Privacy and Artificial Intelligence - Checklist for 3.3: Vendors and Third Parties

Checklist for 3.3: Vendors and Third Parties

Objective

1. Ensure that all vendors and third-party partners handling AI systems or data for the organization comply with robust privacy, security, and regulatory requirements throughout the AI lifecycle (Verasafe, 2025; Panorays, 2025).
     Related to Part 2 Sub-Point: 2.8 Vendor and Third-Party Risk Management; 2.10 Regulatory Compliance and Adaptive Governance.

Key Actions

1. Conduct comprehensive due diligence on AI vendors before engagement.
     Example: Assess vendor privacy policies, security controls, compliance history, and reputation (Verasafe, 2025).
     Related to Part 2 Sub-Point: 2.8 Vendor and Third-Party Risk Management.

2. Establish clear contractual obligations regarding data use, security, and compliance.
     Example: Implement data processing addenda and liability clauses in all vendor contracts (Verasafe, 2025; Panorays, 2025).
     Related to Part 2 Sub-Point: 2.10 Regulatory Compliance and Adaptive Governance.

3. Regularly audit and monitor vendors’ AI systems and data handling practices.
     Example: Require transparency reports and conduct periodic compliance assessments (Panorays, 2025; Magai, 2025).
     Related to Part 2 Sub-Point: 2.7 Continuous Monitoring, Auditing, and Incident Response.

4. Limit data sharing to only what is necessary for the vendor’s specific purpose.
     Example: Apply data minimization principles and restrict access to sensitive data (Verasafe, 2025; TheJustinPeters, 2025).
     Related to Part 2 Sub-Point: 2.2 Data Minimization and Robust Access Controls.

5. Require vendors to implement privacy-enhancing technologies and robust security measures.
     Example: Use encryption, pseudonymization, and continuous monitoring for AI vendor solutions (Magai, 2025; PCPD, 2025a).
     Related to Part 2 Sub-Point: 2.6 Privacy-Enhancing Technologies (PETs); 2.7 Continuous Monitoring, Auditing, and Incident Response.

Metrics for Success

1. Achieve 100% completion of initial and annual vendor risk assessments (Panorays, 2025).
     Related to Part 2 Sub-Point: 2.8 Vendor and Third-Party Risk Management.

2. Reduce the number of vendor-related data incidents by at least 35% compared to the previous year (Magai, 2025).
     Related to Part 2 Sub-Point: 2.7 Continuous Monitoring, Auditing, and Incident Response.

3. Maintain up-to-date records of all vendor compliance certifications and audit results (Verasafe, 2025).
     Related to Part 2 Sub-Point: 2.10 Regulatory Compliance and Adaptive Governance.

Common Pitfalls to Avoid

1. Overlooking the risks from vendors’ subcontractors and supply chains (Panorays, 2025; Mitratech, 2025).
     Related to Part 2 Sub-Point: 2.8 Vendor and Third-Party Risk Management.

2. Failing to update vendor contracts and risk assessments in response to new regulations (Verasafe, 2025).
     Related to Part 2 Sub-Point: 2.10 Regulatory Compliance and Adaptive Governance.

3. Not providing adequate oversight or monitoring of vendor AI models for security, bias, or compliance issues (Magai, 2025; PCPD, 2025a).
     Related to Part 2 Sub-Point: 2.7 Continuous Monitoring, Auditing, and Incident Response.

References
Magai. (2025, February 21). Ultimate guide to AI vendor risk management. https://magai.co/ultimate-guide-to-ai-vendor-risk-management/
Mitratech. (2025, April 2). Key third-party risks to watch in 2025. https://mitratech.com/resource-hub/blog/third-party-risks-to-watch-in-2025/
Panorays. (2025, April 23). What is vendor risk management (VRM) in 2025? https://panorays.com/blog/vendor-risk-management-complete-guide/
PCPD. (2025a, April 15). Checklist on guidelines for the use of generative AI by employees. Privacy Commissioner’s Office. https://www.pcpd.org.hk/english/news_events/media_statements/press_20250331.html
TheJustinPeters. (2025, March 22). Ensuring data privacy and compliance in AI solutions by 2025. https://thejustinpeters.com/2025/03/22/ensuring-data-privacy-and-compliance-in-ai-solutions-by-2025/
Verasafe. (2025, April 7). AI vendors and data privacy: Essential insights for organizations. https://verasafe.com/blog/ai-vendors-and-data-privacy-essential-insights-for-organizations/