Implementing best practices around third-party risk management is often seen solely as a cost to the business. However, there are compelling financial reasons from the efficiency, risk reduction, and opportunity that a best-in-class technology brings to third-party compliance and risk management programs. TDI offers a third-party risk management platform, TDI Diligence Suite, and due diligence services to manage these critical relationships while helping companies find additional value and opportunity.
The Value of Efficiency
Many companies rely on a distribution network for getting products to market. Each distributor in this network poses a risk to the company when it comes to bribery and corruption. It can take weeks if not months to diligence a distributor and get them approved. Each day that goes by waiting to onboard this new third party is a day the company is not getting the product to the end customer. When you scale this example to hundreds, thousands, or tens of thousands of distributors, the amount of delayed sales revenue becomes significant.
A best-in-class third party management system avoids the loss or delay of significant revenue. Automated workflow, screening, risk management, and approval processes combined with a great user experience can reduce the time to onboard a new third party by several weeks, enabling the new distributor to produce revenue much sooner.
The Value of Risk Reduction
The financial value of a third-party risk management system often comes from what you do not spend in terms of regulatory fines. Corporations, particularly those with a global footprint, need to examine and monitor the third parties they work with to manage risk, protect their reputation, and comply with international regulations. This process is rarely straightforward and can be tedious, time-consuming, and expensive. Failure to address the risks associated with operations, assets, and business relationships can lead to significant risk at a great cost to the company.
When issues with third parties arise, having an effective compliance program already in place that uses a risk-based approach supported by best-in-class technology will demonstrate to regulatory authorities that your company takes your compliance program seriously. It will also enable quick-and-easy access to every decision and action associated with each third party in a single system of record.
The Value of Opportunity
The value of opportunity comes into play when a company uses its enterprise third-party risk management system to look across its entire universe of third parties from various perspectives. Using the right system will enable new insights into business operations, and the ability to identify hidden risks and new opportunities in an existing network can happen in many ways. One example is looking at red flags with your third-party network globally, and then diving down locally with a mouse click. Navigation through the third-party population can result in reducing the need to expand your network in certain jurisdictions by leveraging existing relationships. By avoiding the cost of onboarding unnecessary third parties and proactively removing problematic third parties, a company can be well poised to reap financial benefits.
April 29th, 2024