Spencer previously worked for Bridgewater Associates where he led the operational risk team. Prior to that, he was head of risk for ICAP Americas. With Spencer’s extensive background he brought a unique third party risk perspective to our discussion.
Spencer Knibbe Interview Highlights
During our time, we covered:
- Organizational third party risk pain points
- Data aggregation
- Vendor management reporting
- And more
The 3 Biggest Third Party Risk Struggles
Spencer and I chatted briefly regarding his perspective on what the biggest struggles in third party risk management are right now. He shared the following:
- Data aggregation – it’s a holistic problem with all of the different elements that must be captured across an organization (e.g., many vendors, differing risk levels)
- Mission critical vendors – truly understanding their impact and ensuring they are compliant can be a challenge
- Cybersecurity – it’s particularly on the board’s and c-suite stakeholders’ radars
I certainly agree and especially found it interesting that he mentions mission critical vendors. I’d even add to that and say that identifying WHO the critical vendors are is a struggle at a lot of organizations.
Improving Upon the Risk Struggles
There are some third party risk best practices that Spencer shared with me during our conversation that I’d like to pass along. Implementing these best practices may even assist with lessening the burden of the three struggles previously mentioned.
5 Third Party Risk Management Best Practices:
- Develop a data aggregation methodology
- Have third party risk management consistency across the organization
- Centralize governance
- Centralize reporting
- Understand who is responsible for third party risk management
Speaking of third party risk management responsibility, based on my experience, third party risk should always be independent from the lines of business to be successful.
Spencer stated that cybersecurity is a top three issue right now at many organizations. In his experience, he sees a good number of firms starting to have security representatives on-site. Also, many of them are visiting their critical vendors often to verify they are following cybersecurity best practices and meeting expectations.
Spencer shared a lot of other great information with me during our time. I was glad to have the opportunity to speak with an operational risk expert and learn more about what he has seen recently in the industry.
On behalf of Venminder, I’d like to thank Spencer for his participation in this series. Be sure to listen to our discussion here to catch even more helpful information.
See how your peers and the financial industry are handling third party risk. Download the whitepaper.