Very recently, I had the opportunity to be a featured expert in Venminder’s Thought Leadership interview series. In this series, Venminder speaks with industry thought leaders to hear their perspective and advice on third-party risk, best practices and trends. I’m looking forward to sharing with you some of the key takeaways from my discussion with Branan Cooper, Venminder’s Chief Risk Officer. You can also check out the podcast here.
During our time, we covered:
As CEO of Argos Risk with more than 30 years in the industry, I’m frequently exposed to the many ongoing vendor monitoring challenges that organizations face daily. With that, over the last 12 months I’ve seen quite the shift in ongoing monitoring patterns and trends at organizations. Risk professionals are feeling the pressure to ensure they’re performing ongoing monitoring and that they’re doing it very well. Therefore, they’re seeking automated third party risk tools more and more to assist them with the responsibility as manual alerts, like Google News, just aren’t cutting it anymore.
Branan and I took some time to discuss the biggest third-party risk challenges right now. Here are the top three that I see:
Thankfully, there are best practices that can help combat the many third-party risk challenges that you’re presented with every day. Branan and I chatted about some in more detail. They include:
Offering a vendor monitoring solution to over 30 industries has given me some additional insight into the common needs at many different company types. I’m finding that many industries are mirroring the same level of due diligence and best practice expectations that are implemented at financial institutions – for example, insurance and healthcare. This seems largely due to financial institutions requesting other industries, their third parties, to increase their level of oversight before they will engage in a partnership with them.
Additionally, remember that staying abreast industry news is key to ongoing monitoring. Regulators, just like all of us, are watching the daily news. They see each breach, operational disruption and other business impacting events. Of course, because of this, they continue to increase regulations and take preventive measures.
Branan and I discussed consumer complaints briefly as these have become a focal point with the introduction of the CFPB’s complaint database and more and more social media complaints. In my experience, you must study the behavioral trends in consumer complaints, meaning really analyze them by looking at the CFPB complaints database as well as other complaint boards and then determining how each one impacts your organization. When you’re reviewing the complaint, ask yourself things like, “What kind of follow up analysis needs done?” and “What potential long-term effects is this going to have on us?”
Do not just look at a complaint and forget about it. It’s critical to determine next steps and address the accusation. If your third party is receiving a ton of complaints lately, then it may be time to reconsider the partnership. Do you need to identify a back-up vendor, to be safe, or replace them altogether?
Branan asked me an interesting question. He said, “With all the recent changes in leadership at the prudential regulators, what do you see for the rest of the year from a regulatory compliance perspective?” Well, put frankly, no one ever really knows what the prudential regulators are going to do next. However, some shifts that I predict include:
I enjoyed my time speaking with Branan and the Venminder team. Looking forward to the next opportunity to continue our discussion.
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