Introduction to Third Party Risk Management Software

Third Party Risk Management Software

As any enterprise or business knows, third party suppliers and vendors form a large part of how successful a company can be in their industry. Forming those relationships and connections in your supply chain can make or break a business. However, this increases the risk of not only cyber security breaches, but also any risk the third party themselves may pose. Mitigating third party risk and adherence to regulations can often be a complex process for compliance officers. Third party risk management software is designed to make that process simpler and help protect your business by assessing, monitoring and mitigating risks that can have a detrimental effect on your relationships and business, as well as ensuring compliance with internal policies and outside regulations. As pressure grows on large, enterprise level companies to keep up with regulatory compliance and the handling and transmission of what can sometimes be sensitive data, risk management software is an excellent solution. Rather than spending a lot of time and resources on inefficient ways of dealing with the processes associated with management and third party information, you can streamline your corporate governance into one easy to use system.

There are many options and features available when choosing risk management software, depending on which software provider you choose. However, there are some main tools and features which are considered a must when considering implementing risk management software. Another thing to contemplate is whether you would be using risk management software as a standalone product or as part of your broader governance and risk strategies. Hopefully this guide can provide more clarity in your search and will help you decide which features are essential to the requirements of your business.

Questionnaires

When launching new business relationships, some risk management software can design, build and publish intelligent questionnaires to help identify any risks.

Auditing & Reporting

If you have a large amount of third-parties with access, it is imperative that you can easily track changes and views. Everything needs to be accountable. Every action made in a risk management software system is fully tracked in the audit logs, along with a time stamp and the user’s information.

If you are a larger business with a lot of third-party suppliers or vendors, then a self-reporting feature in the risk management software will be useful. It drastically reduces the time spent conducting reports on each third party and makes risk management far more efficient.

Trigger based alerts is a tool provided by most risk management systems. You can use this tool to configure and track important data and events, set alarms and notifications, ensuring nothing ever falls under the radar.

As an added feature you can have incident capture and reporting suites. This ensures all incidents are stored and automatically assigned for investigation, whilst analysis tools can assist with legal protection for you during the lifetime of a third party relationship. This helps you manage issues quickly and with the least amount of disruption to the running of the business.

Mitigating Risk

With the use of technology on the rise, fraud is becoming a more commonplace crime and whatever software you choose needs to reflect this risk. Incident management features can help detect and prevent fraud, and can help with monitoring and investigations, helping to protect your revenue.

To help mitigate risk, some software offers links to all leading external databases such as those from Dow Jones and Thomson Reuters, giving you access to advanced security profiling of both businesses and individuals and comprehensive background checks.

Identity management is another feature sometimes offered, which helps with understanding your customers, employees and vendors, making your business more secure and profitable. This also assists with monitoring and investigations. It can identify, authenticate and investigate individuals and companies, reducing the risk they may pose to your business.

Configuration

Some risk management software providers offer a bespoke configuration layer within their software. This helps increase accuracy in risk models and processes, as your risk management framework can be configured to match both perfectly, giving you a level of consistency vital to the success of risk governance and management.

As businesses expand and relationships change and grow between your business and third party suppliers and vendors, risks also change and need to be managed. This means there has to be a certain level of configuration ability within your software. Some providers have an access control interface, allowing you to have complete control over what changes can be made, and who has access, which improves security and makes you less vulnerable to outside influences and attacks.

Central Repository

Due to the expansion of technology and the increased use of websites, file shares and collaboration software, many companies have all their documents and data stored across different sites, departments and even locations. This is inherently risky, not only for how easily accessed sensitive data may be, but also the increased risk of simple human error.

Every risk management software provider will have a central repository. This means all policy procedures, documentation and data are stored in one single location. Certain providers will even let you select the server your information is hosted on, depending on your legislative and jurisdictional requirements. Reducing the risk of exposure to negative outside interference.

Search functions in the software and centralised secure administration of third party profiles, enables easy and transparent access throughout the business and reduces the time taken to find or track the documentation you need, be it policies, contracts or audit trails.

Encryption

As a rule, software providers will have both two-factor authentication and secure encryption for your data. It doesn’t matter how large or small your business is, you should never assume you wouldn’t be targeted and so data protection is essential.

Configuration

If you are unsure of how risk management software might integrate in your company, then you need to look out for a provider that offers configurable software. This will enable you to tailor the fields, screens and processes to match the needs of your business