Securing Third-Party Risk Management with the Right Data - Veridion
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Risk Management

Securing Third-Party Risk Management with the Right Data

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The global challenges of the past few years (a pandemic, wars, supply chain disruptions, climate change, etc.) have highlighted just how linked together we are.

The global challenges of the past few years (a pandemic, wars, supply chain disruptions, climate change, etc.) have highlighted just how linked together we are.

Unfortunately, these challenges also highlighted the degree of risk to which we are all exposed to, derived from these long and sometimes hard to visualize global business chains.

In this context, third party risk management emerged as a top executive concern and has become a crucial agenda for any company large enough to be exposed to a high degree of risk from the multitude of third parties they are working with, and it all starts from the information level.

Here is a summary of what you can expect to find in the report:

A. The Basics of Third Party Risk Management

  1. What Is Third Party Risk Management (TPRM)?
  2. Why Is Third Party Risk Management Important?
  3. What Is the Difference Between a Third Party and a Fourth Party When It Comes to Risk?
  4. Who Should Care about Third Party Risk Management?
    • Example #1: Special Case Spotlight: Third Party Risk Management Service Industry
    • Example #2: Special Case Spotlight: Procurement Industry
  5. The Main Layers of Third Party Risk Management
    • Foreign Ownership, Influence or Control (FOCI)
    • Regional Risk
    • Operational Risk
    • Cybersecurity Risks
    • Supply Chain Riskz
    • Financial Risk
    • Environmental, Social or Governance (ESG) Risk
  6. Mitigating Challenges from Political or Economic Sanctions with Data-Driven TPRM
    • Early Detection and Monitoring
    • Enhanced Due Dilligence
    • Regulatory Compliance
    • Hypothetical Examples
      • Example 1: Export Bans and Sanctions (Uyghur-related)
      • Example 2: Risk of Working with Subsidiaries of Sanctioned Companies



B. Creating a Third Party Risk Management Framework with Reliable Data

  1. Why Data Matters for Third Party Risk Management
  2. How to Start Approaching Third Party Risk Management, Hands-on
    • Lessons Learned in the Past Year Dealing with TPRM
    • Understanding the Criticality of Third Parties
  3. Defining a Third Party Risk Management Framework
  4. Common Challenges in Developing Third Party Risk Management
  5. The Framework of Veridion Data for Third Party Risk Management

It all starts with the information layer.

  • Third Party Risk Management is the act of risk mitigation, but the critical differentiator in managing it, is the speed to knowing, addressing, and the quality of information you have.
  • As uncertainty arises, such as a tsunami off the coast of Florida, or sanctions are released, it is paramount to understand the locations of all business entities active within a zone, and their purpose to truly understand the effect.
  • Ex. If your manufacturing site is located within these parameters, your supply chain will be affected, and if so, do you have an ability to source identical or better suppliers?

But how does better data tie into TPRM,

and what are the exact ways to leverage it for a better understanding of the third parties that your organization is working with and how they might impact the flow of goods, information or become a liability from an asset? We’re exploring all the unique data points that are crucial for rethinking TPRM with several steps ahead of trouble and keeping your organization safe.

The past year has seen a rise in significant digital supply chain attacks, 

such as those targeting MOOVEit and Citrix Netscaler, as well as third-party breaches involving companies like Okta and Dollar Tree or, even more concerning the recent breach of the UK military via third parties.

These incidents underscore the urgent need for enhanced visibility across the entire third-party ecosystem, including the identification and mapping of fourth, fifth, and subsequent parties. Access to reliable and comprehensive business data is crucial for achieving this visibility and mitigating risks.

Here are some of the common challenges in developing effective third-party risk management strategies 2024.

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Internal Data Asset Challenges:

  • One of the primary obstacles in developing an effective third-party risk management (TPRM) program is the burden of building and maintaining an internal data asset.
  • Tracking and monitoring supplier and business information requires significant resources and expertise. The complexity and resource intensity of this task can divert attention from core business activities, leading to inefficiencies and potential oversight of critical risk factors.
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Difficulty Acquiring Global Data:

  • Effective TPRM necessitates comprehensive and accurate global business information and profiles. However, vendors often struggle to acquire such data due to variations in data availability and quality across different regions.
  • The lack of standardized global data hampers the ability to perform thorough risk assessments and undermines the overall effectiveness of the TPRM program.
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Need for Updated Information:

  • Continuous access to updated and recent information is vital for accurate and reliable risk assessments. The dynamic nature of business environments means that risk profiles can change rapidly. Without timely updates, risk management strategies may rely on outdated data, leading to ineffective decision-making and increased vulnerability to emerging threats.
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Dependence on Existing Providers:

  • Many vendors rely heavily on established data providers like Dun & Bradstreet (D&B) for their risk management needs. While these providers offer extensive data, they may not always meet the specific requirements for robust TPRM.
  • Issues such as limited data breadth, depth, or timeliness can hinder the ability to make informed risk assessments, necessitating a more diverse and comprehensive approach to data sourcing.
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Downstream Processes Relying on Quality Data:

  • The quality and comprehensiveness of company data are critical for various downstream processes and analytics. These processes include data segmentation, adding descriptive information, and enhancing models and procedures used to generate insights for customers, such as n-tier supply chain maps.
  • Poor-quality data can compromise these downstream activities, leading to inaccurate insights and ineffective risk management strategies.
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95% of the data points required for building comprehensive TPRM initiatives

are available through the Veridion Match & Enrich API in approximately 1.5 seconds, starting from simple inputs like a set of business names, address, or website link. Alternatively, you can use Veridion’s Search API to discover alternative third parties that match discerning criteria if you discover that you need to diversify your supplier base in order to deal with TPRM restrictions. 

If you want to:

Deep dive into the key challenges for developing timely TPRM initiatives

Learn more about data for TPRM

Subscribe with your email and you'll immediately receive our in-depth report

“Securing Third Party Risk Management with the Right Data”

With this report, you'll unlock answers to key questions, such as:

Can You Find Replacements to Existing Providers Easily?

Effective TPRM often requires you to have solid and carefully thought out alternatives ahead of disruption actually taking place. The report discusses how you can build this kind of resilience that companies increasingly need.

Are There Hidden Risks Attached to Your Connected Third Parties?

Gain the insights you need to discover whether one of your suppliers will not be able to meet your demand due to climate events or if one of your partners is connected to another business entity that faces sanctions or poses a reputational risk for you.

What Are the Main Obstacles to TPRM?

Get a better idea of the challenges that can hinder your TPRM progress so you can preemptively address them starting from a position of strength.

How to Unlock the Potential of Next-Gen Data?

Have a better overview over the crucial data sets that you must plan around in order to make the informed decisions and backups that will consolidate your TPRM strategy. 

Register now and take the first step towards a more efficient, profitable future in procurement.

You will find more than just a research report—it’s a roadmap to success, offering in-depth analysis of the main challenges ahead and practical solutions for harnessing the full potential of rapid data access in procurement.

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