The Difference Between Inherent and Residual Vendor Risk

Vendor risks are always present, and you can never completely eliminate them, but it’s possible to reduce the likelihood, occurrence, severity, and impact of those risks through solid risk management practices and controls. Inherent risk is the level of risk present in any vendor engagement before any controls are put in place, while residual risk is the risk that remains after mitigation efforts are made and controls have been verified. It’s true that you can’t have inherent risk without the residual risk; however, they each serve a distinct purpose. 

In this session we’ll discuss what inherent and residual risks are, how to determine them, and how they are applied in third-party risk management. 

Watch now to learn:

• The difference between inherent and residual vendor risk  
• Determining inherent risk 
• The role of due diligence 
• How to properly apply residual risk 
• Risk handling techniques  
• Key takeaways