Are you a compliance professional tasked with managing third-party risk relationships? Are you overwhelmed with the sheer amount of data that comes with that responsibility? How do you engage in implementation and maintenance. To answer these and other questions, I recently visited with Kairi Isse, Diligent’s Managed Services Group Manager, to discuss why the step of management after the contract is signed is the most important part of the third-party risk management cycle. She discusses the importance of ongoing monitoring and why it is critical for modern companies to understand the risks posed by their third parties. We consider the uses of an AI-driven ongoing monitoring search tool, allowing a customizable, auditable way to ensure compliance and reduce risk. Join us as we explore this most critical step on the life cycle of the third-party risk management—managing the relationship after the contract is signed. Here are the steps you need to follow to manage relationships with third-parties after the contract is signed:
- The importance of ongoing monitoring for third party risk management to minimize risks of data breach, bribery, and fines.
- Design and implement an effective ongoing monitoring program that works in practice.
- Utilize AI-driven ongoing monitoring search tools to focus on the right data for your organization.
- Create an audit trail to demonstrate the company’s continuous improvement based upon ongoing monitoring.
- The importance of ongoing monitoring
Ongoing monitoring for third-party risk management is key to minimizing risks of data breaches, bribery, and fines. Through proper monitoring and management of third parties, companies can ensure that their vendors are not putting them in a vulnerable position. In this interconnected world, third party risk is a significant compliance threat and can cause damage to a company’s reputation, leading to potentially hefty fines and perhaps more importantly reputational damage. Utilizing an AI-driven ongoing monitoring search tool can help reduce the haystack of data and find the needle, as well as a human element to review and analyze the watch list screen results. The key is to ensure their ongoing monitoring is effective and efficient throughout the entire life cycle of their third-party relationships.
2. Design and implementation of ongoing monitoring
Designing and implementation of ongoing monitoring that works in practice is a critical step in managing a third-party relationship after the contract is signed. Utilizing AI-driven ongoing monitoring search tools is essential for a successful third-party risk management relationship. It is important to customize the search to focus on the right data for your organization, as this will make it easier to find the needle in the haystack. An AI-driven search tool should include all the big databases and sanctions watch lists, as well as adverse media, to ensure that the third party poses no regulatory risk; all after the contract is signed. There should also be transaction monitoring which reviews the sales or other transactions by the third-party. Finally, never forget the human element, to ensure that the data is correct and validated before final decisions are made.
- Analyze and validate thru AI-driven search tool
To analyze and validate watch list screen results and consider only true matches for further review, utilize an AI-driven ongoing monitoring search tool that includes all the major databases, sanctions watch lists, and adverse media. You should customize usage to your company’s risk profile, industry, and regulations your organization is required to comply with. Next review the search to determine if they are true matches or false positives. This helps to reduce the amount of noise and unnecessary data, as well as provides an auditable trail for every action. These actions will help create an auditable document trail which can be presented to auditors or regulators.
- Continuous improvement through ongoing monitoring
The next step is continuous improvement based upon your organization’s ongoing monitoring. Here an audit trail to demonstrate the company’s maintenance of ongoing monitoring, is critical. The Fox Maxim of Document Document Document, is still alive and well in the era of AI. Moreover,
This allows your organization to customize their search to focus on the right data for their organization and industry, eliminating the noise from irrelevant data sets. Once again the human factor comes into play through the review and analysis any potential matches from the AI searches to validate true matches. All of these steps should be auditable, recording every action taken in the system, allowing a company to demonstrate their continuous improvement based upon ongoing monitoring.
Managing your third-party relationship after the contract is signed is still the most a critical step any successful third-party risk management protocol. A well-designed and implemented compliance program should include regular screening of global databases and adverse media, even after the contract is signed. Transaction monitoring should also be used to test individual sales for any issues. An AI-driven ongoing monitoring search tool that can help reduce the haystack of data and find the needle, as well as a human element to review and analyze the watch list screen results. With these steps, your organization can be confident that your third-party risk management program is effective and efficient throughout the entire life cycle of your third-party relationships.
For more information, on Diligent’s Third Party Risk Management solution, click here.
Listen to Kairi Isse on the podcast series here.
