Saudi Businesses Make

❌ Treating all vendors the same
❌ Not reviewing contracts for data protection obligations
❌ No formal risk assessment process
❌ Relying on verbal assurances or unchecked claims
❌ No exit plan or backup strategy

8. How Centre Systems Group Helps with TPRM

We help Saudi enterprises and startups build strong third-party ecosystems through:

✅ TPRM framework design and tool setup
✅ Vendor risk assessments and scoring
✅ Security questionnaire design and evaluation
✅ Contract drafting and legal coordination
✅ TPRM policy development (aligned with SAMA & NCA)
✅ Annual reassessment support and audits

Whether you work with 5 vendors or 50, we help you scale securely and compliantly.

In Saudi Arabia’s fast-moving, interconnected economy, your weakest vendor could become your biggest vulnerability. Third-party risk isn’t just an IT concern — it’s a board-level priority.

At Centre Systems Group, we help you take control with a clear, cost-effective TPRM strategy tailored to Saudi market needs.

📞 Let’s audit your vendor risks — book a TPRM consultation now.