In this day and age, many companies are building ecosystems that offer opportunities to create agile strategies, flexible operating models and minimize costs for improved competitiveness. These partnerships however, may expose the company to a host of new risks, particularly related to third parties. Many global regulators have taken note of this, putting a special focus on agents, intermediaries and other third parties during bribery and corruption investigations. Therefore it is crucial for companies to really know with whom they are doing business.
Third-party risk management is not exempt from the changes of today’s technology-driven world and is turning to technology tools to automate processes and analyze the data generated by risk management activities. Some companies are still using archaic spreadsheets and manual processes to maintain and report their third-party inventory and risk management, encompassing research, administration, risk evaluation and contracting. However, we have begun to see a monumental technological shift in all areas of business – including third-party risk management. As the industry rides the accelerating digital wave, manual processes and spreadsheets for in-house third-party management are slowly giving way to automation and analytics.
The benefits of this digital shift includes real-time analytics, cost reduction, increase in productivity, readiness, reliability and performance growth. Companies are also realizing how quickly these benefits outweigh the cost of acquiring these technologies — and they are aggressively seizing this opportunity.
But it is not always easy to choose the right technology due to various reasons. Overall, companies are looking for a third-party risk management technology that is cost effective but scalable to meet the growing third-party matrix. The technology also needs to integrate seamlessly with other organizational systems (such as ERP and CRM), and have an intuitive and user-friendly design and interface. Whilst there are many technologies and software already available in the market, many companies are turning to third-party Assessments-as-a-Service model, some (like EY) are going one step further to develop a strategic solution to execute best practice assessments and deliver over a secure, shared-services platform.
Our latest Forensic Newsletter (Feb 2019), Can you transform your third parties’ risk into a competitive advantage? offers deeper insights on the technology shift that we are currently seeing with regard to third-party risk management. Click here to download the newsletter.