Third-party risk and compliance glossary

Third-party risk vocabulary mixes regulatory, contractual and technical terms that are often wrongly used interchangeably. Each definition below stands on its own, cites the regulation when the term is legally defined, and links to the pages that go deeper.

Concentration risk

Concentration risk is the exposure created by an organisation's dependency on a small number of vendors, technologies or geographies, such that a single failure affects several essential activities at once.

Digital operational resilience

Digital operational resilience is, under the DORA regulation, a financial entity's ability to build, assure and review its operational integrity and reliability in the face of ICT disruptions, including those originating from its ICT third-party providers.

DPA (Data Processing Agreement)

A DPA (Data Processing Agreement) is the contract required by Article 28 of the GDPR between a controller and its processor. It sets the subject matter, duration, nature and purpose of the processing, the categories of data and data subjects, and the obligations on security, confidentiality, assistance and return or deletion of data.

EBIOS Risk Manager

EBIOS Risk Manager is the digital risk assessment and treatment method published by ANSSI, the French cybersecurity agency. It builds risk scenarios from risk sources and their targeted objectives, giving explicit weight to the ecosystem — partners and suppliers — as an attack path.

Essential entity (NIS2)

An essential entity is, under the NIS2 directive, an organisation operating in a sector of high criticality and above the size thresholds set by the directive. It is subject to proactive supervision, unlike an important entity, which is supervised after the fact.

Fourth-party risk

Fourth-party risk is the risk an organisation carries because of its vendors' own subcontractors — entities it has no direct contract with, yet on which the security or availability of the service it buys depends.

Records of processing activities (ROPA)

The records of processing activities (ROPA) are the document required by Article 30 of the GDPR listing, for each personal data processing activity, its purpose, the categories of data and data subjects, the recipients, transfers outside the EU, retention periods and security measures.

SBOM (Software Bill of Materials)

An SBOM (Software Bill of Materials) is the structured inventory of the components that make up a piece of software — libraries, transitive dependencies, versions and licences — allowing an organisation to determine whether a product is affected by a published vulnerability.

Security posture score

A security posture score is a synthetic indicator aggregating a vendor's assessment results — questionnaire answers, certifications, evidence provided, known incidents — to allow comparison and prioritisation across third parties.

Security questionnaire

A security questionnaire is a structured set of questions sent to a vendor to document its security, continuity and compliance practices, and to objectify the gap between those practices and the requirements of the organisation assessing it.

Sub-processor

A sub-processor is, under Article 28 of the GDPR, a provider engaged by a processor to carry out all or part of a processing activity on behalf of the controller. Engaging one requires the controller's authorisation and the flow-down of the same contractual obligations.

TPRM (Third Party Risk Management)

TPRM (Third Party Risk Management) is the discipline of identifying, assessing, treating and monitoring the risks an organisation carries because of its relationships with external suppliers, service providers and partners — chiefly cybersecurity, continuity, compliance and data protection risks.

Trust Center

A Trust Center is the space a vendor maintains to publish, permanently and up to date, the elements of its security posture: certifications, audit reports, data location, sub-processor list, policies and contractual commitments.

Vendor due diligence

Vendor due diligence is the assessment carried out before contracting, and periodically thereafter, to verify that a third party's security, compliance and continuity posture matches the criticality of the service it delivers and of the data it accesses.

Vendor SPOF

A vendor SPOF (single point of failure) is a third party whose unavailability is enough to halt an essential activity, because no alternative can be activated within the interruption tolerance of that activity.