Revolutionizing Third Party Risk: How to Use Industry Utilities to Build a Streamlined Process

Revolutionizing Third Party Risk: How to Use Industry Utilities to Build a Streamlined Process

Despite their best efforts to administer an efficient and effective process, many organizations spend an inordinate amount of time, effort, and resources conducting initial and ongoing due diligence on their third parties. Consequently, companies that wrestle with a less than optimal approach to third-party risk management run the very real risk of eroding their ability to compete in an increasingly dynamic, fast-paced marketplace.

With these facts in mind, how can businesses improve their approach to third-party risk management, without shifting too much of the burden to their third parties, and while also ensuring their ability to comply with regulatory expectations? The answer – industry utilities.

Opening the Door to a More Sophisticated Approach to Vendor Risk

To improve upon their approach to vetting third parties, businesses increasingly are turning to utilities, which are solutions that capture the combined expertise of entire industry regarding the performance of third-party risk management.

Using a standardized approach to the third-party assessment process, a utility provides businesses with the means to streamline the control assessment process and employ best practices. Third parties also benefit from the existence of a utility to drive the third-party management process as it removes the need for ad-hoc questionnaires, while also minimizing the need for onsite assessments.

A utility model harmonizes the third parties’ control environments by looking across them, the products and services in their catalog, and what they provide to core customer groups to perform a one-time review that minimizes the effort and impact on the third party, while maximizing the coverage and value of the data provided to customers. A successful industry utility should deliver validated risk intelligence the industry needs to gain transparency across its third-party providers. That requires structured data validation, remote and onside data validation, including the validation of control frameworks and standards.

Key requirements of an industry utility include:

  1. An agreed-upon and standardized data collection and assessment process built by industry practitioners
  2. An agreed-upon and standardized assessment testing methodology
  3. In-depth quality control and quality assurance process

Why Industry Utilities Can Be the Answer to Revolutionizing Third-Party Risk

TruSight Solutions is one example of a leading industry utility. (There are several across third-party risk.)

TruSight is the best-practices third-party risk-assessment service created by leading financial institutions for the collective benefit of the financial services industry and their  suppliers, partners, and other third and fourth parties. TruSight simplifies third-party assessments by executing best-practice, standardized assessments once and making them available to many – enabling financial institutions to gain greater visibility into potential risks and manage third-party relationships more efficiently and effectively.

Standardized assessments from an industry utility like TruSight with a centralized third-party risk platform to support the third-party due diligence process can successfully provide businesses with a detailed audit trail they can use to demonstrate their program’s effectiveness to regulators.

To learn more about industry utilities and their ability to transform your organization’s approach to third-party risk management, download the latest white paper, co-authored by ProcessUnity and TruSight, Revolutionizing Third-Party Risk Management: Leveraging Industry Knowledge to Build a Streamlined and Repeatable Process.

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