Seeing the Blind Spots: Third-Party Risk in Credit Unions

Lately, I’ve been spending a lot of time talking with credit unions about risk. While the risk landscape is broad and complex, one theme consistently rises to the surface: third-party risk is creating blind spots that make leadership uneasy.  

 It’s not from a lack of effort—everyone is taking steps to mitigate risk. The real question is: are they doing enough? 

 Here are a few observations—and some potential pitfalls worth watching:  

1. Don’t Stop at IT Risk 
   When people think about vendor risk, their first instinct is usually IT. But consider the recent Allianz Life Insurance data breach. Attackers didn’t exploit a software flaw. Instead, they used social engineering, posing as IT helpdesk staff to trick employees into granting them access to their CRM system. The result? A data breach that impacted more than 1.4 million people.  
   
   The takeaway: risk doesn’t just live in your technology. It lives in your people, your processes, and your relationships. A strong TPRM strategy needs to account for all of it.  
   
   
2. Risk is Never Static
   Vendor questionnaires are a staple of most vendor management programs. They’re useful – but they’re also just a snapshot in time. Risk, on the other hand, is fluid. It shifts as vendors adopt new tools, adjust processes, or face emerging threats.
   
   That’s why leading programs go beyond annual questionnaires. They reassess high-risk vendors more frequently and increasingly use continuous monitoring to spot issues before they become exposures. 
    
3. Be Wary of “Shiny Object” Syndrome
   As someone who sold technology for years, I love innovation and believe in investing in the right tools. That said, I’ve also seen organizations invest heavily in platforms only to feel let down when the results didn’t match the hype. 

• What business outcomes are you trying to achieve? 
• How will you measure success?  
• What impact will this investment have on risk mitigation? 

When your strategy is tied to specific, measurable outcomes, you’re far less likely to be distracted by the latest trend and far more likely to choose tools that actually move the needle.  

The Common Thread: Prioritization 

Across all of these pitfalls, the underlying theme is prioritization. The strongest third-party risk management programs don’t try to do everything at once. Instead, they zero in on what makes the biggest difference in reducing risk. They strike a balance - between people, process, technology, and data - and weave those elements into a program that addresses risk holistically and continuously.  

At the end of the day, the goal isn’t to eliminate risk (that’s impossible). It’s to shine light on the blind spots, reduce the biggest exposures, and give leadership confidence that their risk strategy can keep pace with reality.  

If you need help identifying the blind spots in your TPRM strategy, we have the resources. Let’s chat!