The Evolving Frontier of Proactive Risk Management

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In an era of unprecedented technological transformation, the rise of AI and the Internet of Things has unlocked exciting opportunities while simultaneously intensifying the complexity and scale of risks. This evolving landscape demands continuous advancements in monitoring systems to address emerging threats and maintain resilience.

At a recent CeFPro event, a senior executive from one of the world’s largest retail banks highlighted the critical role of continuous monitoring tools in third-party risk management.

“We’ve been using supply chain monitoring tools for the last year and a half,” he explained. “They send alerts, which require review and analysis with subject matter experts from cybersecurity, compliance, and financial teams.

These alerts can signal potential financial issues or even future bankruptcies. While they don’t always trigger an exit plan, they allow us to track specific services and third parties closely.”

Despite their utility, no system is flawless. “You need to recheck them, talk to your third party, improve your review processes,” he cautioned. “It’s all about partnering with the third party to ensure a thorough risk assessment.”

Build safeguards in from the start

According to the executive, effective third-party risk management begins with embedding service level agreements (SLAs) into contracts.