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Third-party relationships are a strategic imperative for many businesses as they expand and diversify their operations. Third parties can provide specialized knowledge and help organizations rapidly scale. But they’re not immune to risk.
Businesses traditionally faced constraints managing their known third-party relationships. And many continue to have limited, if any, visibility into fourth, fifth or nth parties in their supply chains. This leaves them susceptible to a myriad of risks that transcend the supply chain, including operational disruption, financial losses and damage to their brand.
Risk intelligence data mining is emerging as a powerful tool to enhance third-party risk management.
Businesses can use advanced analytical techniques to identify, evaluate and prioritize risks by gathering and analyzing large amounts of data from internal and external sources. This generates insights into potential risks that may affect their operations—a single pane of glass.
But risk analytics teams need to bring more to the business than data scientists, tools and backward-looking analysis if they’re to mine data effectively.
A human-led and tech-powered approach helps pinpoint meaningful risk signals and create actionable risk intelligence. Bringing a multidisciplinary community of solvers together helps risk management teams better understand the problems the business is trying to solve and the analytics that will bring the most value.
This also includes connecting third-party risk management teams to their organization’s broader risk strategy and operating within the guardrails set by the company’s overall risk appetite.
We’ve seen organizations improve the alignment between their risk appetite and business goals by applying data mining to their third-party risk management. This often appears in several ways:
Combining business insights, expertise and powerful technology tools can create a panoramic view of your unique risk landscape that lets you engage third parties with confidence. This builds trust with stakeholders by helping you deliver and sustain the outcomes they expect of your business.
As organizations navigate a rapidly evolving and interconnected business environment, risk intelligence data mining will become an important tool in ensuring effective and resilient third-party risk management.