Although digital advancements have helped streamline business processes, they have also spurred a handful of risks relating to data breaches. Due to this, many organizations are actively seeking to implement 3rd party risk management strategies to help protect themselves from a cyberattack. Put simply, 3rd party risk management is a means for businesses to analyze and mitigate risks that may arise due to a devastating attack on a third-party vendor. The effects of which, will not only impact business endeavors and daily operations, but will also wreak havoc on your company from an economic standpoint.
The repercussions of not having a sound defense plan can be undeniably costly. A cyberattack can easily effect a company’s monetary status, lose customer trust, and destroy their reputation. Some of the common challenges companies face when delving into 3rd party risk managementinclude, the complexity of their vendor network, neglecting to centralize processes, cost concerns, satisfying regulatory responsibilities, and dissecting assessment data into actionable measures. Below is a more in-depth look at each of these problem areas.
Growing Intricacy of the 3rd Party Network
As organizations begin to diversify their operations, develop new markets, and navigate into new geographical locations, they will find a corresponding influx in 3rd party partnerships. These partnerships can occasionally be overburdening, as many of them delve into unchartered waters and create complex situations. Like the case of trying to manage certificates of insurance when multiple vendors are consistently used for different projects. Companies want to allocate the appropriate resources to third parties, but finding a cohesive system that effectively monitors them is difficult.
Failure to Collaborate
For many businesses, there is no centralized approach for tackling 3rd party partnerships. Their network of vendors is so extensive that management of these platforms has been delegated to individual departments. However, this system can quickly become problematic as one vendor may require attention from multiple departments. This can result in the inefficient duplication of work if research and development personnel, production, and the finance department all assess the same 3rd party.
Companies will often perform a risk assessment of new 3rd party vendors to ensure all of the necessary compliance components are in place. However, due to the costs of running and monitoring subsequent due diligence checks, many companies do not take any further action. The manual preparation of reporting data is time-consuming and depletes resources, as these processes routinely require mounds of paper documentation.
Increasing Regulatory Procedures
Adhering to compliance obligations has become progressively overwhelming. In order to avoid a plethora of legal battles and costly penalties, companies must execute 3rd party management tactics to ensure they are compliant. Governing certificates of insurance is paramount in mitigating risk and must be done to ensure companies have the necessary coverage requirements. Sadly, it’s a cumbersome process that requires employees to juggle multiple aspects. Regulations surrounding privacy, anti-bribery, fiscal responsibility, and a myriad of other areas can differ based on the state or country where business operations are taking place. For many companies that have a global presence, enacting multiple strategies to fulfill varying regulations can feel like a labyrinth of expensive processes.
The compliance assessments of 3rd party vendors can often yield an abundance of data that companies must analyze and translate into digestible information. The manpower and resources it takes to accurately evaluate and expose any concerning trends is something many businesses are unable to accomplish. Without the ability to extract valuable intel from this data, companies are vulnerable to potential 3rd party breaches.
The CTrax Solution – COI Tracking
CTrax was built to facilitate productivity in the insurance space by offering a flexible solution for managing certificates of insurance. Its revolutionary, cloud-based system includes a COI library that is always accessible via any network connected device. The library also includes supporting documentation and any pertinent information regarding renewals and policy status. This allows users to streamline certificate tracking by grouping certificates according to provider, vendor, project type, and industry, to name a few. CTrax uses cutting-edge Optical Character Recognition (OCR) technology to enhance productivity and ensure data is properly recorded. The CTrax platform optimizes the business process for maximum collaboration and increased accountability through an easy.