Third Party Risk Management Trends to Watch Based on Global Survey by Deloitte
What are the biggest risk concerns this year? How is COVID-19 continuing to have an impact? How are costs impacting practices? All of these questions and more are answered in Deloitte’s 2021 global survey on third-party risk management. At CENTRL it’s our job to stay on top of emerging trends and pass them on. We dove into the survey results and have compiled the most compelling findings below.
Digital Risk is the Biggest Perceived Threat
Over half (53%) of respondents want to improve real-time information, risk metrics and reporting. This can be difficult as 71% see digital risk as the top emerging concern for third party risk management. As a hard to measure risk with the world increasingly going digital, this is understandable. Of the most common concerns around digital risk 52% are articulating and quantifying third-party opportunities and threats in real-time digitally, 47% are legacy infrastructure at third parties that impairs the rollout of digital ways of working, and 44% are third parties’ ability to keep pace with new ways of working and to embrace digital to the core.
Interestingly enough the top emerging risk domain that suffers the most from inadequate investment is digital risk. Businesses recognize the need for digital protection, but have not caught up to actually spend yet.
The Impact of COVID-19
While some industries are experiencing recovery coming out of the pandemic, TPRM is not there yet. Many businesses are still responding to COVID-19 implications. 45% of respondents are in the response phase, 29% in the recovery phase, 26% in the thrive phase.
COVID-19 is a wake-up call to increase TPRM maturity. Pre-pandemic only 26% of respondents felt they were integrated or optimized in their level of TPRM maturity. This has changed, now 31% are aiming for a high level of maturity. Businesses need to invest further in TPRM in the year ahead to counter COVID-19 implications.
The Cost Of Internal Solutions
According to Deloitte’s survey, half of organizations believe they need to make at least some major investments to re-energize their TPRM programs. And, we know organizations were more likely to face a high impact third-party incident if they had not invested adequately in TPRM.
Most organizations have found that outsourcing is the economical decision, but as risk rises, they feel more comfortable with an in-house team. However, these businesses are perhaps not realizing the full financial positive impact outsourcing can bring. According to the survey, 50% of respondents have faced high or very high pressure to save costs by outsourcing.The cost of TPRM solutions is too high for most organizations. The time and resources invested in an internal team far outweigh the cost of an outsourced solution.
A Platform That Works For You
CENTRL’s Vendor360 is an advanced and flexible third party risk management platform for aggregating your vendor data, automating your assessments and getting control over your vendor risk management process. Vendor360 is a next-generation, comprehensive vendor risk management suite.
