Third Party Oversight

Suppliers are seamlessly embedded and integrated into enterprise supply chains. Fortune 2000 enterprises alone work with thousands of third parties, large and small, cutting across multiple businesses and functions. Each of those third party relationships contributes to overall risk. In an earlier blog, we spoke about how global sourcing magnifies risk.

Essential to building a comprehensive Third Party Oversight program is a clear understanding of the importance of third party risk. Auditors are challenging businesses on how they identify and manage the risks of third parties that have significant impact on reputation, compliance, and business operations.

A structured approach to defining risks across your global supplier portfolio is the essential first step to ensuring a successful Third Party Risk Management (TPRM) program.

The primary task of risk experts while instituting Third Party Oversight must be to establish an objective framework to assess, quantify, and monitor risk. Imperative to success is to evolve a common understanding across your organization based on the precise nature of supplier risk and its potential impact. While over time supplier assessment processes might have become more rigorous, some suppliers may have slipped through the vendor assessment cracks, throwing the door open for potential disruption and losses.

Supplier risk, in the global sourcing context, takes many forms.

Devising a methodology to define and quantify risk is a rigorous and often time consuming affair. However, it must not be a one-time exercise. Risk identification and management is a critical component of the entire third party relationship life cycle. Continuous monitoring is the foundation of successful supplier risk management.

Risks never end; risk monitoring can’t either.

In an era of ballooning digital convergence and increasing regulation, enterprises must do more to protect themselves from third party risk.

This is where Governance, Risk & Compliance tools such as Supply Wisdom can play an important role in your Third Party Risk Management program. Supply Wisdom equips you with an objective methodology to evaluate supplier risk. Supply Wisdom quantifies third party risk across nine parameters:

  • Financial Risk
  • Service Maturity
  • Governance
  • People
  • Infrastructure
  • Clients
  • Partner Ecosystem/Alliances
  • Thought Leadership
  • Legal/Compliance & Reputational Risk

Auditors can, at a glance, know which suppliers pose significant risk, drill down into the nature of the risk, and institute mechanisms to mitigate potential impact on business operations. Supply Wisdom equips Sourcing Auditors and Control practitioners with proactive and continuous supplier risk monitoring, allowing them to focus on mission critical suppliers and managing response to potentially disruptive risk events. Low risk and/or less business critical suppliers can be put on periodic risk reporting schedules, saving review time for important and high risk suppliers.

Tap into real-time intelligence on your business critical suppliers to add certainty to your operations with Supply Wisdom!

John Bree

John Bree

John is a financial industry professional with a proven track record in developing and managing AML/CTF, KYC, Anti-Fraud and Vendor & Third Party Risk Management programs. He has held senior positions in New York, Tokyo, Singapore and London for Citi and Deutsche Bank covering corporate, investment, commercial and consumer banking operations. He has proficiency developing and implementing analysis, operations, monitoring and investigation systems and processes involving transaction accounts, credit cards, debit cards and online banking.

John has managed global staffs and corresponding budgets in multiple locations and delivered cost efficient and operationally effective programs ensuring compliance with local and global regulatory requirements. Through interaction with Internal Audit and regulatory agencies including FRB, OCC, ECB, UK-FSA, MAS and Japan-FSA resolved MRIAs, MRAs and Findings on time and without penalty.
John Bree