In today's complex and volatile global markets, third-party relationships are a critical source of competitiveness and growth for financial services businesses. Financial institutions are increasingly reliant on third-party suppliers to deliver business-critical products and innovative services in the fast-paced and ever-evolving digital age.
But as our research indicates - and as the disruptive impact of COVID-19 has made clear - TPRM needs to be approached in a more-consistent manner that ideally relies on a centralized and refined service model across the entire organization. Failures by third-parties can rapidly tarnish business reputations, unleash significant downstream operational and cost implications, and generate significant penalties for regulatory noncompliance or misconduct.
While some financial institutions are indeed making progress on TPRM, particularly via technology innovation, many still need to invest in areas that include streamlining workflows and optimizing the technology enablement of their TPRM programs. Despite advances in governance, risk and compliance (GRC) solutions, many financial institutions today are still conducting many aspects of their TPRM process via email or spreadsheets.
The KPMG Third Party Risk Management outlook 2020, a survey of third-party risk management (TPRM) executives, including leaders at financial services organizations, revealed that many businesses within the financial sector appear unprepared for the complexity of assessing diverse risks cohesively across business lines and regions.
Throughout this document, "we", "KPMG", "us" and "our" refer to the network of independent member firms operating under the KPMG name and affiliated with KPMG International or to one or more of these firms or to KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
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