- Outsourcing is cheaper for organizations who are located in higher cost of living, high tax rate states. The cost of labor, for example, in Orange County, California is considerably higher than Elizabethtown, KY, yet the expertise offered is second to none but at a reduced rate. By leveraging the geographic differences, savings can be made without sacrificing quality. While offshoring a service usually has a lower cost of entry, the results in expertise, quality and turnaround time may be perceived as lacking. Leveraging the onshore geographic model can provide immediate savings while not impacting the desired results.
- Time and availability. Outsourcing to a third party risk vendor also provides the advantage of not having to wear many hats, or becoming stuck in the weeds with the day-to-day business operations. Third party risk oversight often has the danger of becoming too close to vendor partnerships. Outsourcing allows for a true impartial review of a vendor’s controls and policies which ultimately informs you of any perceived risk issues, which may put you in harm’s way. Paying for the analysis and review when you need it for an executive board review or regulator/state examiner review has proved to be a much more efficient process than relying on an internal resource who is busy juggling multiple business demands.
- Knowledge of the industries you serve. Third party risk is a varied discipline and covers many areas of concern. Financial, reputation, operational and credit risk all require expertise. Any third party vendor offering such oversight functions is typically working in these areas on an everyday basis. Having expertise at the loan and transaction service level is oftentimes a differentiator when reviewing a third party risk solution.
Outsourcing certain third party tasks can be powerful to your organization.
To learn more on how you can utilize Venminder, download some of our samples.