Third-Party Risk Management Under the DPDP Act: Key Requirements for Businesses
Businesses rely on external service providers for cloud hosting, payment processing, customer relationship management, marketing, analytics, employee management, and artificial intelligence services. These vendors may process personal data on behalf of an organization. As a result, third-party security weaknesses can create privacy, compliance, and business continuity risks. Third-party risk management under the DPDP Act should focus on identifying vendors, understanding their processing activities, evaluating security safeguards, establishing contractual responsibilities, and monitoring risks throughout the vendor lifecycle. What Is Third-Party Risk Management? Third-party risk management is the process of identifying, assessing, monitoring, and reducing the risks associated with external organizations that provide services or process business information. When a vendor handles personal data, the organization should understand what information is shared, why it is processed, how...