The problem with legacy third-party screening
Businesses that haven't prepared for this new reality can find it challenging to thoroughly vet third parties who form linkages and connections beyond their control. In many such firms, often, there's no single owner to manage third-party risks. The responsibility resides between risk, compliance, legal, procurement, and business stakeholders to manage it. This results in a manual, reactive, decentralized, and siloed approach to third-party screening. Under such circumstances, due diligence can fall through the cracks. And with increasing regulatory demands and the rising volume of third parties, companies become vulnerable to penalties and reputational damage.
Enterprises that aren't applying the right mix of digital technologies such as artificial intelligence and machine learning with compliance domain knowledge to counter these issues often lack the means to proactively identify and detect risks from a multitude of data associated with third parties. They are forced to react after the fact.
There's a practical way forward that addresses these pitfalls – and lets you be proactive. It calls for a risk-based, holistic, and future-ready third-party due diligence approach. This evolutionary approach demands a new framework supported by the right digital technologies and domain expertise that enhances risk coverage – extending it beyond just the suppliers and identifying linkages among parent companies, principals, shareholders, and government bodies. It also accelerates a targeted and risk-based third-party assessment. The outcome of which becomes quickly visible – a sharp, insightful, comprehensive picture of your company's third-party risk exposure.