It has been observed that the banking industry is increasingly relying on third-party vendors for various services, from IT solutions to customer service operations in today's unified world. However, with this dependence comes a heightened risk. Third-party risk management (TPRM) has become a focal point for banks aiming to safeguard their operations, reputation, and customer trust.
The Synopsis of Third-Party Risk Management Future
Third-party risk management has been around for some time, but its significance has grown exponentially in recent years. A study by Deloitte revealed that 87% of organizations experienced disruption due to third-party incidents, and 94.3% had low confidence in their risk management tools.
Several factors shape the future of TPRM:
Increased Reliance on Third-Party Software: Banks are turning to third-party applications for payroll processing, customer relationship management, and more. This shift means more data is stored in third-party applications and databases, increasing risk.
Collaborative Networks: The modern banking ecosystem involves many collaborators, including partners, suppliers, and contractors. This expanded network increases the potential attack surface for cyber threats that can negatively impact third-party risk management.
Regulatory Scrutiny: Regulatory bodies are paying closer attention to how banks manage third-party risks. Non-compliance can result in hefty fines and significant reputational damage. That is why it is necessary to implement an effective third-party risk management program.
Adopt Third-Party Risk Management Tool for Bright Future
To navigate the complexities of third-party risk, banks are turning to specialized TPRM tools. Predict360 third-party risk management presents incredible features to streamline the TPRM procedures. Some of its features include:
Comprehensive Risk Assessment: Evaluate the risk profile of every third-party vendor, ensuring they meet the bank’s security and compliance standards.
Real-time Monitoring: Continuously monitor vendors for enhanced third-party risk management to promptly detect and address potential risks.
Automated Workflows: Streamline the TPRM process with automated workflows, reducing manual effort and the potential for errors.
Vendor Onboarding and Offboarding: Standardize processes to ensure vendors understand and adhere to the bank's information security policies.
In conclusion, as the banking industry evolves and becomes more interconnected, the importance of robust third-party risk management cannot be overstated. Banks can ensure a secure and compliant future by understanding the future landscape of TPRM and leveraging advanced tools like Predict360.