Most organizations conduct annual vendor risk assessments. They have a structured process: send questionnaires, review responses, analyze security documentation, assign risk scores, document everything in your GRC platform. At the end, you have a clean assessment report showing that Vendor X passed their annual review with acceptable risk levels.
Three months later, that same vendor experiences a major data breach. Or gets acquired by a company with questionable security practices. Or suffers a critical outage that takes down your customer-facing services for hours. Or quietly degrades performance until your SLAs are violated daily.
None of this appeared in your annual assessment because none of it had happened yet. Your risk evaluation was accurate on the day you completed it. But risk doesn't wait for your annual review cycle.
This is the fundamental problem with point-in-time assessments. They measure vendor risk at a single moment, then assume that measurement remains valid for the next 364 days. In a world where vendor risk can change overnight, this approach doesn't just create gaps in visibility. It creates a dangerous illusion of control.
Point-in-time vendor assessments weren't always inadequate. They emerged in an era when technology changed slowly, vendor ecosystems were smaller, and the pace of business allowed for periodic reviews. An annual or biannual assessment made sense when vendors were relatively stable and major changes happened infrequently.
But three fundamental shifts have made this model obsolete.
Yet despite these changes, most TPRM programs still operate on an annual assessment cadence because that's what's always been done.
By the time you complete an annual assessment, review the documentation, assign risk scores, and get sign-off from stakeholders, weeks or months have passed. The vendor has shipped multiple updates. Their security posture has changed. Their business situation has evolved.
You're making decisions based on information that describes how the vendor was, not how they are.
Point-in-time assessments excel at identifying theoretical risks. "Does the vendor have adequate backup procedures?" Sure, but they're terrible at catching actual incidents.
The questionnaire shows the vendor has a documented incident response plan. What it doesn't show is that they failed to notify you of a security incident for two weeks, or that their actual response time during a real incident was dramatically longer than their documented procedures suggested.
When assessments happen annually, vendors know they have 364 days when nobody's watching closely. The incentive isn't to maintain consistent performance. It's to look good for the assessment.
This creates a dynamic where vendors are most responsive and transparent during the weeks surrounding your review, then revert to normal, less attentive behavior once the assessment is complete.
If you have 500 vendors and conduct meaningful annual assessments of each one, your risk team spends their entire year on assessments with no time for actual risk management, strategic work, or responding to real issues.
The typical response is to tier vendors and only assess "critical" ones annually, with others reviewed less frequently. But this just means you have even less visibility into the majority of your vendor ecosystem.
Point-in-time assessments measure vendor capability at a moment in time. "Is the vendor capable of meeting our requirements?" But what organizations actually need to know is "Is the vendor consistently meeting our requirements?"
A vendor can have excellent documented procedures, impressive security certifications, and strong financial health and still deliver poor service quality, miss SLA commitments, or experience frequent operational issues.
Continuous monitoring isn't just "more frequent assessments." It's a fundamentally different approach that treats vendor risk as a dynamic, ongoing condition rather than a periodic checkpoint.
Real continuous monitoring includes several key components.
The most common objection to continuous monitoring is practical. "We can barely complete annual assessments. How are we supposed to monitor vendors continuously?"
The answer is that continuous monitoring works precisely because it's continuous. It relies on automation and real-time data rather than labor-intensive manual reviews.
What should be automated:
What still requires human judgment:
The goal isn't to eliminate human judgment. It's to focus that judgment on actual risk events rather than consuming it with routine information gathering.
The future of TPRM isn't abandoning assessments entirely. It's using continuous monitoring to inform when and where deep-dive assessments are needed.
Instead of blindly conducting annual reviews of all critical vendors, organizations with mature continuous monitoring programs do several things differently.
This approach is more efficient, by focusing human effort where it matters, and more effective, by catching problems when they happen rather than months later.
Regulatory bodies are increasingly recognizing the inadequacy of point-in-time assessments. DORA explicitly requires financial institutions to implement continuous monitoring of critical vendors, not just periodic reviews. Similar language is appearing in regulatory guidance globally.
This isn't regulators being arbitrarily demanding. It's recognition that operational resilience requires real-time visibility. When a critical vendor fails, "we reviewed them last year and they were fine" isn't an adequate explanation to customers, stakeholders, or regulators.
The technology for continuous monitoring exists and is increasingly accessible. The real barrier is organizational. Shifting from a mindset that treats vendor risk management as a periodic compliance exercise to one that treats it as an ongoing operational discipline.
This requires several things:
Organizations that make this shift discover something interesting. Continuous monitoring is actually less burdensome than intensive periodic assessments because it distributes effort over time and focuses attention where it's genuinely needed.
Here's the uncomfortable truth: many TPRM teams have already lost confidence in manual annual assessments, yet most organizations still conduct them. They provide incomplete information, and vendors can change dramatically between reviews. Everyone knows that when something goes wrong with a vendor, the annual assessment isn't where you look for answers.
The point-in-time assessment model persists not because it's effective, but because it's familiar and because organizations haven't yet committed to an alternative.
But the math is clear. You can't manage hundreds of dynamic vendor relationships with a process designed for dozens of stable ones. You can't catch real-time operational issues with annual paperwork reviews. You can't build genuine operational resilience on top of information that's months out of date.
The only question is whether your organization will proactively adopt continuous monitoring or wait until a vendor incident forces the conversation.
Ready to move beyond the limitations of point-in-time assessments? Contact Clarative to learn how continuous vendor monitoring can give you real-time visibility into the vendor risks that matter most without overwhelming your team.
