Auto-Tiering

What is an Auto-Tiering?

Auto-Tiering refers to the use of automation to classify third-party vendors into risk tiers at the time of onboarding or during ongoing assessments. Instead of manually evaluating each vendor’s criticality, the system uses predefined rules, conditional logic, or risk scoring models to determine tier placement. These rules may include factors like the type of data handled, system access levels, geographic presence, regulatory exposure, or business function supported.

Auto-tiering supports consistency in vendor segmentation and enables risk teams to scale third-party risk management programs efficiently. Vendors placed in higher tiers typically undergo deeper due diligence, more frequent assessments, and closer monitoring. Automated tiering also improves response times, reduces human error, and ensures alignment with internal policies and regulatory expectations.

FAQs

What criteria are commonly used for auto-tiering vendors?

Common criteria include whether the vendor has access to sensitive data, supports critical business functions, operates in high-risk geographies, or is subject to specific regulatory requirements. These criteria are weighted and applied through a rules-based system.

How does auto-tiering improve third-party risk workflows?

Auto-tiering streamlines vendor classification by replacing manual analysis with consistent automation. It speeds up onboarding, ensures appropriate assessment depth for each vendor, and reduces subjective errors in risk classification.

Can auto-tiering be customized for different industries or risk models?

Yes. Auto-tiering systems can be configured to reflect industry-specific risks, organizational risk tolerance, and compliance obligations. Organizations may tailor the criteria and thresholds based on regulatory frameworks, contract types, or vendor roles.