As technology continues to increase the efficiency of most operational tasks, it should come as little surprise that technology can now improve the labor-intensive process of managing third party risk. The days of manual audits may become a thing of the past as companies look to technology for a more manageable solution.
Given that the U.S. Department of Justice reports more than 90 percent of its 2012 anti-corruption actions involved a company’s use of third parties, the ability to mitigate third party risks is only becoming increasingly important. Many organizations struggle to even identify all their various third parties, let alone complete the appropriate due diligence to alleviate the organizational risks they may pose.
A recent survey conducted by NAVEX Global found that only 34 percent of respondents conduct due diligence with all third parties prior to engagement, leaving them vulnerable to a variety of risks down the road (more on those survey results soon).
In an effort to streamline the process and costs around performing proper risk-based due diligence, NAVEX Global is now offering its clients a Third Party Risk Management solution that addresses the regulatory requirements and operational challenges involved with managing third-party business relationships.
As NAVEX Global Chief Products Officer Bob Conlin put it: “Automation is the key to adequately scaling third party due diligence. Our solution not only allows companies to assess and monitor risk associated with existing third parties, it also supports an automated process to ensure that all new third party relationships are reviewed and approved at the time of onboarding. Issues are flagged for further review and ongoing monitoring is put in place to track any adverse news involving the third party organization – reducing both costs and risks.”
Simply put, we can help you put a process in place to assess the risks faced at the time of third-party onboarding, continually monitor for news and developments about that third party and place the right amount of focus on those third parties who pose the greatest risk to your organization.
Given the pressures placed on organizations to know and understand the risks posed by all their various – often thousands – of third parties, automation is the only way to accomplish the task. Regulation will only increase; organizations will continue to be held liable for the actions of their third parties and need to stay on top of new developments to ensure the ongoing protection of their own organizations.
We’ve put together a checklist of functionality to think about when assessing third party risk management solutions. Click here to view Checklist.