It can be tempting to cut corners when handling third party risk management at your institution.
When I was a few years younger, I used to love to race in criterium style races… for those of you who may not be familiar with bicycle racing, a criterium, or “crit”, is a high speed, action packed race on a closed circuit, usually with four 90-degree turns.
It’s easy to get pinched or bunched up in a corner and, as tempting as it looks, it would be incredibly dangerous to cut the corner by hopping the curb – and also against the rules.
The same applies to third party risk management. The process can be laborious and temptation is always there to take the easy way out. Let's go through why you shouldn't give into it.
Maybe you've had these thoughts
Here are some common thoughts people have:
- I’ve already seen this document last year, maybe I don’t need it this year.
- I know I’m not going to get this document, so I’m not going to ask.
- I know they're a good company and I’ve got everything I need, so why bother reviewing it?
- There’s no way an examiner is going to want to see something on this company, so why ask?
Tempting. But WRONG. OH, SO WRONG.
Cutting corners will hurt you in the long run
I’m not skilled enough to deftly hop and curb and cut a corner on a bike – it wouldn’t end well and would probably go viral on YouTube. The same is true in my working world.
Cutting corners and taking the easy way out may save time and effort in the short term but leaves you in an impossible position in the long term.
If something happens – and eventually it will – you wouldn’t want to trace it back to a step you skipped. That would hurt your financial institution and you personally. For example:
- Suppose you don't do a background check on the owners and later learn that they have ties to a foreign government?
- Suppose you don't verify their good standing with the Better Business Bureau and later find your call center swamped with complaints?
- What if you don't thoroughly analyze their SSAE 18 report and later find there are huge gaps in your understanding of their business processes?
The extra time and training can always pay off.
See you at the races.
Learn about the three most important elements to vendor management via our Vendor Management Umbrella Series. Download our infographics.