Products

Vendor Risk Management

Banks, financial services institutions and fintechs often depend on a large number of vendors and service-providers to fulfill their business processes and satisfy their end-to-end operating requirements. Single sourcing puts institutions at risk by making them too dependent on one vendor. On the other hand, multiple sourcing dilutes vendor accountability, and makes vendor collaboration and coordination much more challenging.

In both sourcing models, vendor risks are high, and should be managed and mitigated through a robust Third Party Risk Management (TPRM) or Vendor Risk Management (VRM) approach.

Reasons Financial Institutions are Collaborating with Vendors

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    Performance boosting, efficiency
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    Cost reduction, comparative costs
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    Access to specific expertise, specialization

Some of the areas where institutions are outsourcing their processes to third party vendors are:

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    Customer facing activities
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    General Operations
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    Regulatory compliance activities
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    Risk and knowledge process management

Types of Vendor Risks

Although hiring a third-party vendor makes processes simpler and more cost-effective, it also brings in multiple risks such as customer service, fiduciary risk, breach of confidentiality, breach of contract, data errors, fraud, and loss of data – all of which have the potential to lead to financial and reputational loss. Such vendor associated risks are often unique, relationship-dependent, and significantly vary based on the type of vendor chosen, as well as the process or service outsourced.

Credit Risk

Strategic risk

Credit Risk

Reputation risk

Credit Risk

Industry risk

Credit Risk

Geographical risks

Credit Risk

Regulatory & Compliance risks

Credit Risk

Operational risks

Credit Risk

Transaction risks

Credit Risk

Credit risks

Credit Risk

4th party risks

How can RiskCounts help you in Vendor Risk:

  • RiskCounts has a comprehensive approach and a Risk assessment / ratings model, that can rate a vendor using Macro Variables, Financials and Operational risk inputs
  • Map vendor risk assessments to organizational policies and regulations to ensure compliance.
  • Measure and manage vendor risk based on multiple performance indicators.
  • Generate flexible vendor risk reports to manage vendor relationships and strategies.
  • This approach is one of the most comprehensive approaches and provides with complete risk monitoring and risk mitigation of the vendors
  • Provides you with an integrated approach to manage vendor risks and issues, and can be linked to any vendor data aggregation portal